Global Markets

Yesterday, the US headline CPI beat the forecast of 5.8% y/y, coming in at 6.2%. The core CPI, which strips out volatile items such as energy and food also beat at 4.6% (4.3% forecast). As such, nominal yields are adjusting. Past performance is not an indicator of future results Source: www.tradingview.com The chart above shows the Heiken Ashi US10Y. Its yield is a nominal yield i.e. it has an inflation…

Past performance is not an indicator of future results. Source: www.tradingview.com Prior to the Covid-19 pandemic, the US10Y yield (blue line chart) was in decline. At the same time, the 10Y breakeven inflation rate was coming down. This period is denoted by the red down trendlines. The orange box represents most of the 2020 year, as authorities implemented unprecedented monetary stimulus to deal with the fallout of the pandemic. To…

The week was packed with important events and central banks were front and center, delivering consequential and market-moving decisions. We also had some key economic release and quarterly financial results from high profile firms

The NFP print beat forecast coming in at 531k. The Dow Jones estimate was for 450k. This is a vast improvement over the last two months which missed expectations. Importantly, September's print was revised to the upside, increasing by 312k. Wage inflation came in at the forecast of 0.4% for the month, but was up 4.9% y-o-y. Of note. the participation rate held at the 61.6% level, which would be…

The Fed has a dual mandate to achieve price stability and maximum employment. In this regard, we have seen progress on both fronts. However, the employment market still has room to move before the Fed will be comfortable in terms of its mandate. A broad measure of unemployment in the US is the U6 unemployment rate (as opposed to the often quoted U3 measure). U6 includes discouraged, underemployed, and unemployed…

The US Federal Reserve maintained rates at 0-0.25% on Wednesday and announced a $15 billion/month reduction in asset purchases, to begin within this month - $10 billion will be Treasury securities and $5 billion will be mortgage backed securities

Earlier, Premier Li Keqiang commented that China faces downward pressure. He then suggested tax cuts and a reduction in bank fees to stimulate small and medium-sized businesses. These come after some worrying metrics out of China. Manufacturing has slumped in 2021 and the NBS Manufacturing PMI has recorded two months in a row under 50, which implies contraction: China NBS Manufacturing PMI Past performance is not an indicator of future…

Investors keenly await today’s monetary policy decision from the US Federal Reserve, but on Thursday, focus will shift to its UK peer, the Bank of England (BoE), for a potentially consequential meeting

Past Performance: Past Performance is not an indicator of future results. After a 2020 which saw the greenback's value decline significantly (off the back of the Federal Reserve's unlimited quantitative easing), 2021 has seen the currency stabilise and begin to appreciate. The USDOLLAR has now shifted up a gear. Technically speaking there are a number of positives to the weekly chart above. The USDOLLAR has moved above its black 30-week…

Investors turn to the Federal Reserve’s policy meeting of September 21-22, to see if it will provide more clues around its tapering intentions.

The Reserve Bank of Australia decided to move forward with its plans to taper the pace of its Quantitative Easing program, but to also extend its duration.