Crude Rally Dominates Cross-Asset Sentiment ( Markets-Oil-JPY)
MARKETS Both Treasuries and equities sold off as soaring crude futures reignited fears the Fed may ratchet up hawkish rhetoric at next Wednesday’s FOMC meeting. Hence a pullback in crude would be crucial for any prolonged risk rally, given implications for inflation expectations. And for the central bank fraternity intent on frontloading rates, chapter two…
US yields soar ahead of this weeks closely watched US Bond auction
MARKETS Investors are hyper-focused on inflation, economic growth, and future Fed policy. Most assume the worst and think a financial tsunami will hit the US and global markets thanks to the quorum of US-based bank CEOs that have given the gloomy growth narrative their imprimatur. Anything less than that outcome is going to surprise a…
Conviction remains low even after a risk friendly NFP
Growth concerns have temporarily wrestled the public eye away from inflation worries; hence, the markets trimmed the Fed’s probability of tightening into restrictive territory. However, with oil prices on the boil again, inflation concerns are never far from the spotlight. Indeed, this can best be encapsulated by the market’s reaction to Friday’s Non-Farm Payroll number,…
Risk on the Fed Yo-Yo String + More ink split on OPEC than oil delivered + FX
MARKETS I am not sure of a better way to describe price action than to tell it as risk sentiment is on a Fed rate hike impulse yo-yo string as this morning, at least it is the return of the “bad news is good news, “or maybe it’s just the absence of overly good news….
electronic information manufacturing sector posts steady growth
BEIJING, — China’s electronic information manufacturing sector maintained steady growth in the first four months of 2022, data from the Ministry of Industry and Information Technology showed. The added value of electronic information manufacturers with annual operating revenues of at least 20 million yuan (about 3 million U.S. dollars) expanded 10.7 percent year on year…
The Devil is always in the ISM detail and can OPEC deliver more barrels ?
MARKETS US equities were weaker Wednesday, S&P down 0.7%. US10yr yields up 6bps to 2.91%. Bunds up 6bps as well, to 1.18%. Equities are trading lower again as the employment piece of ISM manufacturing contracted and the prices paid component remains elevated. If investors did not take kindly to Tuesday’s higher than expected inflation print…
Recession risk are linked to the inflation outlook
With recession risks linked to the inflation outlook, Global investors did not take kindly to the fact that peak inflation is not behind us after the Eurozone headline CPI came far above expectations, driving global yields higher with the post-EU Russian Oil embargo oil bounce initially fanning those inflation fires. But fortunately for risk sentiment,…
Equities Start The Week Positively: A return to trend growth.
Equities Start The Week Positively: A return to trend growth, not a recession. Equity futures start the week positively, with news of easing mobility restrictions across several districts in Beijing and Shanghai supporting risk sentiment, illustrated through strength in travel and luxury sectors. Thoughts of a slower Fed rate hike glide path continue to send…
Risk sentiment has regained some of its zeal
MARKETS With help from “old reliable” US personal spending data, market sentiment continues to improve -reminding investors that it is usually a bad idea to go short the US consumer’s propensity to spend On Friday, I wrote in my note that it’s the return of the “bad news is good news” trade. That statement might…
Peak Fed Hawkishness, Is Bad News is Good Again?
Equities are rallying again today as speculation around peak Fed hawkishness from Wednesday’s FOMC minutes and the potential for China’s zero-Covid policies easing keep sentiment afloat. But one must wonder whether we are back to ‘bad news is good news” for the equity markets. Despite the disappointing US pending home sales number, Wall Street was…
