U.S. Growth Slips to 1.1% in Q1, Though Details Show a Strong Gain in Consumer Spending 

Real GDP expanded by 1.1% quarter-on-quarter (q/q, annualized) in the first quarter of 2023 – a marked deceleration from last quarter’s 2.6% – and well below the consensus forecast of 1.9%. Consumer spending grew by a robust 3.7% – a meaningful acceleration from Q4’s gain of 1.0%. Spending on goods rose 6.5%, largely the result […]

Sunset Market Commentary

Today, in a change of heart, they forfeited on the opportunity to boost their dovish cases after US GDP grew less than expected in Q1 (1.1% Q/Qa from 2.6% in Q4 2022 and vs 1.9% forecast).

ECB Preview: The Art of Compromise

Next week, the ECB will meet to deliver another rate hike in its hiking cycle that started in July last year. This time, the question is whether it will slow the hiking pace to 25bp or continue to hike once more by 50bp. We believe it will be a 50bp compromise deal with no specific forward guidance (nor guidance on balance sheet normalisation in H2 yet), but repeating a data-dependent approach to future policy decisions.

Fed Preview: One More Hike

We expect the Fed to deliver a final hike of the tightening cycle bringing the Fed Funds Rate to 5.00-5.25%. With no updated projections and markets already pricing in around 20bp ahead of the meeting, the main emphasis will be on Powell's verbal guidance.

RBA Board to Pause Again at its May Meeting: 3.6% Now the Likely Cash Rate Peak

The Reserve Bank Board meets next week on May 2. Following the release of the March quarter inflation report Westpac now expects the Board to extend the pause it instigated at its April meeting to the May meeting. This decision will be despite the likelihood that the FOMC will announce the decision to lift the […]

BoJ: Maintained Ultra-Easy Policy But Scrapped Forward Guidance

The Bank of Japan has maintained its key policy short-term policy interest rate as expected at -0.10% and kept the limits of its Yield Curve Control (YCC) program on the 10-year Japanese Government Bond (JGB) yield unchanged at 0.50% on either side of the 0% target.

EURJPY Climbs to Its Highest in Over 8 Years

On Friday morning, the EURJPY rose above 149 yen per euro on news from Japan. There, unemployment rose to 2.8% (expected 2.5%, last month 2.6%, a year ago 2.6%), it was higher only in the summer of 2021 (2.9%).

Bitcoin's Short-Term Triangle

Bitcoin attempted to approach $30K again on Thursday but hit lower highs than on Wednesday, although it didn’t pull back as hard. Notably, the Nasdaq high tech index was up an impressive 2.75%.

USD/JPY Surges after BoJ Maintains Policy, Inflation Rises

Today’s Bank of Japan meeting was closely watched, as New Governor Ueda chaired his first meeting. As expected, there were no dramatic announcements about a shift in policy, but the yen still dropped sharply, as those investors that had hoped for a hint of monetary tightening in the short term were disappointed.

Sunset Market Commentary

After a brief rebound yesterday, yields again turned south today. Growth and inflation data published in several EMU member states understandably painted somewhat of a diffuse picture.