Soft Market Open : Recession obsession
Stocks are soft at the Monday open on increasing evidence the Federal Reserve will take a more committed approach to its monetary policy inflation-fighting stance. However, markets have been surprisingly resilient as discussions under the surface debated whether this week’s US March CPI data will hint at the peak of the inflation cycle and help…
A retracement in oil prices aided US Stocks.
MARKETS Although the tape is incredibly messy, US stocks were supported by a limited rise in real yields, stable earnings expectations and some retracement in energy prices. The first-quarter earnings season kicks off next week, and, as always, Financials will get things started – almost a third of the XLF ETF reports. And with the…
Different Strokes For Different Folks
The macro backdrop remains very choppy with equity and FX markets on the defensive amid further weakness in tech and a well-supported USD. Although the Fed’s balance sheet’s run-off flagged in the FOMC minutes was not especially different from market expectations, uncertainty around central bank reaction functions remains high. Policy challenges vary wildly by economy/region….
One swallow doesn’t a spring make, but a Volcker adjustment is on the cards
US equities were weaker Wednesday, S&P down 1.0%. US 2s10s steepened further, with 10yr yields up 5bps to 2.6%, highest in three years, 2yrs down 5bps to 2.47%. Oil fell 4.7%. I will not dwell on the FED minutes, as Vice-Chair to be Brainard had already set the table. After a March reprieve, the global…
Air pockets are becoming easier to find these days
MARKETS US equities fell Tuesday, S&P down 1.3%. US10yr yields up 15bps to 2.55% after Fed Governor Brainard quoted Paul Volcker on runaway inflation and called for a rapid reduction in the Fed’s balance sheet (more below). 2yr yields up 9bps, taking 2s10s back into modestly positive territory. Germany 10yr bunds up 11bps to 0.61%….
Has the RBA reached peak hawkishness?
If investors think maximum hawkishness in market pricing for the major central banks has been reached, lower yields could be a critical pillar of support for global equities in April. Global fixed income remained well supported since the start of the month. Further gains in bond markets depend on two factors. First, whether CPI inflation…
War and Peace: The repetitive cat-and-mouse game
It is a lighter start to the APAC session this week, with markets in China and Taiwan closed for a holiday; however, the Russia-Ukraine conflict continues to be the primary driver of markets. Still, more indirectly than ever before, the implications on inflation, commodity prices, and liquidity are now more relevant than direct military conflict…
Is it War or Peace?
The S&P 500 gave back some of its recent gains., reversing some of Tuesday’s hopeful price action. This reversal comes on the heels of Russia pouring cold water on headlines of constructive ceasefire talks. But in a repeat of the past few days, there was yet another systematic driven squeeze higher into the bell; otherwise,…
Gold and the Rouble
A few days ago Russia’s central bank announced it would buy domestic gold at RUB5000 per XAU gram until June 30. The announcement was largely ignored due to the lack of peace agreement traction and the weak levels of USDRUB above 100.After all who would sell gold at that level However, optimism has increased significantly…
Markets are flooded with inconsistencies
The S&P rose for a 3rd day as a sharp climb in shares of Tesla (+8.03%) overshadowed weakness in energy and bank stocks, while Russia and Ukraine were poised to hold their first face-to-face peace talks in more than two weeks. The market may well remain supported into the month and quarter-end given bond/equity rotation,…
