What a couple weeks! Confidence in the US banking system has been under immense stress, and some contagion crossed the Atlantic and struck Europe as well. Triggered by a casino in disguise, the troubles have for now been backstopped, but is further distress lurking beneath the surface?
Something for your Espresso: While we are waiting for the next shoe to drop
Calm is temporarily restored while First Republic Bank continues to suffer. Tech and Consumer Discretionary are underperformers when the calm is restored. The world is truly upside down right now.
Something for your Espresso: Is the ECB even aware of the banking crisis in the US?
The US inflation print yesterday would have been a CLEAR 50bp data print, but markets and we remain convinced that the credit event will force the Fed to rethink. The ECB is, on ther other hand, not awake yet.