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Terminal rate repriced ag / Sticky inflation! / BoJ nominees next week / ECB speakers & Powell today



  • "After the shockingly strong NFP report, our economists added a 25bp hike to their expectations and moved the expected terminal rate to 5.0-5.25%" --JPM, same at MS : Friday's jobs report caused Ellen Zentner's team at Morgan Stanley "to change our baseline forecast from a pause to a 25bp hike at the March FOMC." It also boosted the chance of bigger hikes ahead "& the possibility that following a Fed pause the next move will be up, not down"

  • Bostic says strong jobs report may spur Fed to raise interest rates even higher

  • RBA raises interest rates as expected, says more hikes in store, Philippine annual inflation blew past expectations in January to reach a fresh 14-year high on surging food prices, raising the chance of the central bank delivering a larger interest rate hike to tame prices when it meets this month & Japan reports biggest jump in nominal wages in more than a quarter century! will they really keep on with YCC, BoJ ? >> sticky inflation in Asia too >>>Japan's govt to present nominees for next #BOJ governor and two deputy governors to parliament next week

  • Russia sold 3.63 tons of GOLD from wealth fund in January

  • Switzerland hasn't had landfills since 2000 50% of their municipal waste is recycled, and 50% is incinerated to produce electricity

  • The world’s biggest miners spent years calling for consolidation in a fragmented industry. Newmont’s $17 billion Newcrest Mining offer suggests it’s finally starting to happen on a significant scale

  • The Rothschilds look to take their French investment bank private in a $4 billion deal just a few months after a family head died

  • Chinese households' bank deposits surged by ¥18 tln last year, ¥8 tln more than 2021 and about ¥36K per family. Money was saved from less consumption, fewer home purchases, and less financial investments/Thread

 

Markets :
  • Macro Data remains volatile, China fast reopening, U.S recession, no recession, soft, hard, no landing, Russia/UKR impact, inflation remains sticky across world

  • Equity markets have had a massive rally last 4months, further repricing of rates might well tip 'duration' again sooner or later

  • USD mixed after Friday outside day, AUD a little higher on RBA, USDJPY a little softer (all about BoJ nominees next week), GBP remains under pressure

  • UST 2y yields up about 35-40bps in 2 trading days post NFP and ISM - fierce repricing

  • Plenty of ECB speakers today and Powell later on

 

well worth going through it, great insight from Steen at Saxo >> Summary: Models are used everywhere in the financial world. But what do you do when the models you use don't work anymore? That's what this Quarterly Outlook is all about







"Forward EPS growth has just gone negative. This has only previously happened 4 times over the past 23 yrs. In each prior instance (2001, '08, '15, '20), equities have faced significant price downside associated w/the shift from positive to negative earnings growth:" MS's Wilson Cyclicals riskier than growth stocks: Morgan Stanley's Mike Wilson (cnbc.com)









have a great day

TeamPVM









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