Voting Rotation, Hawkishness and the Next ECB Meeting in Sight

The ECB prepares to hold its first rate-setting meeting for 2023 on February 2. The market is almost certain that another 50 bps rate hike will be announced next week. The attention falls on the ECB outlook as an open debate among the ECB members is developing before our eyes. Both sides have sound arguments with the […]

NZ Dollar Dips after CPI Unchanged

The New Zealand dollar is under pressure on Wednesday. In the European session, NZD/USD is trading at 0.6478, down 0.41%. Markets eye New Zealand CPI The New Zealand dollar reacted negatively to today’s CPI release, falling as much as 0.60% before paring these losses. Fourth-quarter CPI remained unchanged at 7.2%, a notch above the consensus […]

Earnings Dampening the Mood

Equity markets are back in the red on Wednesday, as investors appear to prepare themselves for a disappointing earnings season for big tech. The last few weeks may turn out to perfectly encapsulate how the year will be as a whole, fluctuating significantly and suddenly between optimism and pessimism as the data and headlines dictate. […]

Australian Inflation Surprise

Inflation data continues to be the main driver of the markets. This morning the currency market focused on a surprise out of Australia, where the annual CPI growth rate for the fourth quarter accelerated from 7.3% to 7.8%, against expectations of only 7.5%. Inflation hit its highest level since 1990. Moreover, a 1.9% rise in […]

Bank of Canada delivers a final 25 basis point hike    

The Bank of Canada (BoC) raised the overnight rate to 4.5%, while stating that it will continue with Quantitative Tightening (QT). On rising prices, it stated that “inflation is projected to come down significantly this year. Lower energy prices, improvements in global supply conditions, and the effects of higher interest rates on demand are expected […]

Sunset Market Commentary

Markets The Bank of Japan stuck to its ultra-easy monetary policy this morning, pushing back against heavy market speculation that the central bank would take or at least announce further steps towards policy normalization. Japanese yields fell off a cliff, particularly in the BoJ-capped 10y maturity. This immediately spilled over into core bond markets. Yesterday’s […]

Is the ECB Done With the Hikes?

The Euro was underperforming yesterday after press reports that the ECB was planning to hike by 25bps in March. That’s quite a long time away, and it’s just a rumor. But it could have an outsized impact on the shared currency for a couple of reasons. We could see a shift in tone ahead of […]

Australia December Labour Force: Disrupted by Greater than Usual Illness

Total employment: -14.6k from 58.3k (revised from 64.0k). Unemployment rate: 3.5% from 3.5% (revised 3.4%). Participation rate: 66.6% from 66.8% (unrevised 66.8%). We suspect we have now past the low in unemployment. Total employment declined by 14.6k (0.1%) in December 2022, following an increase of 58.3k in November (revised from 64.0k) and an average monthly […]

Central Banks in Focus

Market movers today It will be a rather busy day on central bank front, kicking off with Norges Bank (NB). It is an interim meeting, hence, we will get only a rate decision, monetary policy assessment (both at 10.00 CET) and a press conference in Norwegian (at 10.30 CET). We will not get revised projections, […]

S&P 500 is An Easy Short

There was good, and less good news for investors on the wire yesterday. The latest PPI data showed that the producer price inflation in the US fell way faster than expected. The expectation was a slowdown in factory gate inflation from 7.3% to 6.8%. And the data printed a sexy 6.2% for December – which […]