Eurozone Inflation and Future of Rate Hike Cycle

The ECB has only two more meetings for the rest of the year. Which means that the space to get inflation under control by the end of December is getting tight. The common bank is behind other major central banks in raising policy, which has kept the shared currency relatively weak. Therefore, there is a […]

FX Intervention: Risks for Solos, Not Yet for Accords

The US dollar is under some pressure on Tuesday morning, which can be attributed to the dollar’s local profit-taking after substantial gains on previous days. European equities and US index futures are also getting some relief, pulling back from lows. However, until we see a change in the fundamentals, bounces like today’s are likely to […]

Sunset Market Commentary

Markets The sell-everything-trade took a breather today. Stock markets eke out a small gain of about half a percent. It’s not a lot but at least they stop dropping for a moment. The EuroStoxx50 remains in the technical danger zone though. Core bonds surged in Asian and European dealings. It shouldn’t come as a big […]

US Housing Data, Core PCE Inflation Next on the Calendar

With the Fed trying to get on top of inflation no matter what it takes and showing no interest to come to investors’ rescue, traders will keep looking for any cracks within the US economy this week. US housing data will feature the calendar on Tuesday and Wednesday at 14:00 GMT, while the Fed’s favorite […]

Europe's Gas Crisis Escalates

Market movers today Market’s focus remains on central bank speeches, with ECB’s Lagarde as well as Fed’s Powell, Bostic, Bullard and Evans on the wires today. Economic data calendar is quieter, August retail sales data will be released for Sweden and Norway while consumer confidence indicators are due for release for Germany, France and Sweden. […]

Fed May be Making a Second Big Mistake, as Geopolitical Tensions with Russia Escalate

The Russian natural gas is now bubbling somewhere in the Baltic Sea, being wasted in front of the horrified eyes of hundreds of millions of Europeans suffering from a historical energy crisis. Why? Well, we don’t know exactly why, but two explosions were detected in the area, and damaged the Nord Stream pipeline system. Does […]

White House Downplaying Prospects of Agreement à la Plaza 1985

Markets The core bond relief couldn’t even last for a full day. The most eyepopping move occurred in UK markets, where the 2y yield at some point fell almost 40 bps but eventually closed 7.7 bps higher. The long end surged another 45 bps. Short term yields in the US were still down 4.1-6.1 bps […]

RBA Board to Raise the Cash Rate by 50 Basis Points Next Week

We confirm our view that the cash rate will increase by 50 basis points next week – global interest rates have risen further and the cash rate is still below the RBA’s estimate of neutral. The Reserve Bank Board meets next week on October 4. We expect it will decide to raise the cash rate […]

The CAD vs. the World: Mid-Term Scenarios for the Currency

In the middle of September 2022, the Canadian dollar has fallen to a 2-year low against the USD. What are the reasons behind this performance? On the one hand, we have rising inflation in the United States, recession fears, and anticipation of more aggressive Fed monetary policy decisions. On the other hand, softer economic data […]

No Letting Uup

It would appear we’re in for another day of risk-off trade, with parts of Asia recording heavy losses and Europe opening on the backfoot. Fear of tightening-induced recessions has wiped out the recovery we saw in stock markets over the bulk of the summer as investors were once again burned by an over-eagerness to catch […]