China Slows Sharper than Expected

In addition to the riots against tight covid restrictions since the weekend, China is also facing broader adverse effects of the strict anti-Covenant policy, PMI data shows. The official survey showed the manufacturing index falling from 49.2 to 48.0 – well below the median forecast of 49.0. The non-manufacturing sector activity index fell from 48.7 […]

Sunset Market Commentary

Markets European inflation eased a little more than expected from 10.6% to 10% in November vs 10.4% expected. The downside surprise wasn’t really one after several national readings flagging the possibility of this to happen. Energy and services costs helped ease the number, even as food prices rose more quickly. Markets seemed to focus more […]

ADP Warns of a Turning Point in the Labour Market

According to a new ADP report, the US private sector created 127K new jobs in November – the lowest since January 2021 and significantly below expectations (196K) and past data (239K). The accompanying commentary says that the labour market and pay have already begun to be affected by the Fed’s policy tightening, and fewer people […]

Risk Rallies on Powell

Market movers today The main release today will be ISM manufacturing for November this afternoon. It is expected to drop below 50 from 50.2 to 49.7. Focus will also be on the price and employment components. US also releases personal spending and PCE inflation. German retail sales will be out this morning. It has been trending lower since February […]

Investors 'Really' Want to See the Fed Half-Dove

Oops investors did it again. They did not listen well to what Jerome Powell said yesterday. Powell said that the Federal Reserve (Fed) will slow down the pace of rate hikes from next month, while insisting that the borrowing costs will keep rising, and remain high for some time until the Fed is sure the […]

Markets Saw Powell's Speech as Softer than Expected

Markets Yesterday, EMU November headline CPI eased more than expected from 10.6% to 10.0%, but didn’t came as a surprise after member states’ data published on Wednesday. Core inflation holding stubbornly high at 5.0% even caused a temporary rebound in German/EUM yields (about 5.0 bps), but the gains were largely reversed at the close (German […]

Flashing Green

We’re seeing green flashing across the board on Thursday, with sentiment buoyed by positive signals on Fed rate hikes and China’s Covid response. While it could be argued that Jerome Powell’s comments on Wednesday were relatively balanced – slower tightening now but rates high for longer – the last year has proven that anticipating the […]

Australian Dollar Flies after Powell Speech

AUD/USD continues to power upwards and hit 10-week highs earlier today. The Australian dollar climbed 1.5% on Wednesday and has edged higher today. In the European session, AUD/USD is trading at 0.6796, up 0.14%. US dollar slides after Powell speech Fed Chair Jerome Powell spoke on Wednesday and gave the markets what they wanted to […]

US: Income Beats Estimate, Spending Strong at 0.8% on the Month

Personal income advanced 0.7% month-on-month (m/m) in October, above market expectations for a more modest gain of 0.4% m/m. Compensation of employees, which gained a solid 0.5% m/m, was behind the strong headline income reading. Government social benefits was another strong contributor with growth of 1.6% m/m that reflected one-time refundable tax credits issued by […]

Sunset Market Commentary

Markets Yesterday’s (perceived) soft speech of Fed chair Powell (slowing the pace of rate hikes to 50 bps in December) at that time triggered a sharp rally both on US bond and equity markets (Nasdaq +4.41%). Today’s reaction in Asian and Europe was much more modest/diffuse. Gains on Asian markets were mostly limited to about […]