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We were surprised by the subdued reaction in the aftermath of the US CPI print. Rates markets haven't really budged all that much and investors continue to turn a blind eye to any signs the Fed might need to be less accommodative than what is being priced. read report
Things have been relatively quiet as the week gets going. It seems market participants are waiting for some more bite that we’re getting in today’s economic calendar. As things stand, the rates market is pricing in 90 basis points of cuts at the Federal Reserve in 2024. read report
We’re back to seeing broad based US Dollar outflows and record high US equities after a round of Fed Chair testimony in which Jerome Powell was celebrated by markets for embracing the rate cut outlook. read report
Fed Chair Powell stuck with his bias for a rate cut outlook in his Wednesday testimony, which helped to prop up the stock market and inspire currency demand against the Buck. Looking at the calendar for the remainder of the day, we’ve got German factory orders, the ECB policy decision, Canada trade, US trade, US initial jobless claims, and more Fed Chair Powell testimony. read report
Price action across asset classes has been all over the place this week. The US Dollar has been tracking lower, while US equities have come under some pressure. Meanwhile, it’s bitcoin and gold that have been getting most of the attention as they rocket into record high territory. read report
A lot of the attention in financial markets has been away from FX and stocks, with store of value assets old and new taking center stage. It seems the explosion in US debt has inspired many a trader to be looking for alternatives and those alternatives come in the form of gold and bitcoin. read report
Things have gotten off to a quiet start as the week gets going, though we have seen some movement that’s worth highlighting. Looking at the calendar for the remainder of the day, the only thing that really stands out is central bank speak from various ECB and Fed officials. read report
On Thursday, we got a more dovish leaning twist from noted hawk Fed Bostic, who said it would be appropriate to consider cutting rates this summer. At the same time, any Dollar bearishness from such comments were offset by elevated US PCE. read report
We haven’t seen all that much movement in markets over the past 24 hours. Volatility has come down, with currencies chopping around and US equities consolidating off record highs. The lackluster price action can be best reflected through a check in on OIS pricing which has held steady over the past week. read report
Economic data produced a mixed bag on Tuesday, leaving financial markets in an indecisive mood. We got some hotter than expected inflation data out of Japan, hawkish comments from BOE Ramsden, an upward revision to the US GDP tracker, softer Eurozone reads, and a miss from US durable goods. read report
