Fed Likely to Revert to 50 bps Hike in March

Markets At the hearing before the Senate Banking Committee, Fed Chair Powell repeated that inflation in the core goods sector has fallen while housing services prices are also decelerating. Still, there is little sign of disinflation in core services excluding housing. Wages also remain above what is consistent with 2% inflation. As recent data were […]

Aussie Takes a Tumble after Powell

The Australian dollar has stabilized on Wednesday after a dreadful outing a day earlier. In the European session, AUD/USD is trading just below the 0.66 line. AUD/USD sustained its second most bearish day this year on Wednesday, with a staggering decline of 2.1%. Earlier today, the Australian dollar touched a low of 0.6567, its lowest […]

Powell's Speech Deepens Bitcoin Correction

Market picture Bitcoin fell on Tuesday amid falling equity indices and a rising US dollar. BTC updated three-week lows below $22K, losing 2% in the past 24 hours. Risky assets fell sharply amid a hawkish speech from Fed chief Jerome Powell, after which markets began to price in the chances of a 50-basis point rate […]

USD/CAD Climbs after Hawkish Powell, Bank of Canada Set to Pause

The Canadian dollar has steadied on Wednesday, after sliding 1% a day earlier. Later today, the Bank of Canada meets for its monthly meeting. BoC likely to pause The Bank of Canada is widely expected to take a pause at today’s meeting and maintain the cash rate at 4.50%. This would mark the first pause […]

Sunset Market Commentary

Markets Global markets today took a breather after yesterday’s sharp repositioning. At his hearing before the Senate, Fed Chair Powell admitted that rates most likely will have to be raised further than assumed in the December dots. Persistent stronger activity/demand and stubbornly high services inflation also force the Fed to reconsider stepping up the pace […]

Bank of Canada Hits Pause 

The Bank of Canada maintained the overnight rate at 4.5%, while stating that it will continue with Quantitative Tightening (QT). Regarding recent economic data, the Bank stated that “restrictive monetary policy continues to weigh on household spending, and business investment has weakened alongside slowing domestic and foreign demand.” Although employment growth has been robust, it […]

EU Urges Fiscal Belt Tightening

Market movers today After Fed chair Powell’s testimony, US macro data releases are back in focus to gauge the risk of a reacceleration in the hiking pace. Today initial jobless claims are on the agenda, ahead of the big labour market report tomorrow. In Sweden, January data for production, new orders, household consumption and the […]

Powell Says 'No Decision', But Strong Data Tells Another Story

Bulls in European equities didn’t’ really get washed out by the Federal Reserve (Fed) hawks; the DAX index closed higher at the wake of Powell’s first day of testimony before the Senate – which went badly hawkish on the other side of the Atlantic. The better-than-expected jump in January industrial production in Germany may have […]

Solid Payrolls Report Needed for EUR/USD to Test 1.0484/61 support

Markets US and European interest rate markets diverged further yesterday. German/EU yields didn’t see much spill-over from Tuesday’s sharp post-Powell repositioning in US markets. The German curve inverted further (2-y yield up 2.5 bps, 30-y minus 6.4 bps) in a session deprived of data. US yields initially corrected lower, but fortunes again changed in US […]

Crypto Market Cheaper Than a Trillion Again

Market picture The total capitalisation of the crypto market is back below $1 trillion, down 1.1% over the last 24 hours. We note that sellers drive the market during periods of reduced liquidity – in the early hours of the Asian session, as was the case today. Bitcoin lost $300 in a sharp move to […]