Sunset Market Commentary

Markets UK gilts underperformed German Bunds and US Treasuries today. Fitch’s decision to lower the outlook on the country’s AA- rating from stable to negative triggered the move. The rating agency cited increased fiscal risks coming from the government’s lavish spending plans. UK yields add 10.2 bps (2-yr) to 14.3 bps (30-yr) with intraday dynamics […]

US September NFP: More Reasons for the Fed

Nonfarm Payrolls in the US are expected to come in above “normal” once again. That would affirm the notion that the US employment situation remains “hot”, and that the Fed can focus on getting inflation down. The total number of people employed in the US is higher now than it was before the pandemic, suggesting […]

Cliff Notes: A Turning Point for Policy

Key insights from the week that was. The RBA surprised markets this week by slowing the pace of rate hikes, opting for a 25bp move against expectations of a 50bp increase. Meanwhile, the RBNZ continued to show a heavy hand against domestic inflation pressures, having delivered a fifth consecutive 50bp rate hike. In explaining their […]

It's NFP Time

Market movers today Today’s highlight will be the US jobs report. Consensus is looking for some easing in employment growth (NFP +250k), but given the strength of the recent leading indicators, we continue to see modest upside risks to this (280k). Focus also on labour force participation and wage inflation. German industrial production for August […]

What Would be a Delicious Jobs Data Cocktail?

Equities retreated, the US yields and the US dollar rebounded as more Federal Reserve (Fed) members threw hawkish comments to defend their fight against inflation. Neel Kashkari, who used to be a dovish Fed member said that the Fed is ‘quite a ways away’ from pausing its rate hike cycle, while the US Treasury Secretary, […]

USD/JPY Eyes US Nonfarm Payrolls

USD/JPY has been hovering close to the 145 line most of the week, and the trend has continued today. In the European session, USD/JPY is trading at 144.81, down 0.21%. The US releases nonfarm payrolls later today. The release once received massive coverage and was usually a market-move, but the new era of high inflation […]

Price Rises in Germany Not Causing a Surge in Retail Sales

Import prices in Germany jumped by 4.3% in August, dashing hopes of waning inflationary pressures. The year-on-year growth rate has accelerated from 28.9% to 32.7%, marking a new record since 1974 – another consequence of the single currency’s weakness. Retail sales for the same month declined by 1.3% m/m and 4.3% y/y on an inflation-adjusted […]

Euro Dips after Solid US Jobs Report

EUR/USD is unchanged today after a nasty two-day slide, trading at 0.9792 in the European session. The euro flirted with the symbolic parity line on Wednesday, but then plunged 200 points. German retail sales underperforms Germany wrapped up the week with soft data, although the euro shrugged off the weak numbers. Retail sales fell 1.3% […]

US: Hiring Remains Strong in September, But Some Evidence of Slowing 

The U.S. economy added 263k jobs in September, coming in slightly above the consensus forecast of 250k. Revisions to the two prior months were slightly positive, with July’s reading adding an additional 11k jobs to the previously reported figures, while August was unchanged at 315k. Employment gains on the service-side (+244k) were largely concentrated in […]

NFP React: Labor Market Remains Robust, Fed Can Stick to Hawkish Shtick

US stocks tumbled as job strength remains, which means we most likely won’t be seeing a Fed downshift at the next FOMC meeting in November. Treasury yields rose alongside the US dollar after another solid nonfarm payroll report. The risks of the Fed remaining aggressive with the tightening of monetary policy still remains on the […]