Can the EU's Energy Plan Rescue the Euro from the Doldrums?

The euro has been besieged on several fronts this year. Having already been on the backfoot due to the widening monetary policy divergence with the United States, the euro then had to contend with the immediate fallout of the war in Ukraine as harsh sanctions were slapped on Russia. But it is the ensuing energy […]

US: Retail Sales Continued to Grow as Sales at Car Dealers Outperformed

Retail sales were up 0.3% month-on-month (m/m) in August – above the consensus forecast (-0.1% m/m) –  and higher than the flat reading in July. Sales at autos & parts dealers were the major contributor to today’s gains, with a 2.8% m/m rebound from July’s 2.0% m/m decline. Excluding autos, retail sales were down 0.3% […]

Eurozone Trade Deficit Calls for a Stronger Euro

According to a new Eurostat publication, the eurozone’s seasonally adjusted foreign trade deficit widened to 40bn in July. Since last October, the region has found itself in the unfamiliar role of a net importer. That is a notable reversal after about ten years of exports significantly exceeding imports. From 1999 to 2012, exports and imports […]

Sunset Market Commentary

Markets ECB members over the past 24 hours did little or nothing to counter the post US CPI inflation bond sell-off. On the contrary, they seem to embrace it and added fuel to the fire. ECB Kazaks (Latvia) thinks that the ECB will continue raising rates beyond February 2023. That’s at least another 4 rate […]

Yen: What Just Happened (and What's Coming)?

The yen has been, of course, on a wild ride lately. But there were some surprise moves yesterday which need some explaining, since they could shed some light on whether or not the USDJPY has hit a ceiling. There are some important implications for the future of the yen, and something traders need to be […]

Cliff Notes: A Wild Ride for Global Markets

Key insights from the week that was. This week, Australian data provided a constructive view on the economic outlook. Global financial markets meanwhile were jolted by the US’ strong August CPI report. Beginning first with consumer sentiment, the Westpac-MI survey reported a bounce in confidence, the headline index gaining 3.9%. Coming at a time of […]

Recession Pricing Drives Deeper Curve Inversion

Market movers today The US releases consumer confidence from University of Michigan for September. It has rebounded a bit in recent months from low levels. Focus will also be on the inflation expectations index on 5-10 year horizon, which reached 3.1% a couple of months ago but has since fallen back to 2.9%. It still […]

Equities Under Pressure on Hawkish Fed Expectations

US railroad companies and the unions representing their workers reached a tentative agreement early Thursday to prevent a rail strike in the US. Unions have to vote now. The deal includes a pay increase of 7% this year, as well as retroactive increases for the previous two years, and two more raises in 2023 and […]

World Bank Warned for a “Devastating” Recession Next Year

Markets Curve flattening/inversion remained the ‘by default’ option on EMU and US interest rate markets. Both EMU and US 2-y yields touched multi-year highs as markets assume that the Fed and the ECB have no choice but to continue their front-loading game. At the same time, US markets don’t completely give up the idea that […]

Ether Lost Support But Not the Advantage, Yet

Market picture Bitcoin has lost 1.6% over the last 24 hours to $19,777 amid renewed pressure on risk-sensitive assets. BTC remains just under the critical $20K round level, where it got support for the past three months. Ethereum lost the speculative support it received before the move to PoS. Over the last day, Ether lost […]