Fed Continues to Guide US Economy Towards a Recession

Despite falling into a technical recession during H1, the recent easing in gasoline prices will support positive real private consumption growth during H2. Headline inflation has peaked, but labour market and underlying price pressures remain strong. Fed will be forced to hike US economy into a recession in 2023. We adjust the GDP forecasts to […]

ISM Manufacturing Remains Unchanged, Registering 27th Consecutive Month of Expansion

The August ISM Manufacturing index was unchanged in August at 52.8, beating expectations for a pullback to 51.9. New orders rose by 3.3 percentage points to 51.3, while new export orders fell by 3.2 percentage points to 49.4. The backlog of orders sub-index came in at 53.0, rising 1.7 percentage points from July’s 51.3 print. […]

Cliff Notes: Jackson Hole Casts a Long Shadow

Key insights from the week that was. The Australian data flow started the week with a positive surprise, but has disappointed since. Against an expectation for another broadly flat outcome, July retail sales instead jumped 1.3% higher. Apparel and department store sales were particularly strong, while consumer spending at cafes & restaurants, ‘other’ retail and […]

Strong US Data supports Another 75bp Hike from Fed

Market movers today Market focus will be on the US labour market report today. Consensus is looking for easing jobs growth (NFP +290k) in line with lower PMI employment indices and the ADP report released earlier this week. However, even with slowing employment growth the labour market remains extremely tight. Another increase in wage growth […]

Dear God, We Need Softer NFP to Stop the USD Rally – Amen

US equities had another hectic trading session on Thursday. America took over a bearish market from the Europeans, and news that China locks down 21 million people in Chengdu further stressed investors and sent the S&P 500 to a fresh low since July. The index came very close to the major 61.8% Fibonacci retracement on […]

Sunset Market Commentary

Markets: As was the case earlier this week, markets couldn’t do anything else but guessing which clues Fed Chair Powell will give on the Fed’s intentions in the new era where ‘forward guidance’ is decisively removed from centrale bankers’ toolkit. It’s some kind of ‘squaring of the circle’ problem. Is there still room to clarify […]

US Fed May Not Yield to Market Pressure

EUR/USD weakens over bleak outlook The US dollar remains strong over the prospect of sustained rate hikes. The euro’s failure to defend the parity level has revealed a lack of confidence in Europe’s outlook. An overwhelmingly pessimistic mood may continue to depress the single currency, and the latest consolidation could be a mere pause as […]

The US Dollar is Still the King, But!

Despite a slight decline from its highest levels since 2002, around 109 range, it is just a correction, and the green king, the US dollar, will resume its rally. On both sides of the dollar’s strength equation, motives exist for it to continue its gains. One is betting on the continued weakness of its major […]

Weekly Focus

As markets continue to price in higher natural gas and electricity prices for the coming year, the euro area looks increasingly more vulnerable and EUR/USD traded below parity to the lowest level in almost 20 years. The energy crisis also spilled over to other markets. Investors are turning more worried about second round effects on […]

Week Ahead – NFP Report, Eurozone Inflation Under the Microscope as Markets Wobble

The US nonfarm payrolls report will take centre stage next week as speculation about the size of the Fed’s next rate hike goes into overdrive. Investors will also be keeping a close eye on the latest inflation readings in the euro area ahead of the September rate decision amid growing gloom about the bloc’s economic […]