BOJ Surprises by Widening 10-Year JGB
The Bank of Japan (BOJ) expanded the tolerable band for 10-year JGB yields to ±0.5% from ±0.25%. It will also conduct fixed-rate operations at 0.5% every business day when it had previously conducted them at 0.25%. The BOJ said it had decided to widen the tolerable band to enhance the sustainability of monetary easing amid a…
Investors Still Fretting About the Fed
US equities were weaker Monday, with bearish sentiment still prevalent following the hawkish dial-backs delivered by the Fed and ECB last week. Bonds also sold off, and US10yr yields are up 10bps to 3.58%. US stocks are trading modestly lower Monday on the back of a relatively large backup on the US yields. In a departure from…
No shortage of economic headwinds
MARKETS US equities were weaker Friday, with S&P down 1% with similar declines through Europe as the market continued to absorb last week’s hawkish ECB and Fed messaging. S&P was 2% lower over the week. US10yr yields were up 3bps to 3.48% on Friday, down 10bps over the week. With no shortage of economic headwinds, investors…
The Fed and ECB seem determined to leave a lump of coal in everyone’s stockings
MARKETS US stocks sold off again on Friday as investors demonstrated a peculiar reaction to another deceleration in CPI inflation, a rate hike downshift from the Fed, and a modest weekly decline in 10-year Treasury yields — all highlighting how challenging it may be to produce results in this recession tail risked environment. This past…
Hawkish Goodbye to 2022( Markets-Forex-Oil)
In a week that saw the broader market’s 2023 pivot hope dashed, investors are examining the overnight movement with great detail to determine if the collapse in risk sentiment is part of a larger and more complex darker economic issue or, with the significant risk events behind us, will investors see calmer waters into year-end….
Markets are back running with the Stagflation baton
MARKETS The shift in the market’s focus from its infatuation with inflation and the Fed to the economic growth momentum was on full display overnight, mainly through the lens of the markets ‘ adverse reaction to a fragile set of macro data points. November headline and core retail sales came in weaker than expected, hinting…
Chair Powell banged the higher terminal rate gong
MARKETS US stocks snapped to a two-day winning streak after Federal Reserve Chair Jerome Powell reiterated his hawkish stance. Indeed after Chair Powell banged the higher terminal rate gong, there was a definite sense of less jollying along Wall Street ahead of the Holiday break. The Fed has downshifted the pace of tightening, but they’re…
Still 7% (markets + oil)
MARKETS The initial surge in the S&P 500 on the back of a very encouraging CPI inflation report has quickly faded ahead of today’s scheduled FOMC meeting statement. After rallying ~2% to start the day on Tuesday, markets have cooled off as the realization that 7% inflation still suggests the Fed has a long way…
Shaping up to be a volatile week
MARKETS If Monday’s cross-asset price action were any indication, it is shaping up to be a volatile week. For the first time this year, policy decisions from ECB and Fed are due in the same week, with both meetings preceded by the US CPI. All three events have been associated with heightened volatility this year….
Signs that the labour market is cooling
MARKETS US equities were stronger Thursday, with S&P up 0.5% heading into the close, the first up day after five consecutive declines. Oil is down again, -1.2%. but US 10yr yields up 8bps to 3.49%. Stocks snapped a five-day winless steak as investors steady for the next run of closely watched inflation data in the…
