Global Markets

High US Inflation and the relevant rise in US Yields and Fed rate hike bets, were the main themes during this week and the key drivers of market movement, while we also had some high profile companies reporting

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…

Throughout the U.K.'s history and its interaction within global events, the British pound has served as a conduit for international trade and as a safe haven for investors.

The Canadian dollar (CAD) has a storied history throughout the development of North America, world wars and international financial challenges. Existing as a pegged or floating currency, the CAD has shown resilience in the face of global economic chaos.

Recession and recovery - What is a recession? And how do we know when a country is in recession?

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…