Russell Shor

Last week, US headline inflation came in under 5% for the first time in two years. Core inflation was 5.5% y/y and is still looking sticky. Chinese CPI was a disappointing 0.1% y/y and Chinese factory-gate inflate declined 3.6% y/y. We also saw the BoE raise rates by 25 bps to 4.50%. This week will see a host of Fed speakers with Fed Chair Powell participating in a panel discussion…

The debt-ceiling impasse in Washington is currently the primary driver of the dollar's performance. Negotiations between President Biden and congressional leaders are set to resume on Tuesday, but without positive news, investor fears may continue to grow. As such, the balance of risks is currently tilted to the upside for the dollar, with safe-haven flows likely to continue as risk sentiment remains subdued.

Bitcoin has declined below $27,000 as investors considered news of reduced crypto-trading businesses from two major institutional liquidity providers in the U.S. Bloomberg recently reported that Jane Street and Jump Crypto, two of the largest crypto market makers, are stepping back from crypto trading in the U.S. due to the country's regulators cracking down on the industry.

The USDZAR has climbed over 5% for the week and is trading near R19.42, down from the its of R19.5152. US ambassador, Reuben Brigety, accused South Africa of providing weapons and ammunition to Russia. These were allegedly loaded onto a Russian ship at the Simon's Town naval base in Cape Town in December 2022. The news caused the rand to fall near its record low from 2020, and it also…

According to the National Bureau of Statistics (NBS), consumer prices in China rose by just 0.1% in April from a year ago, the lowest rate of inflation in two years. This suggests that there is weakness in domestic demand and raises questions about the strength of the economic rebound.

As growth companies are inclined to retain and reinvest their earnings back into the company, their expected dividend stream is pushed back into the future. This means that growth companies are more sensitive to interest rate movement than value companies due to these inherent time value of money characteristics i.e., a dollar today is worth more than a dollar in the future. The opportunity cost increases as interest rates rise…

Headline CPI for April came in a t 4.9% y/y, modestly lower than the 5% y/y expected. Core inflation which strips out volatile items such as food and energy printed at 5.5% y/y which was slightly lower than the previous 5.6% y/y. The month-on-month figures for headline and core were 0.4% respectively, which equates to 4.9% annualised. This is still much higher than the Fed’s target of 2%.

President Joe Biden and congressional leaders failed to reach a deal on raising the debt ceiling during a meeting at the White House on Tuesday. The leaders agreed to meet again at the end of the week to continue negotiations. The Treasury Department and budget experts have warned that a bill must be signed by early June to avoid the U.S. defaulting on its debts, which could have catastrophic economic…

According to a Federal Reserve report released on Monday, mid-sized institutions' turmoil led to banks tightening their lending standards to households and businesses, which could pose a threat to the US economic growth. The report, called the Senior Loan Officer Opinion survey, revealed that banks had made it tougher to get commercial and industrial loans, mortgages, home equity lines of credit, and credit cards. Respondents expect the situation to persist…

The UK’s headline inflation printed at 10.1% on 19 April, which was higher than the 9.8% forecast. Wage inflation, released the day before, was also higher than anticipated at 5.9% (vs 5.1%). This puts the BoE in a difficult position considering that it targets 2% inflation. It is lagging the other major economies in its attempts to control price pressures.

The NFP showed higher average hourly earnings and a lower unemployment rate than expected. The FOMC statement suggests a pause, the RBA delivered a surprise rate hike and the ECB increased rates by a smaller increment. This week we get CPI data on Wednesday and the BoE is expected to increase its official bank rate by 25bps. Disney is set to release results this week and Friday delivers UK GDP…