Lack of fireworks on earnings means boring is beautiful
MARKETS The overall lack of fireworks on earnings means boring is beautiful. And while supply chain and inflation conversations are improving, a significant consumer-driven earnings headwind remains. There was little to read from overnight price action, with many markets struggling to find a consistent direction as active investors were reluctant to chase, given the uptick…
Markets have one less pain in the gas to deal with
MARKETS Equities are rallying back from yesterday’s weakness – most are pointing to the eventual reopening of the Nord Stream 1 pipeline as one of the sources of renewed risk appetite. UST yields are generally higher, but the 2s10s curve remains firmly inverted, suggesting recession fears have not simply gone away. Still, there has been…
Market + Oil + FOREX
MARKETS US equities were weaker Monday; the S&P closed down 0.9% despite bank earnings beating expectations after initially trading higher. Weakness later in the session followed a report that Apple plans to slow hiring. US10yr yields up 7bps to 2.99%, 2yrs up 5bps to 3.17%. Oil is up 4.5%. With Apple putting up their hand…
All Eyes on Europe
MARKETS Japan holiday today will sap some liquidity from Asian trade today, and US cash treasuries will be closed in the region. US equities were stronger Friday, S&P up 1.9% on better US data, closing the week 0.9% lower. US 10yr yields finished down 4bps to 2.92% and 17bps for the week. Oil closed up 2.1%…
The Search For The Right Playbook
The ongoing search for the right playbook has the market riding the rate hike roundabout with stops at 75 and 100 bps, but with no historical context to compare the current situation; at times, investors feel uncertain about how to position risk with Fed guidance not helping matters; fortunately, we get a break from the…
Asia Open: Believe it or not 75 bp hike is welcome news
US stocks are up as the market parred back some of those more aggressive 100 bp rate hikes after St. Louis Fed President James Bullard told Nikkei that he favours a 75bp hike in July that would bring the fed funds rate to neutral. Bullard is a voter, and one of the more hawkish members on the…
Sticky Core Inflation Makes it Tricky To Fade Headline CPI
MARKETS US equities were weaker Wednesday, S&P down 0.4%. US10yr yields down 4bps to 2.93%, 2yrs up 10bps to 3.15% after a beat on US CPI and BoC hiked by 100bps. At -22bps, 2s10s are most inverted since November 2000, and the market has moved to a price ~90bps ahead of walking into the July FOMC…
Markets Wobbled As Investors Positioned for CPI
MARKETS Stocks wobbled as investors positioned themselves ahead of today’s CPI report. US IG credit is closing unchanged to 3bp wider, rates rallied, and equities fell (SPX: -0.92%, DJIA -0.62%, NDAQ -0.95%), reflecting the uncertainty investors feel ahead of Wednesday’s US CPI print. Treasury curve inversion deepened to levels last seen in 2007 – 2s10s…
Asia Markets: Equities Sell Off Ahead Of A Week
MARKETS Equities are selling off to start the week with ramping Covid restrictions out of China amid low liquidity conditions ahead of the closely watched US CPI and the start of earnings season, likely exacerbating the cross-asset fallout. And with the European natural gas story now on everybody’s mind and nowhere near fully priced, the…
Monday Markets See Rally Capper
MARKETS US equities were a touch softer Friday, S&P down 0.1% to be 2% higher over the week. Bonds sold off after payrolls beat, US10yr yields up 9bps to 3.08%, 2yrs up 9bps to 3.1%, leaving the curve still inverted. Over the week, 10yr yields are up 20bps as recession concerns ease. While the MSCI World…
