Asian Trading Shows Little Impact of Insurrection

Markets Core bonds ended last week on a solid footing. German Bunds outperformed US Treasuries in more of a one-off reset after very weak French PMI’s. German yields fell by 10 bps to 15 bps with the belly of the curve outperforming the wings. US Treasuries lost 5 to 6 bps across the curve. Risk […]

Geopolitical Chaos, FX Intervention, and US Banks' Stress Test Results

Upon reaching 200 km within Moscow, Prigozhin’s troops halted and made a U-turn back to their field camps. In addition, Putin dropped earlier treason charges on the Wagner Group and allowed Prigozhin to head to Belarus, Russia’s western neighbour for exile.

Japanese Yen Edges Lower after Verbal Intervention

The Japanese yen continues to lose ground and the Japanese government is not amused. The yen slipped 1.26% last week and fell as low as 143.87 on Friday, its lowest level since November 7th. Since the start of April, the yen has plunged over 7% against the dollar.

Bitcoin Needs to Cool Off for Now after Proving its Ability to Grow

Bitcoin renewed its early June highs near $31.4K on Friday, but the rally was not sustained, and over the weekend, the recent momentum was dissipated, bringing the price back down to $30.3K in early Monday trading. The BTC rally is often attributed to hopes of launching spot bitcoin ETFs, which ease access of institutional capital to the flagship cryptocurrency.

Sunset Market Commentary

The German IFO business climate index brought a message similar to last Friday’s EMU PMI’s. Sentiment in Europe’s biggest economy has clouded over considerably, Ifo reported. The overall index dropped from 91.5 to 88.5. In particular, companies turned markedly more pessimistic on expectations (83.6 from 88.3) but current assessment was also softer than last month (93.7 from 94.8).

Oil's Reduced Sensitivity to Geopolitics

Events in Russia at the end of last week have once again set the stage for a price rebound from the lower end of the range seen in recent months. However, deteriorating global macroeconomic conditions leave us guessing as to ‘when not if’ we will see a break of support and a move lower.

Risk Sentiment Recovering

Risk sentiment seems to be recovering this morning with all but Japanese equities higher in Asia. Euro is marginally higher against the dollar and weaker versus the Nordic currencies. Brent oil is range-trading at the 74-75 level. The dramatic events in Russia over the weekend have not led to big market moves, at least not yet. Rates markets currently price in one more hike for the Fed by November and 47bp worth of hikes by the ECB by December.

Investors Finally Believe the Fed

Financial markets kicked off the week on a weak note, but not because of the Wagner’s mini, failed, or fake coup over the weekend, but because of the diminishing rate cut bets for the Federal Reserve (Fed) for this year - and the beginning of next year.

EUR/USD Went Nowhere

EUR/USD went nowhere, starting and ending the day just above 1.09. ECB Lagarde today gives the formal start to the ECB’s annual forum in Sintra. Tomorrow’s line-up is the interesting one with a panel discussion featuring ECB Lagarde, Fed Powell, BoE Bailey and BoJ Ueda.

A Slow Start to the Week, Central Bank Speak and Key Data Eyed

It's been a relatively slow start to the week so far but things are likely to pick up with more appearances from prominent central bankers and key data due for release in the coming days.