Kuroda's last meeting at BoJ tomorrow - no change expected this time round, but you never know with. Changes to YCC more likely in April-June, when Fed will peak, which 'should' support softer USDJPY going into Q2
“There’s a reasonable chance that the Fed will have to bring the Fed Funds rate to 6% & then keep it there for an extended period to slow the economy & get inflation down to near 2%:” BlackRock's Rieder...(we are nearly there already...?, Fed Beige Book survey: US businesses see moderation in inflation ahead, JOLTS : The number of US job openings fell to 10.8mln in Jan, down from 11.2 in Dec but exceeding consensus estimates of 10.5mln, meaning labor market is still tighter than anticipated (..but..with construction openings down 240k, a 49% decline m/m-leading?
China continues to experience domestic disinflation. In February CPI prices rose 1.0% y-o-y (versus 2.1% in January), while actually declining 0.5% m-o-m (versus rising 0.8% in January). PPI prices declined 1.4% y-o-y, their fifth decline in a row, maybe a good sign for things to come in US and Europe
BoC : For the first time in about a year, the Bank of Canada kept its main interest rate unchanged at a scheduled policy decision, arguing economic data point to inflation sharply decelerating this year toward its 2% targe
Biden to propose 5.2% Federal pay increase
Johnson Redbook same-store sales have hit the lowest growth rate in 2 years .This proxy for physical retail activity confirms other data suggesting recent consumer weakness
"A French company has won the contract for post-Brexit border checks, in a blow to hopes that domestic businesses would be prioritised in public procurement." The Brexit pennies dropped, as the gentle rain from heaven upon the journalists beneath
"US 10-yr yields are consistent with the prevailing narrative of a gently does it, soft-landing scenario. As a result, the probability of a hard landing is perhaps being under-estimated in our view...We have not changed our view that bond yields will be lower by year end:" HSBC
BMO: "Our take is that Powell was simply hedging against the potential that another massive upside surprise in NFP and/or CPI forces the Fed’s hand to move 50 bp as it continues the credibility chase."
SNB posts biggest loss in its 115-year history (every CB is in a similar position...)
ECB balance sheet drops by another €8.6bn to €7,830.8bn in the past week, the lowest level since Jun2021 as QT continues. Total assets now equal to 59% of Eurozone's GDP vs Fed's 32%, SNB's 113% and BoJ's 132%.
Turkey's six-party opposition coalition, Nation Alliance, has chosen Kemal Kilicdaroglu as its joint presidential candidate. He will seek to unseat President Recep Tayyip Erdogan in the upcoming presidential and parliamentary election
Taiwan suspects Chinese ships cut islands’ internet cables. Residents of Taiwan's outlying islands near the Chinese coast have been without the internet for the past month
ECB officials have rightly pointed to the role that fiscal policy plays in inflation, and encouraged governments to exercise restraint. The Fed should at least acknowledge this reality. It plays an essential role to achieving their mandate
European Central Bank president Christine Lagarde said Wednesday she would do whatever it takes to restore price stability in the face of high inflation
Credit Suisse Group AG delayed the publication of its annual report and compensation details for 2022 after US regulators raised last-minute technical queries on previous statements
Georgia : For days, thousands of protesters have taken to the streets in Tbilisi in anger as a Russian-style law began its passage through parliament
Markets :
NFP tomorrow, U.S CPI next week, bottom line the data is and will remain volatile, markets will continue to gyrate, this week the 50bps in March probability moved/got priced to 80%, was about 30pct probability on Monday..
SPX is trading at the same levels we traded at in May last year. Some bigger ups and downs, but we are still lacking the new bigger trend. During this period the index has moved closer and closer towards a big dynamic like formation. We are right at the 200 day and the 100 day is coming in slightly lower. We are getting closer to a break out move...MS found that “the gap between reported earnings and cash flow for the S&P 1500 is at its widest in 25 years”, mainly due to high working capital spend (Thread)
USDollar firmed up this week on Powell, next short-term direction will come from BoJ and NFP tomorrow, last NFP was a huge surprise (ADP was much lower vs actual NFP, will we reverse some now ?)
Crude stable to lower, Copper similar
Not a record to be proud of ! strewth ! At the beginning of 2022, SNB had CHF204.2 billion in equity. By the end of the year, the bank’s equity had shrunk to CHF65.8 billion. For reference, SNB posted a profit of CHF26 billion in 2021
Long been over, it is now
Signs that monetary tightening working..
BTP's 10year - yields have gone form 93bp in early 2022 to 4.50% now
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