Sunset Market Commentary

Markets traded with a cautious bias going into the US CPI release, with European equities and the euro incurring modest losses. European yields lost a few bps even as ECB’s Lagarde reiterated that the ECB has further ground to cover.

Gold Needs Correction Before Another Leg Up

Gold showed very high volatility on Thursday and Friday, rising to $2081 and falling below $2000 in less than 48 hours. However, the price remained within the uptrend that has been in place since the second half of March.

BoE Expected to Hike, Then What?

The BOE is the last of the major banks hiking this cycle, and the expectation is that it will follow its peers - with a twist. Last week, the ECB and the Fed both hiked by a quarter of a point, but then implied that further rate hikes would be data dependent. The ECB bias was for another hike, the Fed for a pause; but both left the door wide open for this being the top of the rate hiking cycle.

Will Gold Continue Conquering Uncharted Territories?

From a technical standpoint, despite pulling back after hitting a new record high, gold remains above both its 50- and 200-day exponential moving averages (EMAs), as well as above the tentative uptrend line drawn from the low of November 3. This keeps the prevailing uptrend intact.

BoE Could Hardly Close the Door for Further Rate Hikes

The Bank of England (BoE) is expected to raise its interest rate by 25bp when it meets today, but it will certainly leave the door open for further hikes.

Bank of England to Raise Policy Rate by 25 bps to 4.5%

Markets The April US CPI release was the key focus for global trading yesterday. However, as was often the case of late, the market reaction was influenced at least as much by the reigning market bias rather than the data. With headline and core inflation at 0.4% M/M-4.9% % Y/Y and 0.4% M/M-5.5% Y/Y respectively, […]

Fed Done Hiking Rates, Dollar Bears in Control, Commodities Mixed

The Fed’s tenth straight rate hike will likely be the last one in this cycle.  The Fed is concerned that tighter credit conditions will weigh on economic activity and hiring, while helping maintain disinflation trends.  Credit tightening is about to cripple the economy and it appears that as long as we don’t get a perfect storm of hotter-than-expected labor and inflation data, the Fed will keep rates on hold for at the very least till the end of the year.

FOMC Raises Rates by 25 bps But Signals "Hawkish Pause"

As widely expected, the FOMC raised its target range for the fed funds rate by 25 bps today. The Committee has now hiked rates by 500 bps since March 2022, the fastest pace of monetary tightening since the early 1980s.

Fed Review

The Fed delivered a balanced message to the markets by hiking rates by 25bp hike, but also removing the section of the press statement saying that 'The Committee anticipates that some additional policy firming may be appropriate'. Powell did not close the door for further hikes, but we think this marks the end of the Fed's hiking cycle.

FOMC Signal a Conditional Pause

The outcome of the May FOMC meeting was broadly as anticipated, with the fed funds rate increased by 25bps to a mid-point of 5.125% and a conditional pause signalled.