Week Ahead : Nord Stream Turbine, NFP effect & CPI
The day’s best news for risk was Germany confirming that the government had received a positive signal from Canada regarding delivering a turbine needed to maintain the Nord Stream 1 gas pipeline to Germany. If it is confirmed it was received, I would expect a sharper correction in EU natural gas prices, the bleeding to…
China and UK fiscal policy help risk sentiment
MARKETS Risk sentiment improved across markets on fresh hopes around China and UK fiscal policy. US equities bounced higher again, now aided by China stimulus headlines, while UST yields continue their march higher with the 2s10s curve still inverted but steepening. A significant focus remains on whether the Fed will hike by 50 bp or…
Fed and Markets in Data Dependant Mode+ OIl slides lower again.+ FOMC Minutes
FOMC MINUTES In my opinion, there is not a lot to look into here – think about the context of the last meeting and the fact they hiked 75 bp – of course, these minutes will come off hawkish. The messaging here is already known: risks of growth are tilted to the downside given the…
Europe at the epicentre of stagflation fears
MARKETS US equities were a bit stronger Tuesday, S&P up 0.2%, European equities weaker. US10yr treasury yields fell 7bps to 2.81%, 2yr yields down 2bps to 2.82%, leaving 2s10s inverted for the third time this year. EURUSD fell to 1.0267, the lowest in twenty years, as the USD rallied. The move lower in US rates…
The US to scrap China tariffs?
MARKETS Relief in EGB spreads, and the outperformance of periphery betas helped European stock lift overnight. And despite recession risk filling the headlines, US stock futures are currently up in no small part thanks to lower US yields and falling volatility, but mainly on the hope that the US will scrap China tariffs even as…
A Long Weekend For Taking Stock
MARKETS There is almost nowhere to hide if we dive into the recession plunge pool for a long time, notwithstanding that the first six months of 2022 have been a challenging time to be a stock market investor. The most important question we are getting from clients is to re-frame the potential hit to SPX…
Slumping Growth Spooks Investors
MARKETS With central banks shifting towards accepting that monetary tightening is impossible without some economic damage, the market narrative has swung 180 degrees this week – and indeed, that wind direction change has taken place in real-time. Rather than sticky inflation, the market is now panicky about slumping growth. You can roll out various indicators…
OIl down ahead of OPEC+ meeting & Sintra fallout hammers the Euro + the Parity Party
MARKETS Window dressing, quarter- and month-end rebalancing, and the June 30 redemption deadline are all factors in play over the next few days. Hence folks are trying to get books in line ahead of Friday with a thought here that pension fund rebalancing should support the broader tape. Accordingly, you will hear a lot of…
All Roads Lead To Recession
MARKETS All roads lead to recession. Despite encouraging headlines around China loosening its covid policies, US stocks faded aggressively from earlier strength after harrowing consumer confidence data poured ice water on the month-end relief rally. For context, that is in the region it was printing in the 2015/16 downturn. It is a tough market to…
US rates to remain on the Merry-Go-Round +Policial Pollyanna in the OIl Patch
MARKETS US equities were a bit softer Monday, S&P down 0.3% and US10yr yields up 7bps to 3.2% on the back of robust data. A healthy beat on durable goods orders, rising 0.7%mom in May, consensus looked for a 0.1%mom gain. While Pending home sales were also better, up 0.7%mom in May, consensus looked for a 4%mom decline. Just…
