Sunset Market Commentary

Markets SCREEEEEECH! The core bond rally came to a screeching halt at the end of this week. In defiance of the slightly disappointing ADP job report, November US payrolls easily surpassed consensus estimates. US yields propel between 8.9 bps (30y) and 13.5 bps (2y) higher. The critical 10y yield support at 3.5% was saved by […]

Weekly Focus

This week, we published our latest global economic forecasts for 2023 and 2024 in The Big Picture – Recession with different undercurrents, 28 November. We expect the western economies to fall into a recession next year, but the drivers and length of the weakness vary between different areas. The euro area is on the brink […]

Week Ahead – Australia and Canada Kick Off Central Bank Bonanza

A litany of central bank meetings lies ahead in the first half of December. The ball will get rolling with the Reserve Bank of Australia and the Bank of Canada next week, both of which are expected to raise interest rates again, albeit at a slower pace. Meanwhile in America, business surveys and producer prices […]

Bank of Canada Hiking Cycle Could Be Drawing to a Close

The Bank of Canada won’t hit the brakes on interest rate increases next week, but it is likely to slow them down. And we believe next week’s increase could be the last in this cycle. We expect a 25 basis point increase in the overnight rate to 4.0% from the central bank—smaller than the 50 […]

Weekly Economic & Financial Commentary: Is This the Peak?

Summary United States: Payrolls Beat Expectations, but Signs of Moderation on the Horizon Total payrolls rose by 263K in November, with the unemployment rate holding steady at 3.7% and average hourly earning rising by 0.6%. Personal income and spending increased 0.7% and 0.8%, respectively, in October, while the core PCE deflator increased 0.2% (MoM) and […]

NZD/USD Down Despite Rise in Retail Sales

The New Zealand dollar has edged lower on Friday. In the European session, NZD/USD is trading at 0.6244, down 0.33%. Retail sales post modest gain It wasn’t a spectacular rebound by any means, but New Zealand’s retail sales showed a gain in Q3. Headline and core retail sales both rose a modest 0.4% QoQ. This […]

USD/JPY Rises in Subdued Trading

USD/JPY has reversed directions and posted gains on Friday, after three straight losing sessions. The yen is trading at 139.39, up 0.54% on the day. US markets are open for limited hours due to the Thanksgiving holiday, and there are no US releases on the schedule. Tokyo inflation hits 40-year high The caption above may […]

Inflation in Japan Out of Line, But Signs of Cooling Emerging

Tokyo’s headline inflation estimates put the annual price growth rate at 3.8% in November against 3.5% a month earlier and the 3.6% expected. The core index, which excludes food and energy prices, accelerated from 2.2% to 2.5% (the highest since 1992), suggesting that nationwide inflation continues to accelerate beyond the 2% target. Nevertheless, a country […]

Weekly Focus

Flash PMI’s for November turned out to be a mixed bag. US data disappointed as the manufacturing PMI dropped to 47.6 from 50.4 and service PMI pushed lower as well to 46.1 from 47.8. It is broadly in line with our view that the US economy is heading into a mild recession in early 2023. […]

Week Ahead – Decisive Week for the Dollar as PCE Inflation and NFP Reports Coming Up

After the Thanksgiving downtime that generated some further weakness for the greenback, investors will be looking for fresh direction from the barrage of US economic data that will be dominating the agenda in the coming week. The latest payrolls report will be the main attraction along with PCE inflation readings. CPI data out of Australia, […]