How Austere?

Better-than-expected US retail sales didn’t please investors yesterday, as it fueled, again, inflation expectations. Higher inflation expectations fueled the hawkish Federal Reserve (Fed) expectations. And hawkish Fed expectations fueled recession worries – without however Fed being there to disperse cheap money. US indices gave back gains yesterday. The S&P500 slid 0.83% and Nasdaq fell 1.54%. […]

There's a Lack of momentum within ECB to Push for Another 75 bps Hike in Dec

Markets EUR/USD didn’t revisit Tuesday’s high yesterday as an early attempt to regain traction was blocked by stronger US retail sales and by ECB comments. The pair eventually closed below 1.04 and is trading there still. Initial optimism came from NATO and international comments suggesting that the missile on Polish territory was an unfortunate accident […]

Aussie Slides Despite Strong Job Data

The Australian dollar is considerably lower on Thursday. In the European session, AUD/USD is trading at 0.6671, down 1.02%. Employment data shines Australia’s tight labor market got even tighter in October. Total employment jumped by 32,200, up from just 900 in September. The numbers were especially encouraging as full-time employment jumped by 47,100, up from […]

Yen Dips ahead of Key Inflation Data

The Japanese yen continues to flirt with the 140 level. In the European session, USD/JPY is trading at 140.25, up 0.51%. Japan releases the October National CPI later today, which is expected to rise to 3.5%, following the September reading of 3.0%. Inflation has been on the rise and is above the BoJ’s target of […]

Stalled Rebound

The risk rebound in the markets has stalled and equity markets are down around 1% on Thursday following quite a good run over the last month. The day we’ve all been waiting for The Autumn Statement has been a long time coming after the disastrous mini-budget almost two months ago. The UK’s fiscal credibility was […]

US: Inflation Surprises to the Downside in October, Fed Likely to Start Slowing Pace of Rate Hikes  

Consumer price inflation increased by 0.4% month-on-month (m/m) in October, matching the gain in September. On a year-over-year (y/y) basis, headline inflation edged lower by 0.5 percentage points (pp) from September, slowing to 7.7%. Energy prices increased by 1.8% m/m, as gasoline prices were higher by 4.0% m/m, while energy services declined by 1.2% m/m. […]

US Consumer Sentiment and Election Follow-up

Two days after the close of the polls in the US, and officially which party has won control of the Congress is still not known. However, given the trends and projections, the results are pretty much in line with what was expected. That is: Republicans take control of the House, but by a smaller margin […]

Sunset Market Commentary

Markets At last! At last a below-consensus US inflation number. At last a below-consensus US inflation number at the right time, coming on the heels of last week’s Fed meeting. Recall how markets initially interpreted the FOMC policy statement as suggesting that last week’s 75 bps rate hike was the final such aggressive one. Recall […]

Cliff Notes: Conflicting Forces for Sentiment

Key insights from the week that was. This week delivered a very weak update for Australian consumer sentiment, highlighting the impact of declining real income and high interest rates. In stark contrast however, market confidence surged in the US today following a better-than-expected CPI print and a broadly neutral outcome in Tuesday’s mid-term elections. Beginning […]

US CPI Surprising on the Downside Sparks Risk Rally

Market movers today The European Commission will publish its autumn forecasts for the European countries today. We will look for the fiscal projections into next year. Today also brings UK GDP growth for Q3 which we expect will be in negative territory (-0.3% q/q), marking an official start of the recession. In the US, we […]