Dollar is Getting its Momentum Back

Markets: A new day, a new sell-off on core bond markets. This week showed that the Summer lull is definitely over. Four Fed members dotted the i’s and crossed the t’s yesterday. Current market positioning goes against Fed guidance. Don’t fight the Fed, they said… The US central bank will push forward with its aggressive […]

Week Ahead – Will the Fed Fire Back at Jackson Hole?

With the summer coming to a close, Fed officials will head to Jackson Hole for their annual symposium. Financial conditions have loosened lately despite the forceful rate increases, which is counterproductive for the central bank. If they push back, that could spell trouble for risk assets but good news for the dollar.  Fed summer camp […]

Eurozone Flash PMIs to Highlight Recession Risks as Energy Crisis Worsens

The Eurozone economy may have notched up impressive growth in the second quarter, but conditions have started to deteriorate rapidly in the third quarter. The flash PMI estimates by S&P Global due on Tuesday will reveal whether business activity improved or slumped in August. Investors will likely be paying particularly close attention to Germany – […]

Will the UK PMIs Intensify Worries Over a Recession?

After seeing UK inflation accelerating to double digits earlier this week, pound traders may now turn their gaze to the flash UK Purchasing Managers Indices (PMIs) for August, due to be released out on Tuesday at 08:30 GMT. With the preliminary GDP data revealing contraction in the second quarter of the year, traders may want […]

Research China

In Research China: The risk of a Taiwan war and what it implies – part 1, 11 August, we looked at the risk of a Taiwan war. In this follow-up we consider the implications, both of a possible war and of the rising tensions. Apart from being a human tragedy with significant loss of lives, […]

Weekly Focus

Macroeconomic indicators this week pointed to further headwinds for the global economy. In the US, the New York Empire Manufacturing Index slumped to -31.3 (from 11.1) in August, the lowest level since slump after the first Covid-19 lockdown. The sharp drop was driven by weaker current conditions, while the expectations index improved slightly. The current […]

Forward Guidance: Jobs Report to Confirm a Sizzling Hot Summer Market

Exceptionally tight labour market conditions showed no sign of loosening in June. And next week’s Survey of Payrolls and Hours (SEPH) is expected to reinforce that message. Employment growth has slowed—as small outright declines in already-reported labour force surveys for June and July showed. But that has more to do with a shortage of workers […]

How Bad is China's Economic Slowdown? Is it a Recession?

Who will save the global economy if the main engine of global economic growth, China, is slowing down? As growth in major global economies slows a result of high inflation, many hoped that China would come to the world’s rescue. Unfortunately, China is also suffering from its problems. To everyone’s shock, the Chinese economy grew […]

Weekly Economic & Financial Commentary: The Fed Still Has More Work to Do

Summary United States: Expansion Not Yet Heading to the Gallows An increase in real retail sales by our estimates and a rebound in industrial production in July offered evidence beyond recent jobs data that the U.S. economy is not yet in a recession. That said, with new orders in the manufacturing sector slowing sharply and […]

Week Ahead – On to Jackson Hole

The event we’ve all been waiting for Jackson Hole has been heavily discussed since the Fed’s supposed “dovish pivot” last month when it adopted a more data-dependent stance. While policymakers have pushed back against the idea of a pivot, markets have continued to price in a slower path of tightening. Chair Jerome Powell could use […]