Inflation from the US and UK take center stage. May back in play for both?
US tech has been our saving grace, and we’re reaching a point where it’s legitimate to ask if there’s any point in doing anything other than buying NVDA?
With revisions out of the way, we can look forward to the US CPI report on Tuesday. Everything points towards a softening and a May cut should be back in focus!
We are approaching make or break territory for early spring cuts from the ECB and the Fed. Revisions to CPI numbers will play a crucial role in the coming days.
Option premiums allow one to derive risk-neutral probabilities for the underlying security at expiry. How are these probabilities looking for USD, EUR- and GBP inflation?
CPI, PPI, HICP, or PCE? The inflation measures are plenty and each best serves different purposes. However, the varying methodologies and emphases on components prompt clearly deviating prints – AND allow for logical predictions.
This week’s 5 things we watch with hot topics. This week we’ll cover US recession talks and financial conditions. We’ll also hone in on both US and European inflation and finally talk rates expectations.
We are growing increasingly convinced that we will not see a single print of 2% or lower in the US CPI in this cycle. Despite a cyclical de-acceleration, the sticky components keep the CPI too high and beneath the hood cyclicality is returning.
Markets are expecting a re-acceleration in November’s inflation number tomorrow with expectations at 0.1% vs 0.0% in October. What do our models tell us, and what should we expect? Our thoughts and findings here.
Another set of soft inflation numbers is set to be released from Europe in the coming weeks. We see both GBP and NOK inflation surprisingly low for November, while Swedish evidence is a tad more mixed.
It’s Wednesday and that means time for another 5 things we watch where we hone in on the things that we have been most interested in over the last week.
The UK CPI report will be put under scrutiny tomorrow morning after “hot” wage numbers released earlier today. The report is likely going to look very soft, but there is still a long way to go until 2% is reached.
We see between 0.20-0.25%-points lower inflation in the Euro area than the consensus and the first evidence is already gathering in Germany. Expect EUR inflation to be below target by March-2024 at the very latest.
The BoJ will have to revise the inflation forecasts UP again later this month ultimately signaling that inflation will be above 2% for the next two years. Global bond markets should start to care about the BoJ again!
There is no shortage of depressing data coming out of the UK in recent quarters. The question is whether we’ve seen the worst of stagflation. Maybe, but be careful what you wish for
Rising manufacturing PMIs, sticky labour markets and re-accelerating services inflation in some categories. Have we all underestimated the risk of the Fed continuing on a path of higher(er) for longer again?
A small upside surprise in today’s CPI report led by energy and shelter, while broad commodities, transportation and food prices continue to disinflate. A nothing burger or something to worry about? Read our take here.
The US inflation report is likely to look soft and risks are on the low side of consensus estimates, especially for core inflation. The medium-term issue is that our indicators hint of a bottom above 2%.
With Central Bank rate decisions taking headlines this week, we have a look at the 5 things we watch in global macro, and give you our take on FOMC, BoE and more.
Energy keeps performing against all peers and it seems like positioning is still underweight despite the recent bullishness. European positioning is getting short, but data keeps backing up that view.
The Fed is likely to conclude that the cocktail of rising headline inflation and dropping core inflation is enough for a skip, but by refusing to act on emerging renewed price pressures, they will likely let the market do the dirty work!
The panic will subside if the PBoC manages to defend the 7.30 handle in USDCNY. Could we reach “peak China panic” during today’s trading? We look forward to it alongside the FOMC meeting minutes in our morning report.
In this short note we go through why EU inflation is likely to get back to target faster than US inflation due to technical differences in the way of measuring inflation.
Here is our chart-deck on the US CPI report on Thursday. A soft core paired with a hotter headline? It looks like an odd- and rare steepener cocktail to us.
A weaker JPY paired with higher JGB yields and a steeper curve. The JPY markets are sending mixed signals but maybe the whole purpose of the BoJ policy was to leave markets uncertain on the direction of travel.
Most recent trends point to a combo of outright deflation in the producer leg paired with short-term cyclical optimism. It almost sounds too good to be true given what we have been through. Hello, Goldilocks (for the time being).
This week our primary focus is the current business cycle, where we try to figure out which stage we are in, and what outlook different asset classes are pricing in. Today’s edition of ‘5 Things We Watch’ is no exception.
With the recent move in swap rates and the JPY, we have once again looked into Japan to find out when BoJ will do something about their policy and if the Yen is a viable option for your portfolio. JPY looks more like a sell than like a buy here.
Just in: A brief account of today’s US CPI report.
The Philly Fed NBOS survey revealed a weakening service sector for the first time in this cycle. Is this the final shoe to drop? The UK meanwhile remains the laggard on inflation.