UK Inflation Unexpectedly Reached Double Digits (First Time Since 1982) in July

Markets: A dramatic sell-off in core bonds marked today’s market action. A number of smaller events culminated an impressive move. Yesterday’s earnings by US retailers Wallmart and Home Depot set things in motion. They beat consensus, putting away most pessimistic growth scenarios. Today’s US retail sales flatlined for the headline numbers, but were more upbeat […]

Fed Minutes Showed Continued Commitment to Bringing Inflation Back to Target

The minutes from the July 26-27, 2022 Federal Open Market Committee (FOMC) meeting showed that curtailing inflation remains of paramount importance to the Fed. On the progression of the economy, the Committee members noted that “recent indicators of spending and production had softened. Nonetheless, job gains had been robust in recent months, and the unemployment […]

The Pendulum Between Inflation and Growth Fears Swung from One Extreme to the Other

Markets Since the beginning of the year up until mid-June, investors turned a blind eye to growth risks, focusing solely on inflation developments and changing reaction functions of central banks (normalization/tightening). This resulted in an unseen core bond sell-off. Ever since even the SNB hiked its policy rate, attention turned to economic consequences of these […]

July Retail Sales for UK, Canada

Retail sales have become a bellwether of the economy, and consequently for the movement of currencies. Additionally, they can swing market sentiment, particularly if it’s a major economy that’s reporting. Tomorrow there are two currency majors reporting the latest figures, and that could shake up their respective pairs a bit. Retail sales figures are particularly […]

Aussie Bounces Back After Soft Jobs Report

The Australian dollar edged lower following today’s Australian employment report but has reversed directions. In the European session, AUD/USD is trading at 0.6957, up 0.28%. Australian employment report disappoints Australia released the July employment report, and the numbers were surprisingly soft. The economy lost 40.9 thousand jobs, well below the estimate of 25.0 thousand. This […]

Fed Minutes Did Not Cheer Stocks and Ironed USD Return to Growth

The US dollar slowly added for the third trading session, returning to levels of three weeks ago. While the published FOMC meeting minutes did not cause a sharp reaction, the FX dynamics of the past week are more indicative of the end of a corrective pullback. And we would not be surprised if the Dollar’s […]

ECB Schnabel's Comments a Very Strong Nod Towards a 50 bps Rate Hike at September Meeting

Markets: An interview by ECB Schnabel grabs most headlines today. She told Reuters that concerns about the inflation outlook, which triggered a 50 bps rate hike in July, have not been alleviated. The move wasn’t enough to alter the outlook and even a recession on its own would not be enough to tame inflation pressures. […]

British Dips Below 1.20, Retail Sales Next

The British pound continues to lose ground and has fallen below the 1.20 line for the first time since July 26th. GBP/USD is trading at 1.1996 in the North American session, down 0.47%. Pound eyes UK retail sales It has been a busy economic calendar in the UK this week. Retail sales will wrap things […]

Cliff Notes: Labour Market Strength to Prove a Key Determinant of Policy in 2023

Key insights from the week that was. The strength of the Australian labour market was a key talking point this week as the unemployment and underemployment rates reached new multi-decade lows of 3.4% and 6.0% respectively. Intriguingly, this occurred as the Australian economy lost 41k jobs and total hours worked declined 0.8%, offset by a […]

Hawkish FOMC comments and Norges Bank hike

Market movers today It will be a very quiet day on the data front today with only UK retail sales and German PPI of interest. The 60 second overview Norway: Norges Bank (NB) goes ‘front-loaded’ and hiked rates by 50bp. As expected, NB hiked rates by 50bp to 1.75%. This was widely expected after the […]