The 6% Bet

The DAX index advanced to a fresh year high on Thursday as a 7% rally in Siemens after strong results, and a slowdown in German inflation fueled appetite in the German big caps. The Frech CAC40 gained almost 1%. But futures hint at a bearish open as US stocks failed to keep up with the […]

Barring a Large Surprise, We Don't Expect Much of a Market Reaction

Markets The unexpected slowing in German inflation, however difficult the numbers are to interpret, determined much of the trading session yesterday. European rates fell with German bund yields printing losses between 2.5 bps (2y) to 6.2 bps (30y) still. US bond yields dropped in the slipstream. The long end outperformed, causing the 10y2y spread at […]

Canada's Jobs Market Bursts Out of the Gates in 2023    

The Canadian labour market added 150k positions in January, with full-time employment up 121k and part-time employment up 28.9k. The unemployment rate held steady at 5.0%. The participation rate rose to 65.7% (up 0.3 percentage points). By industry, employment was up in trade (+59k), health care (+40k), and education (+18k). Losses were seen in transportation […]

Sunset Market Commentary

Markets In a session deprived of major eco data releases on both sides of the Atlantic, US and European bonds suffered further fall-through losses after yesterday’s late session U-turn on US markets. Over there, a poor 30-y Treasury auction highlighted that an easy investor pick-up of massive bond supply wasn’t as evident as markets were […]

Weekly Focus

Following a period where the discussion was not about if we would have a recession but how long and how deep it would get, focus has now turned to whether we will avoid recession and in fact could be seeing a mild re-acceleration of global growth. The main reason is 1) economic data has not […]

Euro/ECB About to Outhawk Both USD/Fed and GBP/BoE

Markets The Fed unanimously decided to raise its policy rate by 25 bps to 4.5%-4.75%, in a second consecutive downshift (+75 bps in November; +50 bps in December). In its new policy statement, they still commit to future increases (multiple) in the policy rate, but a reference to pace (magnitude of hikes) is changed by […]

Aussie Hits 8-month High after Fed Meet

After a sluggish start to the week, AUD/USD bounced back on Wednesday with gains of 1.18%. The pair has edged lower on Thursday and is trading at 0.7137 in the European session. Powell sends US dollar lower The Federal Reserve raised rates by 25 basis points at the Wednesday meeting, as expected. The Fed noted […]

Euro Drifting ahead of ECB Meeting

The euro is showing limited movement on Thursday, ahead of the ECB rate meeting. In the European session, EUR/USD is trading at 1.1000. Euro jumps on dovish Powell Investors liked what they heard from Jerome Powell at the Fed meeting, which sent the US dollar broadly lower. The euro took full advantage and climbed 1.16% […]

Europe's Central Banks Deliver Another Rate Hike Dose

Summary The European Central Bank (ECB) delivered a 50 basis point increase in its Deposit Rate at today’s monetary policy announcement, and offered a relatively determined message to continue along its monetary tightening path. In particular, the ECB pre-committed to another 50 basis point increase in March, a somewhat unusual move, and said it would […]

Bank of England Review

Bank of England Review – 50bp Hike Today and a Final 25bp Hike in Store for March In line with our expectation, the BoE today hiked policy rates by 50bp, bringing the Bank Rate to 4.00%. We expect the increasingly weak growth outlook to support a near-term ending to the hiking cycle. We maintain our […]