Asia Open: Position for curves to bounce in a range
THE CURVE There are two rounds of US payrolls and CPI data before FOMC on September 21. With the Fed in a data-dependent mode, it could be too early to conclude its hiking pace before traders can digest the next run of essential data releases which support the Fed’s dual mandate. Though some high-frequency data…
Pelosi jitters and Less dovish comments from Fed officials veer markets risk off ( Markets +OIL)
MARKETS Less dovish comments from Fed officials overnight snapped yields higher, with the US 10yrs rallying back to 2.75%. At the same time, more sabre rattling from China sapped some confidence from equity markets with a sea of red this morning across major global indices. As we wrote on yesterday’s Asia close note, prepare for…
Storm clouds building over markets
MARKETS US equities were a bit weaker on Monday, with S&P down 0.3% amid light northern summer volumes and US10yr yields down 8bps to 2.57%. But oil was a significant casualty overnight and closed down nearly 4 % after European governments delayed plans to restrict insurance provision to tankers carrying Russian crude. It looks like…
Dovish messaging from the FOMC supports risk taking
MARKETS US equities were stronger Friday, S&P up 1.4% to 4.3% over the week. US10yr yields were down 3bps Friday to 2.65%, down 10bps for the week. Oil up 2.1%. Dovish messaging from the FOMC and better than feared corporate earnings have supported equities. At best, earnings beats have been average, but the lack of fireworks…
Markets Ponder a Fed Pivot
MARKETS Peak Fed hawkishness and weak US growth data have helped US yields and the entire curve break below the recent ranges, driving growth stock outperformance as traders ponder a Fed Pivot. And looking at the S&P 500 breaking through 4100, it seems like we are in a risk-on, dovish Fed and no US recession…
Underlying inflation at a 31-year high
Consumer Price Index The main measure of inflation in Australia – the Consumer Price Index (CPI) – rose by 1.8 per cent in the June quarter (consensus: +1.9 per cent). The annual rate of the CPI rose from 5.1 per cent to 6.1 per cent – equalling the annual rate in June quarter 2001. Inflation…
The Bar High For Even A Subtle FED Pivot
MARKETS US equities were weaker Tuesday, S&P down 1.2% after mixed earnings reports. US10yr yields are little changed ahead of the Fed, up 1bp to 2.81%. European gas prices rose above EUR200/MWh for the first time since 9 March after Russia reduced gas flow through the Nord Stream pipeline. Leaving cross-asset traders doing little more…
A week that should underscore the stark growth and inflation trade-off
US equities were weaker Friday, S&P down 0.9% but 2.5% stronger over the week as investors position and set the table for a week that should underscore the stark growth and inflation trade-off facing the FOMC. While rising jobless claims, softer home sales, and a buildup in gasoline inventory show the Fed front-loading rate hikes are causing…
It’s still a case of bad data is still good news for stocks
MARKETS US equities were stronger Thursday, S&P up 1.0%. US bonds rallied, 10yr yields down 15bps to 2.87% and 2yrs to 14bps after weak US data. Oil closed down 2.6%. but off the overnight lows The US employment situation is turning ugly as US continuing claims spiked higher, up to 1384k from 1331k the week prior….
Asia Open: The final nail will be the US PMI on Friday
Rising jobless claims, softer home sales, and a buildup in gasoline inventory all show the Fed front-loading rate hikes are causing demand destruction. Though it may take a couple of quarters for core CPI items, like rents, to decline, chances of a lower terminal rate are rising. As UMich and NY Fed inflation expectations have…
