Diminishing Great Britain Retail Sales

As if the political storm hitting the UK was not enough, macroeconomic data is also not encouraging markets, adding pressure to the country’s assets. GBPUSD is losing more than 1.4% since the start of the day on Friday, back below 1.1060, and 2.4% from Thursday’s peak news of Liz Truss stepping down as prime minister. […]

EU (Sort of) Agrees on Gas Price Cap, Now What?

Following the conclusion of the first day of the European Council meeting yesterday, it emerged that EU leaders had finally agreed on what could be called a price cap on Russian oil. It meant an about-face from Germany, which had opposed such action up until now. Italian PM Draghi delivered a speech chastising German leaders […]

Sunset Market Commentary

Markets It’s rather unusual that US, German and UK yield curve all move in a different direction, yet this week it was the case. UK Gilts obviously outperformed US Treasuries and German Bunds. The UK yield curve bull flattened on a weekly basis with yields 13 bps (2-yr) to 75 bps (30-yr) lower. The end […]

Weekly Focus

UK Prime Minister Liz Truss stepped down this week after only 44 days in the office. The resignation follows heavy pushback on the ‘mini-budget’ presented in late September, which sparked fears of even more persistent inflation and much stronger rate hikes by the Bank of England. The new chancellor Jeremy Hunt has already overturned many […]

Time to Blink?

USD/JPY rallies as BoJ might stay dovish The Japanese yen weakens as quantitative tightening remains a remote prospect. As its currency sank to a 32-year low, the Bank of Japan’s ultra-loose monetary policy has become increasingly at odds with the finance ministry’s view. The central bank may still deem it premature to shift away from […]

Week Ahead – Crucial ECB and BoJ Decisions on the Menu

A central bank extravaganza lies ahead. The show will kick off with the Bank of Canada meeting, where markets expect another rate increase but are split on the size. Meanwhile in Europe, a triple-barreled hike by the ECB is already locked in, putting the emphasis on the press conference. Finally, the Bank of Japan is […]

The Weekly Bottom Line: Inflation Leading to a Drop in Sentiment

U.S. Highlights UK policymakers abruptly U-turned on its recently proposed “mini” budget, forcing Prime Minister Liz Truss to resign. Existing home sales fell 1.5% m/m in September to 4.7 million units. Sales have now fallen for eight consecutive months and are down 23% year-to-date. Housing starts fell 8.1% m/m to 1.4 million units, with declines […]

Bank of Canada to Hike Rates Again Amid Inflation Fight

The Canadian economy is slowing, but inflation is still too high to prevent another aggressive interest rate hike from the Bank of Canada. We expect a 50 basis point increase next week to take the overnight rate to 3.75%. That’s smaller than the 75 basis point hike in September and the 100 basis point jump […]

Weekly Economic & Financial Commentary: Momentum Continues to Slow

United States: Momentum Continues to Slow This week’s data show that while the U.S. economy has remained resilient thus far, tighter monetary policy is certainly starting to impact some key sectors. Industrial production regained its footing in September, but there are signs of slower growth ahead, while regional manufacturing surveys support this loss of momentum. […]

Week Ahead – Big Tech Earnings Eyed

US Wall Street will pay close attention to the first look at third-quarter GDP. After two consecutive quarters of negative readings, growth is expected to bounce back into expansion territory with a 2.3% reading. The consensus range for third-quarter GDP is between 1.1% and 3.0%. The October flash PMIs will also closely be watched, with […]