Canada's Economy Edges Up in July, Points to a Flat Reading for August  

The Canadian economy expanded by 0.1% month/month (m/m) in July, beating Statistics Canada’s flash estimate of -0.1%. The flash estimate for August was essentially flat. July’s increase in activity was concentrated in the goods sector. The goods-producing sector rose 0.5%, while the service-producing sector declined by 0.1%. Overall, output expanding in 11 of the 20 […]

Sunset Market Commentary

Markets Yesterday, the ‘Bank of England bond market intervention’ brought some relief to the recent UK (and broader) sell-off. Optimists hoped this to be harbinger of some consolidation. At least for now, this hope stays fragile at best.  European markets this morning failed to build on yesterday’s WS risk rebound. The news flow again didn’t […]

China September PMI and Potential Recovery

The yuan has been depreciating against the dollar, as have most other currencies. While not as dramatic as the yen, the rise in the USDCNY pair has started to raise concerns from Chinese officials. In the last couple of days, several formal outlets have come out to “warn” that yuan depreciation won’t continue. Some analysts […]

Cliff Notes: Another Wild Ride for Financial Markets

Key insights from the week that was. This week, Australian data was broadly constructive on the outlook. Meanwhile, considerable volatility was present financial markets after the announcement of the UK Government’s expansionary Fiscal Update. Australian retail sales came in slightly above expectations in August with a solid 0.6% lift gain largely centred on food retailing […]

Bailey Could Become a National Hero, or a Disaster

It was a terribly ugly day across the equity and bond markets yesterday. But despite the financial calamity, Porsche had a successful IPO and secured the valuation it was looking for, even though the shares ended flat the first day of trading on the back of an overall morose investor mood. Then, the Americans took […]

Hikes Continue Despite Rising Recession Worries

Market movers today The implications for financial markets of the flurry of G10 central bank meetings over the past two days remain a key focus, notably the decision by the Japanese finance ministry yesterday to intervene in the FX market to support the Japanese yen—something that could have broader market impact also in our parts […]

What a Week – And It's Not Over Yet

A busy week for central banks come to an end with plenty of rate hikes, increased prospects of slowing growth, that leave investors with a bad taste in their mouth. But the week is not over. The Italian elections due Sunday will likely continue pressuring the euro lower. What a busy week We had a […]

Cliff Notes: The Fight Against Inflation Reaches New Heights

Key insights from the week that was. This week has been all about monetary policy, in particular global central banks’ fight against inflation. Their rhetoric, the implications for global growth and the market’s reaction have led us to revise down our Australian dollar view. The minutes of the RBA’s September meeting presented a relatively balanced […]

We Have Lowered Our AUD Forecast to US 65¢ by End 2022

Following the September meeting of the FOMC we have raised our terminal forecast rate for the federal funds rate from 4.125% to 4.625% peaking at the January 2023 FOMC meeting. That forecast follows the near term guidance we saw from the FOMC in their latest Report. That entails us lifting our expectation for the November […]

Both US and European Indices Headed for a Retest of June Correction Low

Markets Wednesday’s ‘hawkish’ 75 bps Fed rate hike only reinforced markets’ belief that tightening of global financial conditions still has some way to go. Other central banks including the Norges Bank (+ 50 bps), the Swiss national bank (+75%) or the Bank of England (+0.50%) mostly delivered as expected. Some in the market expected bolder […]