Robust Eurozone Data Brought EURUSD Back Above 1.05

The single currency edged against most of its peers on Wednesday and managed to return to territory above 1.05, helped in no small part by published economic data. In the morning, Germany surprised with a less sharp drop in industrial production, which fell by 0.1% in October against an expected 0.6%. France’s trade deficit narrowed […]

BoC's Hawkish(ish) 50 bp Hike Could Be Its Last

BoC hikes by 50 bps to 4.25%, bringing cumulative tightening to 400 bps this year Slightly hawkish surprise: consensus was split between 25 and 50 bps Soft tightening bias opens the door to a January pause The BoC lifted its overnight rate by 50 bps to 4.25%, a stronger increase than the 25 bps we […]

Equities, Oil Fall, Bonds Gain on Recession Fears

Stocks fell for a fifth day, but the sovereign bonds gained, a hint that the market catalyzer shifted from the hawkish Federal Reserve (Fed) pricing – where stocks and bonds fall at the same time, to recession fears, where stocks remain under pressure, while investors seek refuge in safer sovereign assets. The latest data showed […]

China's Easing COVID-19 Curbs and Recession Fears Continue to Dominate Markets

Market movers today Apart from the industrial production data from Denmark, data calendar is empty for today. Industrial production in Denmark has impressed throughout 2022, and has so far not shown any persistent signs of weakness. Nevertheless, many companies are beginning to report a downturn, with the latest business confidence figures clearly showing industry in […]

Markets and Fed are on Collision Course

Markets A third consecutive session of low trading volumes saw US Treasuries jump significantly higher. After a calm European trading session, the final figure of third quarter unit labor costs (I kid you not) lightened the fuse. The figure was downwardly revised from 3.5% Q/Q to 2.4% Q/Q and seen as evidence that second-round inflation […]

A Bit Flat

Equity markets look a little flat on Thursday, perhaps a sign that we’ve entered into a waiting period ahead of some major data releases and central bank meetings. This month was always effectively split into two dominant weeks, the first of the month which included the jobs report that proved extremely impactful. And then next […]

GBP/USD Steady, Inflation Expectations Next

The British pound is in negative territory on Thursday. In the European session, GBP/USD is trading at 1.2174, down 0.29%. We’ll get a look at inflation expectations in both the UK and the US on Friday, ahead of the key US inflation report next week. It has been a rather quiet week on the economic […]

ECB Preview

At next week’s meeting, we expect the ECB to deliver a 50bp rate hike with a hawkish twist. Specifically, we expect the ECB to present key principles of the end to reinvestments under the APP process (in which reinvestments will almost come to a full stop) and an open-ended wording for more rate hikes to […]

Sunset Market Commentary

Markets No surprises today. The near-empty eco calendar and (near) blackout periods for central banks delivered the feared-for dull trading day. Not the slightest diversion to trigger some directional action. The only release worth mentioning were US weekly jobless claims. The traditionally volatile number printed… bang in line with forecasts at 230k with last week’s […]

Fed Preview

Despite the strong November Jobs Report and ISM Services, market seems convinced that Fed will deliver a 50bp hike in its meeting next week. While we acknowledge our earlier call for a larger hike seems unlikely, we continue to expect a hawkish message regarding the policy stance in 2023. We think the recent easing in […]