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Tag Archives: PMI

Macro and Prices: Data and Psychology in the Week Ahead

The week ahead has a relatively light economic schedule, punctuated by the US Thanksgiving Day holiday on November 24. Nevertheless, the data highlights include the preliminary November PMIs, Tokyo's November CPI, and the FOMC minutes from this month's meeting. The data is not the driver now; psychology is. The precise print, for example, of the eurozone and the UK's preliminary PMI will likely be of little consequence. The composite has fallen for six consecutive...

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US Dollar Offered Ahead of the Employment Report

Overview: Risk appetites have returned but may be tested by the US jobs report. News of progress with US auditors in China helped lift Hong Kong and Chinese equities. Most of the large bourses in the region also rose. Europe’s Stoxx 600 is up a little more than 1% near midday after shedding 1.3% over the past two sessions. US futures also are trading with an upside bias. Benchmark 10-year yields are mostly a little softer today. The 10-year US Treasury yield is at...

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Fed’s Hawkishness Roils the Capital Markets

Overview: The Fed delivered the expected 75 bp rate hike, and although it says it will take into account the cumulative effect of past hikes and their lagged impact, the takeaway has been a hawkish message. Risk appetites have evaporated. The dollar is stronger, while stocks and bonds have been sold. Japan’s markets were spared due to the national holiday, but the other large markets in the area were sold, lead by the 3% decline in the Hang Seng. Europe’s Stoxx 600...

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Dollar Slump Halted as Stocks and Bonds Retreat

Overview: Hopes that the global tightening cycle is entering its last phase supplied the fodder for a continued dramatic rally in equities and bonds. The euro traded at par for the first time in two weeks, while sterling reached almost $1.1490, its highest since September 15. The US 10-year yield has fallen by 45 bp in the past five sessions. Yet, the scar tissue from the last bear market rally is still fresh and US equity futures are lower after the S&P 500 had...

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Weekly Market Pulse: The Dog That Didn’t Bark

Gregory (Scotland Yard detective): “Is there any other point to which you would wish to draw my attention?” Sherlock Holmes: “To the curious incident of the dog in the night-time.” Gregory: “The dog did nothing in the night-time.” Sherlock Holmes: “That was the curious incident.” From Silver Blaze by Arthur Conan Doyle, 1892 It is hard to determine sometimes what causes markets to move as they do. Take last Friday’s stock market selloff. The widely cited “reason”...

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The Week Ahead: Dollar Bulls Still in Charge

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...

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Surging Energy Prices Pushing Europe Closer to Recession

 Overview:  The poor eurozone PMI underscores likely recession and weighs on the single currency, which was sold to a new 20-year low.  Rather than a "Turn Around Tuesday"  a broadly consolidative session is unfolding. Asian and European equities are weaker, while US futures are positive but little changed.  Benchmark 10-year bond yields are mostly firmer and the premium offered by Europe's periphery is edging higher.  The US 10-year is little changed near 3.02%....

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Flash PMI, Jackson Hole, and the Price Action

For many, this will be the last week of the summer. However, in an unusual twist of the calendar, the US August employment report will be released on September 2, the end of the following week, rather than after the US Labor Day holiday (September 5).  The main economic report of the week ahead will be the preliminary estimate of the August PMI. The policy implications are not as obvious as they may seem. For example, in July, the eurozone composite PMI slipped...

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Market Takes China’s Response in Stride, Risk Appetites Recover

Overview: The market is judging China's response to Speaker Pelosi's visit in a mild way and risk appetites returned. Equity markets are higher, even though Chinese shares weakened. Europe's Stoxx 600 is edging higher after two days of small loses, and US futures enjoy a firmer bias. The surge in US rates yesterday has calmed. The US 10-year yield is firm near 2.76% and the 2-year yield is up a couple of basis points near 3.07%. European yields are 4-5 bp higher and...

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Yen Squeeze Continues

Overview: The US dollar begins the new month better offered. It is softer against all the major currencies. Short yen positions continue to get unwound, which is leading the move, followed  by the Antipodeans, where the Reserve Bank of Australia is expected to hike rates tomorrow. Most emerging market currencies are firmer too, except for a few Asian currencies, the Russian rouble, and, of course, the Turkish lira. Asian and European equities are higher. Japan and...

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