The Mother of All U-Turns

Another turbulent start to the week, albeit a positive one broadly speaking with equity markets around 1% higher in Europe after a decent start to the week in Asia. Since Liz Truss became UK Prime Minister, uneventful days have eluded us and this week has also got off to another hectic start. While the Prime […]

Sunset Market Commentary

Markets Jeremy Hunt to the rescue! The new UK Chancellor in an attempt to restore the UK’s credibility shelved the lion part of previous Chancellor Kwarteng’s mini-budget, while also lowering the bill to shield UK consumers and companies from expected surges in OFGEM’s regulated maximum gas & electricity prices. Around two-thirds of the £45bn mini […]

Canada: Business Optimism and Inflation Expectations Soften 

The Bank of Canada Business Outlook Survey (BOS) reported a continued drop in Canadian business optimism in the third quarter of 2022. The BOS indicator, a statistical summary of survey results, was 1.69 in 2022Q3, down from 4.87 in 2022Q2. Businesses expect demand to weaken, with the statement noting that “firms’ sales outlooks have softened. […]

NZ CPI Review: OCR Now Expected to Peak at 5%

OCR Now Expected to Peak at 5% We now expect the Official Cash Rate to reach a peak of 5% for this cycle (previously 4.5%). We expect a 75 basis point hike to 4.25% at the upcoming November Monetary Policy Statement, a step up from the 50 basis point increases in the last few reviews. […]

U-turn from Hunt Restores Investors' Confidence in UK

Market movers today Today, we get German ZEW expectations, which will probably indicate a continued downturn in the macro momentum. In the US, we get industrial production figures for September. Markets will listen in on hints on the Fed’s take on last week’s high inflation figures, when FOMC members Bostic and Kashkari speak. The 60 […]

Pound Licks Wounds as Uncertainty Persists

GBP/USD bounces after government U-turn Sterling recouped losses after investors found relief in Britain’s reversal on tax cuts. The original plan of a largely unfunded fiscal package had triggered a flight to safety. But buyers of Sterling-denominated assets were quick to return to the table after the government was forced into an awkward U-turn. Meanwhile, […]

Week Ahead – Earnings Season is Back

US It is now all about inflation data.  The focus was temporarily on the labour market but everyone knows that the Fed is primarily concerned with what is happening with inflation. Wall Street will first get a look at producer prices on Wednesday and then CPI the next day. August data showed high inflation remains […]

Forward Guidance: U.S. Core Inflation to Tick Higher in September Despite Slower Energy Price Growth

U.S. headline inflation likely fell for a third consecutive month in September as oil prices dropped (by 8.6% month-over-month). Gasoline prices were up more than 16% from a year ago, easing down from a 26% year-over-year jump in August. While headline inflation began its descent in June, food price growth has kept climbing—hitting a new […]

The Weekly Bottom Line: Canada

U.S. Highlights The last jobs report before the Federal Reserve’s November meeting showed that 263k jobs were added in September, bringing the unemployment rate back down to 3.5%. ISM Manufacturing and Services PMIs indicate that demand for goods is slowing swiftly, while demand for services is slowing more gradually and has yet to yield substantial […]

Weekly Economic & Financial Commentary: Labor Market Cooling Jolts Markets

Summary United States: Labor Market Cooling Jolts Markets Total payrolls rose by 263K in September, a shade above consensus. The unemployment rate fell to 3.5%, while average hourly earning increased 0.3%. Job opening plummeted by 1.1 million vacancies, according to September’s JOLTS. The ISM manufacturing survey fell to 50.9 in September, while ISM services slipped […]