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The new week gets going with financial markets still trying as hard as they can to push the narrative of peak rates in the US. We’ve seen an aggressive repricing of Fed expectations in recent weeks on the back of softer economic data out of the US, including softer inflation data. read report
Thursday’s booming Chicago PMI print caught the currency market off guard, forcing a repricing of Fed expectations. The data once again reinforces a higher for longer Fed policy trajectory, which in turn has moved yield differentials back in favor of the Buck. read report
A wave of inflation misses around the globe has helped to embolden doves, with the market continuing to price in peak rates and a move from central banks towards more investor friendly monetary policy into 2024. read report
Financial markets continue to mostly be driven off Fed expectations. And in recent weeks, we’ve seen a big push on behalf of the market to price in peak rates. Fed officials were out in full force on Tuesday offering up their views. The trouble is, these views are on the whole inconsistent with market expectations. read report
The market got off to a quiet start on Monday, though the big picture stories were all bearish leaning. Chinese equity markets took an early blow after industrial profits decelerated. read report
Markets will get back to fuller form on this Monday as the US returns from the holiday break. As things stand, we’ve seen a wave of Dollar selling and risk on flow in recent days, mostly on the back of an expectation that inflation has peaked out in the US. read report
Trading conditions are going to remain exceptionally thin on this Friday on account of the US Thanksgiving holiday overhang. But overall, we’re closing out a week in which the market has chosen to continue to push the narrative of peak rates and an expectation for a shift towards more investor friendly monetary policy. read report
Currencies and stocks are once again seemingly at odds over their interpretation of US economic data and the impact on monetary policy. Key standouts on Thursday’s calendar come from German, Eurozone, UK PMI reads, and Canada wholesale sales. The US market is closed for the Thanksgiving holiday. read report
We’ve been warning that the market has once again gotten ahead of itself after pricing in a Fed policy reversal after last week’s round of softer inflation data out of the US. Yesterday’s Fed Minutes backed this up, with the central bank showing no such willingness to reverse policy. read report
Broad based US Dollar weakness continues to bolster market sentiment. Investors have chosen to conclude recent economic data in the US, including softer inflation reads, will translate to a Fed cut. And yet, the Fed has sent no such message. read report
