Forward Guidance: Post-lockdown Economic Momentum Fades with the Summer

Canadian GDP likely remained flat through July—narrowly improving on Statistics Canada’s advance estimate for a 0.1% decline. It ticked up in August but not by much, gaining 0.1%. All three months point to a broader levelling out of economic activity as the post-pandemic rebound loses steam. Though the full impact of surging inflation and interest […]

Week Ahead – Euro Eyes Italian Elections and Flash CPI, Dollar May Take a Backseat

With the Fed meeting out of the way, a quieter week is on the horizon, barring of course any flare up of tensions between Russia and Ukraine. Either way, the spotlight will probably fall on the euro as far-right parties are expected to gain ground in Italy’s parliamentary election on Sunday, while preliminary inflation readings […]

The Great British Exodus

The sell-off in the British markets intensified on Friday. Traders seem to have held back from action until last in the run-up to the Bank of England rate decisions and the interim budget announcement. Both of these events failed to impress the markets. The Bank of England raised the rate by 50 points accumulating behind […]

The Weekly Bottom Line: The FOMC Aims High

U.S. Highlights The Federal Reserve raised interest rates by 75bps for the third consecutive meeting, bringing the federal funds rate to its highest level in 14 years. FOMC Chair Powell reiterated his Jackson Hole speech, stating that the Fed is willing to tolerate slower growth and higher unemployment to bring inflation back to its 2% […]

Weekly Economic & Financial Commentary: Shot Across the Bow, Japan Intervenes Against Surging Dollar

Summary United States: Whatever It Takes As widely expected, the FOMC raised the target range for the fed funds rate by 75 bps for the third consecutive time. The housing market continues to buckle under the pressure of higher mortgage rates, while the Leading Economic Index has signaled a broader loss of momentum across the […]

Week Ahead – Recession Fears Mounting

US Now that Wall Street has had some time to digest the FOMC decision, the focus shifts to how quickly the economy is weakening and a wave of Fed speak.  A wide range of economic releases includes more Fed regional surveys, durable goods orders, consumer confidence, new home sales, initial jobless claims, personal income & […]

Forex and Cryptocurrencies Forecast

EUR/USD: In Search of a New Bottom Last week, all the attention of the markets was focused on the FOMC meeting of the US Federal Reserve, which took place on September 21. The probability of another rate hike by 75 basis points (bp) had been estimated at 74%, and by 100 bps at 26%. The […]

Italy Turns Right

Market movers today A fairly quiet start to the week in terms of economic data, German September Ifo is expected to decline further in line with the PMIs released last Friday. Markets will also focus on several central bank speeches throughout the week following the September meetings. Today, ECB’s Lagarde, de Guindos and Panetta as […]

The Day after Draghi

The FX markets kick off the week on an extremely chaotic note. Both the pound and the euro are being severely punished for the political decisions that are taken in the UK and in Italy respectively. Italy turns right As expected, the far-right candidate Giorgia Meloni won a clear majority in Italy at yesterday’s election, […]

UK Kwarteng Said There's More to Come

Markets UK (core?!) bonds got an incredible beating on Friday. Markets didn’t take the country’s borrowing and spending spree as presented by Min Fin Kwarteng well. Risk premia (gaping deficits) as well as BoE tightening bets sharply rose, leading to yield changes of a whopping 43.3 bps at the short end of the curve and […]