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According to Cornell Law School, an investment is "to put money in a certain manner so that it will generate revenue, such as investing money into a business, property, securities, a house, stocks, etc. with the purpose of generating income and obtaining a profit." Individuals invest for countless reasons, namely capital appreciation and wealth preservation. For investors, one of the most important financial decisions is when to exit an interest…
The US 02-yr Treasury note jumped today, trading at levels last seen in November 2007. It's trading near 3.85%, reflecting market expectations of at least a 75bps hike next week. Some participants have discussed a 100bps increase, reflecting as a 26% probability presently.
Core CPI accelerated in August as yesterday’s report showed, just a week ahead of the Fed’s upcoming policy meeting, which may put pressure for an even larger move on interest rates
The Australian central bank hiked rates by another 0.5% on Tuesday and pointed towards further increases ahead, but maintained optionality as to the future moves
The US economy created 315K jobs in August. This number was better than the forecast of 295K but less than last month's print of 526K. The unemployment rate increased from 3.5% to 3.7%. Moreover, the participation rate increased by 30 bps to 62.4%. Average hourly earnings rose slower: 03% vs last month's 0.5%. Thus there is evidence of some moderation in the labour market. This is ever so slight, but…
Fed chair Powell's speech led to a risk-off environment, as he outlined inflation as the primary policy driver. However, the Fed was not the only hawkish central bank, with tightening comments from the ECB. Moreover, the ECB minutes seemed to downplay a recession. This prompts Russ and Nik to discuss a general and potential contrarian overshoot scenario. NFP on Friday has forecasts between 285-295K, and Euro PMIs print on Thursday.
Fed chair delivers on hawkish expectation at Jackson Hole.
UK inflation prints at levels not seen since the 1980s
The central bank of New Zealand extended its most aggressive tightening cycle with another 50 basis points increase today, expecting more hikes ahead
Whilst headline CPI shows signs of moderating, there may still be sticky elements that need watching.
The U.S. Federal Reserve's balance sheet consists of the Fed's portfolio of U.S. Treasury and government-guaranteed mortgage-backed securities (MBS). Along with controlling short-term interest rates, the balance sheet is one of the Fed's main instruments for conducting monetary policy in order to execute its mandate of maintaining moderate interest rates and full employment. Since the global financial crisis in 2008, and then again during the COVID-19 pandemic-induced economic lockdown in…
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