![]() ![]() "Policymakers are about to face some unenviable choices as they grapple with the worst stagflation we’ve seen in decades.A year ago, Volkswagen in China launched a marketing campaign called The People's Car Project (PCP), which invited Chinese customers to submit ideas for cars of the future. "That’s adding to fears that “peak inflation” might not actually have arrived yet for some countries," he said. crude recently fell 0.03% to $94.86 per barrel and Brent was at $101.83, up 0.6% on the day.ĭeutsche Bank strategist Jim Reid said the worry was that the energy situation in Europe keeps getting worse. China's yuan also nudged away from a two-year low. In the currency markets, the dollar was down 0.25% having been down as much as 0.5% earlier, including 0.4% against the euro and to 136.62 yen. "But equities markets could have to reassess that after Jackson Hole." "Equities markets at the moment see bad news about the economy as being essentially good news because to them it means that the Fed might not tighten as much as thought," said Rob Subbaraman, Nomura's head of global macro research. Euro zone money markets are now pricing in around 100 bps of ECB rate hikes by October, including a slight chance of 75 bps move next month. Interest rate futures imply a 60% chance of a 75 bp Fed hike in September, up from 50% earlier this week. "Given the extent of this week’s sell-off thus far, a hawkish takeaway from Wyoming appears to be the consensus and, arguably, priced in with some degree of confidence," said Ian Lyngen, head of U.S. Investors now expect the Fed Funds rate to peak at 3.80% in March 2023, up from 3.62% a fortnight ago, said Tapas Strickland, NAB's economics director. But Powell's speech due on Friday will be scrutinized for any indication that an economic slowdown might alter the Fed’s strategy. inflation remains at 8.5% on an annual basis, well above the Fed's 2% target. Investors have pared back expectations the Fed could tilt to a slower pace of rate hikes as U.S. yields, which are the key driver of global borrowing costs, hovered near its eight-week high of 3.10%, compared with 2.51% at the start of the month. Italy's 10-year yield nudged down to 3.58% and U.S. ![]() Germany's 10-year yield dipped around 3 basis points (bps) to 1.33% after touching 1.39%. On Wall Street, the Dow Jones Industrial Average rose 31.01 points, or 0.09%, to 33,000.24, the S&P 500 gained 21.5 points, or 0.52%, to 4,162.27 and the Nasdaq Composite added 100.25 points, or 0.81%, to 12,531.78.īorrowing costs in bond markets eased slightly, too, following a hectic few days that have seen another sharp surge, especially in Europe where gas prices have now more than tripled since June as Russia has reduced its supply. MSCI's gauge of stocks across the globe rose 0.68% following gains in Europe and Japan. The euro fell back under $1 by the time details from last month's European Central Bank meeting - where it hiked its rates by a bumper 50 basis points (bps) - showed concerns among policymakers that inflation is becoming entrenched. News that the country narrowly avoided a contraction in the second quarter and better-than-feared confidence data briefly lifted the battered euro back above dollar parity. GDP data from Europe's largest economy, Germany, brought relief too. "It's all treading water until we get a hold on what Fed chief (Jerome) Powell has to say at Jackson Hole," said Saxo Bank's head of FX strategy, John Hardy. ![]()
0 Comments
Leave a Reply. |