Sri Lanka hikes power prices by 66%, hoping for IMF bailout. Fund's backing depends on government commitment to raising taxes, cutting debt
Credit Suisse says it has paid $210 million to date to billionaire Bidzina Ivanishvili in a long-running legal saga
UK PM Rishi Sunak and EU's Von Der Leyen to speak before the end of the week, text of Northern Ireland protocol deal to go before the DUP on Monday - The Times >> could we finally get some positive news there?..
Fed's Mester (non voter) : More Rate Hikes Needed To Combat Inflation - higher for longer etc. At the last FOMC meeting, “I saw a compelling economic case for a 50-basis-point increase, which would have brought the top of the target range to 5%”
Scenarios where the Fed leaves rates higher for longer or raises policy rates above our base case terminal rate of 5.25-5.5% are becoming more likely:" Citi, they all slowly coming to the conclusion..Fed’s Bullard says he joined Mester in pushing for a 50 basis-point rate hike at last policy meeting >>> IMHO, 50bps were not priced in at all of late, now Fed officials forcing markets to price some risk of 50bps, unlikely though
BoC : similar message. While Canada may have turned the corner on inflation, we know that it will take time to get back to the Bank’s inflation target. So, I’d like to take this opportunity to talk about the importance of staying the course in the fight against inflation, despite the short-term pain that high interest rates can cause
RBA boss Philip Lowe says rate rises hurting households, indications are they will go higher
Philly Fed was not pretty to say the least, coming in at -24.3 vs -7.6 expectations. Last reading was -8.9. - New orders index remained negative (!!!) - Employment index declined, but remained positive - Expectations are tempered for growth over next six month period
The People’s Bank of #China offered 835 billion yuan ($121 billion) of cash via seven-day reverse repurchase contracts on Friday, resulting in an injection of 632 billion yuan on a net basis. That’s the largest one-day addition on record in data going back to 2004
Goldman Sachs Expects Three More 25bps Hikes In March, May, And June, 2023 For A Peak Funds Rate Of 5.25-5.5%
'The explosive rise of short-dated options is creating event risk on the scale of the stock market's early-2018 volatility implosion, according to JPMorgan Chase & Co.'s Marko Kolanovic.'
Uncle Sam is on track to add more than $19 trillion in national debt over the next decade
Markets :
Rates matter as reality catches up to equities. Let's see if things can get even more dynamic should we try the 4% level in the 10 year...
USD stays fir(er), beginning to break some resistance, USDUSD 0.9250+, AUDUSD below 0.6850/75 area, EURUSD below 1.0700/50 area, all levels that held for last 2-3weeks, CABLE below 1.20, USDJPY responding the easiest so long as BoJ quiet on YCC (but risk is hey do eventually..).
Bonds, hikes extending, test of 4% in 10's UST looks on the cards, higher for longer
The slight recovery in Gold, commods and so on last few days, quickly reversed again yesterday
SPX500 4150 resistance now well defines, QQQ caught up a little with rates yesteday, after this massive rally since early Jan, beware. Whole daily sentiment driven by 0DTE option markets, quite ridiculous but it is what it (all it means it can swing either way, very quickly) >>>"the short covering in US Tech stocks from Jan 31st to Feb 15th is the second largest in magnitude over any 12-day period in the past decade and ranks in the 99.5th percentile" GS PB
Worth revisiting recent thoughts :
Higher for longer = it won’t be all pain for all assets. Quite the contrary; it will bring a refreshing return of productive investment and a brighter future for everyone.
The return to more productive deployment of capital will have to mean investing more in the real, physical world to accomplish the new set of supply chain and resource access imperatives, not pouring money into digital platforms that capture excess profits by monopolising markets and user attention. On that note, our equity strategist Peter Garnry looks at whether the multiple decades of underperformance for equities dealing in tangible assets is ending, with intangibles and financials set to underperform after decades of excess financialisation. He also pokes into the geographies that look the most interesting as supply chains diversify
JPMorgan Strategist Kolanovic Warns of ‘Volmageddon 2.0’ Risk in Options Market - Bloomberg daily options, super short-term stuff, JPMorgan’s Kolanovic Warns of ‘Volmageddon 2.0’ Risk in Options
some powerful pictures
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