Russell Shor

Fed: 25 bps (priced in). Will the Fed send a strong message? Fed funds futures still pricing a pivot.

Core PCE for December has continued to moderate, printing at 4.4% y/y. This is down from 4.7% y/y in November. The series has charted a lower peak (LP) followed by a lower trough (LT). This is a downtrend. Its momentum is defined by the green down-sloping trend line.

Advance GDP for Q4 printed at 2.9% q/q. This is lower than the previous 3.2% for Q3, but higher than the forecast of 2.6% q/q. Durable goods came in at 5.6% m/m - much higher than the expected 2.4% m/m. However, the data is hiding weakness. Consumer spending was lower than expected at 2.1% (2.9% - forecast), and there is a noticeable buildup in inventories. Given the weaker consumption, the…

The BoC raised its overnight rate by 25bps to 4.5%. This was as expected and is regarded as the current cycle’s peak. The statement read that the central bank “expects to hold the policy rate at its current level.”

International stocks are performing better than their US counterparts. This outperformance has been since Q4 last year. In this article, we use GER30 as a proxy for international equities and refer to the US30, the best performing US large-cap index.

GBPUSD daily is trading in its bullish channel between the upper blue and red bands. The hourly chart also shows signs of positivity. Its trend-following EMAs and momentum-based stochastic have crossed up (black ellipses). If the EMAs develop angle and separation and the stochastic makes its way to its upper quintile and holds (blue arrow), an underlying bullish momentum will be present.

Australian inflation for the quarter came in higher than expected at 1.9% (1.6%). On an annualised basis, CPI was 8.4% (7.6%: forecast). The q/q and y/y numbers were also higher than their respective previous prints.

Last week: -Poor retail data and industrial production (PPI) -Fed speakers: Brainard, Harker, Waller: —> rate hikes but Harker, Waller (amongst others) for 25 bps going forward. Blackout period for the Fed. -BoJ: Surprise to markets but not to economists. Kept 50bps defence level on JGBs. Door for normalisation is open. Upgraded CPI forecast for the year. This week: -Chinese markets are closed for the Lunar New Year celebration. -Oil…

A feeling of positivity regarding stocks is present. Here, we consider risk sentiments in Europe. We use FXCM GER30 as a proxy

Oil capitulated in 2022, but recent price action shows accumulation. This, on the back of potential positives, should support energy prices.

The top chart shows bitcoin’s weekly chart, the bottom chart is the US10-year real rate. Bitcoin is showing strength as real rates moderate.