Riding a sea of green
MARKETS Equities had a solid finish to the week as the reversion lower in yields created a meaningful tailwind for growth stocks. And given the market body language of late, I suspect long-term investors were more than happy to ride a sea of green for a change. Indeed, it was an epic bear market bounce,…
US Stocks Scrounge Out Gains On Lower Yields
MARKETS US stocks scrounged out gains on the back of lower yields as investors continued to flip flop between recession and inflation fears. For today, however, given how early we are in the rate hike cycle, investors are seemingly giving the benefit of the doubt to the Fed after Chair Powell suggested he can bring…
Recession and the summer of discontent
MARKETS US equitie were stronger Tuesday, S&P up 2.4%, recovering after the steep losses last week. US10yr yields up 5bps to 3.28% The overnight calm would suggest that investors are giving the benefit of the doubt to the Fed, believing front-loaded monetary policy will be just that – providing scope for the looser policy later in…
global central banks + OIL rallies on US and China demand
MARKETS European equities were stronger Monday, Euro Stoxx50 up 0.9%, FTSE up 1.5%. US markets were closed for a holiday, although S& P futures edged higher with investors nibbling for bargains amongst the wreckage from last week’s nosedive from near decade-low exposure. But the sentiment was subdued as a bear market abounded. And after a historic…
The Perilous Path to Market Stability
MARKETS Chair Powell signalled that the Committee would likely be deciding between 50bps and 75bps at the July meeting and that an ultimate step down in tightening will depend on evidence that inflation is moderating. Hence, it is a bumpy road to bond market the equity market stability with the Fed in full-on hawk mode…
All eyes on BoJ today amid the global race to hike rates
MARKETS Equities sold off aggressively, reverting the post-FOMC pop and more. The narrative has flipped back to the Fed needing to impair the economy to control inflation after capitulating to 75bp from their 50bp-per-meeting hike path. And not helping the market or US dollars cause was weaker US data. Jobless claims at 229k, consensus looked…
A dovish 75 bp hike? Say what !!. ( Market -Oil-Gold-JPY)
The Federal Reserve raised Fed Funds by 75bp to a range of 1.50-1.75%, added 100bp to its median dot for 2023 (to 3.75%) and added a new phrase to its statement: it is “strongly committed” to returning inflation to its 2% target. Powell nodded to the more significant move of 75bp, motivated mainly by the…
Investors Brace for Rate Hike Impact
MARKETS Global trends in inflation and growth are increasingly a concern, and worryingly, a recessionary base case is where many investors appear to be heading. Top of mind factors the market is still digesting continue to be China’s commitment to zero-covid exacerbating supply chain issues and expectations turning more hawkish for Wednesday’s June FOMC meeting,…
Powell to follow Volcker + Oil Traders quick to take profits
MARKETS With the market sensing that a hawkish FED knows full well they are behind the curve and have little option but to step on the rate hike pedal, a significant repricing has gone through the front-end market in the US afternoon. The Fed Fund strip is pricing 70bp for the next two Fed meetings….
The Rude Inflation Wake Up Call
MARKETS US CPI for May was a nightmare for risk markets as the headline came in well above the consensus. Inflation is back on the highs; critically, it is across the board. Just education services were negative at -0.1%. The Fed’s policy is influencing financial conditions- the housing market is slowing in terms of mortgages…
