Commodities Year Ahead 2023: Gold and Oil Outlook Tied to Fed and Ukraine

The entire commodities spectrum rallied in the first half of 2022 as the war in Ukraine sparked major supply concerns for energy and agricultural commodities. But heading into 2023, it is demand concerns that have taken over and are clouding the outlook. Gold and oil have lost their shine amid worries that the Fed and […]

UK Labour Market Reversal

UK data released today marked a sharp rise in jobless claims, marking a turnaround in employment recovery after covid restrictions. The ONS reported a 30.5K increase in claimant count for November after a 6.5K decline a month earlier and a sharply stronger-than-expected 3.5K. Previously there had been a trend of slowing job growth over the […]

US: Inflation Shows Further Signs of Easing and Supports the Case for Fed Dialing Back on Rate Hikes Tomorrow 

Consumer price inflation increased by 0.1% month-on-month (m/m) in November, coming in well below the 0.4% m/m increase in October. On a year-over-year (y/y) basis, headline inflation edged lower by 0.6 percentage points (pp) from the month prior, slowing to 7.1%. Energy prices fell by 1.6% m/m, as both gasoline prices (-2.0% m/m) and energy […]

US: More Green Shoots in U.S. November Inflation Report

Headline U.S. inflation further slowed to 7.1% year-over-year Food, energy, and ‘core’ CPI growth (+6%) all decelerated Home rents increasingly driving headline inflation rates, offsetting easing / narrowing price pressures among other products and services Fed to hike by 50 bp tomorrow; more encouraging inflation signs make a pause in early 2023 more likely November’s […]

Sunset Market Commentary

Markets UK labour market data kicked off today’s trading day. Employment, based on the labor force survey, rose by 27k in the three months to October, beating the consensus estimate of a 17k decline. The unemployment rate rose during the same period to 3.7% with participation outpacing employment. Wage growth accelerated from 5.8% Y/Y to […]

Another Inflation Release Below Expectations – Another Rally

US consumer prices added 0.1% for November, significantly weaker than the expected 0.3%. The annual price growth rate slowed to 7.1% YoY against expectations of 7.3%, 7.7% a month earlier and two percentage points below the June peak. An important factor was the release of a lower-than-expected Core-CPI, which decreased to 6.0% YoY. This strongly […]

Fed to Hike by 50bp Despite the Low CPI

Market movers today After the CPI downside surprise yesterday, markets revert focus to the FOMC rate decision today. Despite signs of peak inflation, economic data continues to paint a strong picture of services activity and the US labour market, with high wage inflation and stagnant labour supply. Nevertheless, in line with guidance from various FOMC […]

What Matters is How the Fed Feels About Falling Inflation

The softer-than-expected inflation print in the US sent the stocks higher and the US dollar lower, but the S&P500 couldn’t clear key resistance levels, as investors know that the Federal Reserve (Fed) Chair Jerome Powell could coldheartedly kill the market joy at his post-FOMC press conference today. On the right path, but Yesterday’s inflation report […]

Expect Fed to Raise Terminal Policy Rate to 5% and Perhaps Even More

Markets US CPI eased more than expected in November to 7.1% headline and 6% core inflation. The downside surprise was no more than 2 and 1 hundreds of a percent respectively but it mattered for markets. US short term yields dropped almost 25 bps intraday (2y), outperforming the long end (<20 bps in the 10y). […]

Fed Pivot May Send US Stocks on Path to Bull Market

Stocks were given a shot in the arm by yesterday’s cooler-than-expected US CPI data. However, greater appetite for risk assets would still need to be validated by a Federal Reserve that’s more open to easing up on its aggressive battle against inflation. The FOMC is expected to downshift to a 50-basis point hike today amid […]