Tag Archives: jobs

The market has much to digest. The Bank of England's new purchases of Gilts coincided with a reassessment of the trajectory of Fed policy. After the hawkish FOMC decision and forecasts, the market briefly thought the terminal rate could be 5.25-5.50% in the middle of next year. However, by the end of last week, it had returned to around 4.5% at the end of Q1 23. Italy has a right-wing government, and what it means for the country's debt and relationship with the EU...

The poor preliminary PMI readings, the ongoing European energy crisis, and the recognized commitment of most major central banks to rein in prices through tighter financial conditions are risking a broad recession. These considerations are weighing on sentiment and shaping the investment climate. Most high-frequency data due in the days ahead will not change this, even if they pose some headline risk.  What we have seen among some central bankers applies to market...

Overview: The dog days of August for the Northern Hemisphere are here and the capital markets are relatively subdued. Equities are firmer. The notable exceptions in Asia was China, Hong Kong, and Taiwan. The MSCI Asia Pacific Index has advanced for the last three weeks. Europe’s Stoxx 600 slipped almost 0.6% last week and has recouped most of it today. US futures are steady to firmer. The US 10-year yield is struggling to stay above 2.8%, while European benchmarks...

Overview: The US dollar enjoys a firmer bias against the major currencies ahead of the July employment data. Emerging market currencies are mixed. Asian currencies are generally firm while central Europe is a bit softer. Some detect a relaxation in tensions around Taiwan, though China’s aerial harassment continues. Taiwanese shares jumped 2.25% to lead the region that saw China’s CSI 300 rally over 1%. Europe’s Stoxx 600 is giving back yesterday’s 0.2% gain, even...

Next week, there are three big events:  the US jobs report, the Reserve Bank of Australia meeting, and the Bank of England's meeting. That said, the final PMI readings may be more helpful this time than we often see because of how quickly it appears activity has stalled. After we review the likely highlights and share a few other observations, we will look at the technical condition of the major dollar pairs.  On August 3 in Sydney, the Reserve Bank of Australia...

Overview: The appetite for risk seen earlier this week is fading. Yesterday’s US equity gains helped lift most of the large markets in the Asia Pacific region, but China’s CSI 300 fell 1.1%, giving back most of this week’s gains as credit issues from the property sector haunt sentiment. Europe’s Stoxx 600 is trading heavily ahead of the ECB meeting outcome. US futures are also trading off. Benchmark 10-year yields are firmer with the US Treasury near 3.05%. European...

Swiss Franc The Euro has risen by 0.14% to 0.9906 CHF. EUR/CHF and USD/CHF, July 8(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge Overview: News that former Prime Minister Abe was assassinated while campaigning in Japan ahead of the weekend election shocked the nation and world. The immediate market impact looks minimal. Asia Pacific equities mostly advanced. Chinese stocks were the main exception and generally underperformed the...

The most important thing to appreciate is that the market has moved to price not one but two cuts next year.  The first is priced into the September Fed funds futures and the second is in the Dec Fed funds futures.  This I in response to weaker than expected data that have elevated recession fears.  The Atlanta Fed GDPNow puts Q2 growth at -2.1%.  Banks have revised down their forecasts, but none of the 59 economists in the Bloomberg survey have forecast a negative...

(Combining the weekend macro commentary and price action review in one note.  Check out the July monthly.) Three economic reports highlight the week ahead:  Japan's labor cash earnings at the start of the week and the US employment report and China's CPI at the end of the week. In addition, the Reserve Bank of Australia meets early on July 5. The Bank of Japan's insistence that inflation, which is running slightly above target is not sustainable is that it is a...

Overview: For the large rally in US stocks yesterday and the sell-off in the dollar, US rates were surprisingly little changed. This set the tone for today’s action, ahead of the US employment data. Asia Pacific equities moved higher and Europe’s Stoxx 600 has edged up to extend yesterday’s rise. The 10-year US Treasury yield is little changed, hovering around 2.91%. European benchmark yields are 1-3 bp higher. The greenback has stabilized after yesterday’s fall. The...