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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
The market is perhaps getting a little worried about being overcooked following the latest record prints in US equities. The fact that the US government shutdown deadline is approaching with no budget deal to speak of is also ruffling some feathers. read report
The market has been trading with some caution as the new week gets going. US equity futures are off a bit and the US Dollar is broadly bid. As far as US rate expectations go, the OIS market is now pricing a cumulative 82 basis points of rate cuts in 2024. read report
We often highlight the fact that the market has an amazing ability to focus in on what it wants to focus in on, while dismissing anything that might call its views into question. This week, the market has chosen to feel good about a number of things. read report
In our Wednesday special report previewing the Fed Minutes, we said the balance of risk was tilted in favor of a risk on reaction post Minutes. Indeed, this is how things played out. Key standouts on Thursday’s calendar come from German, Eurozone, and UK PMI reads, Eurozone inflation, the ECB Minutes, Canada retail sales, US initial jobless claims, and existing home sales. read report
