KBC Sunset Market Commentary 05/08/2022 via Trader Talent

Sunset Friday, August 5, 2022 Daily Market Overview Dear reader, There will be no KBC Economics-Markets reports from Monday, August 8 to Friday, August 12. We resume our publications on Tuesday, August 16. *********************************************************************************************************** Click here to read the PDF-version of this report. Markets • Crushed it! The July US jobs report obliterated even the most optimistic expectations. Employment grew by 528k, accelerating from an upwardly revised 398k in June and more than double the 250k consensus. Sectors producing the biggest increases were education & health (+122k), professional business services (+89k) and leisure & hospitality (+96k). After shedding 6k in June, the …

KBC Sunrise Market Commentary 05/08/2022 via Trader Talent

Friday, 5 August 2022 Dear reader, There will be no KBC Economics-Markets reports from Monday, August 8 to Friday, August 12. We resume our publications on Tuesday, August 16. *********************************************************************************************************** Please click here to read the PDF version Markets •          The Bank of England policy meeting was widely watched yesterday, not only by UK but also by European and US markets. Governor Bailey’s MPC raised rates by 50 bps to 1.75%, following global peers in larger-sized increases. The BoE will start selling UK gilts actively shortly after the September meeting, tightening policy on another front. Inflationary pressure have intensified markedly. …

KBC Sunset Market Commentary 04/08/2022 via Trader Talent

Sunset Thursday, August 4, 2022 Daily Market Overview Click here to read the PDF-version of this report. Markets • The Bank of England did what it was expected to do. After delivering a 50 bps rate hike in a 8-1 vote, the biggest in 27 years, the policy rate now stands at 1.75%. Inflation intensified, amongst others due to near doubling in gas prices. But domestic price pressures remain strong too owing to a tight labour market and low unemployment. Wage growth is expected higher than was forecasts in the May report, adding to the risks of a price-wage spiral. Inflation should …

KBC Sunrise Market Commentary 04/08/2022 via Trader Talent

Thursday, 4 August 2022 Please click here to read the PDF version Markets •          Minneapolis Fed and SF president Kashkari and Daly yesterday put it very clearly: rate cuts in 2023 are very unlikely and markets are ahead of themselves pricing them in. These are just two more quotes from a concerted hawkish intervention by the Fed. Fed’s Barkin sought to ease concerns for a recession, citing the strong labour market. His words were also backed by the strong US services ISM, which increased from 55.3 to 56.7, defying expectations for a drop to 53.5. Business activity and new orders …

KBC Sunset Market Commentary 03/08/2022 via Trader Talent

Sunset Wednesday, August 3, 2022 Daily Market Overview Click here to read the PDF-version of this report. Markets • FOMC member Bullard join the hawkish parade kickstarted by Daly, Mester and Evans yesterday. This morning he reiterated his views of a policy rate at 3.75-4% by the end of the year and said there’s a need to get into more restrictive territory. During early US dealings he doubled down in another speech, saying rates may need to be higher for longer to ease inflation. It’s a sneer towards money markets pricing in rate cuts as soon as the first quarter of next year. …

KBC Sunrise Market Commentary 03/08/2022 via Trader Talent

Wednesday, 3 August 2022 Please click here to read the PDF version Markets •          Pelosi’s visit to Taiwan provoking the ire of China dominated most of the European trading session. Risky assets including equities were sold while safe havens enjoyed a good bid in your typical risk-off market reaction. However, even before Pelosi’s plane had yet to land on the self-governing island, planned in early US dealings, the market was already going in reverse again. We know (geo)politics have a short shelf-life as market themes, but this is really something else. Anyway, both European and US yields started bottoming out, …

KBC Sunset Market Commentary 02/08/2022 via Trader Talent

Sunset Tuesday, August 2, 2022 Daily Market Overview Click here to read the PDF-version of this report. Markets • Pelosi rocks the boat. The Speaker of the House is about to set foot on Taiwanese soil to meet the president (tomorrow) and it’s very much against the will of China. Taiwan is a self-governing island but China considers it part of its territory. High-level meetings like these are viewed as supportive of Taiwan’s independence and meddling with internal matters. China repeatedly warned the US not to make the same mistake it did 25 years ago by sending then-Speaker Newt Gingrich on a similar …

KBC Sunrise Market Commentary 02/08/2022 via Trader Talent

Tuesday, 02 August 2022 Please click here to read the PDF version. Markets •          The initial core bond yield jump quickly faded once again. Intraday advances of as much as 7 bps (in Germany) evaporated as the day evolved on a combination of factors. News of the first overseas grain shipment from a Ukraine port since the Russian invasion weighed on price of a range of (soft) commodities. Second, the Liberty Times reported that House Speaker Pelosi is to visit Taiwan during her Asian visit after all. China repeatedly warned not to. Geopolitical tensions flared, supporting the safe haven bid …

KBC Sunset Market Commentary 01/08/2022 via Trader Talent

Sunset Monday, August 1, 2022 Daily Market Overview Click here to read the PDF-version of this report. Markets • Core bond yields on Monday kicked off the new month in good spirits. German yields rose as much as 7 bps and a little less in the US. That happened even against the backdrop of disappointing retail sales in Germany which declined unexpectedly by 1.6% m/m in June on cuts in non-essentials as inflation bites. In absence of a fundamental driver, we’d label the move an attempt to bottom out after sliding in a dramatic fashion over the course of July. An ”attempt”, …

KBC Sunrise Market Commentary 01/08/2022 via Trader Talent

Monday, 01 August 2022 Please click here to read the PDF version. Markets •          Europe took center stage on Friday. July inflation jumped to 8.9% y/y (8.7% expected) and core inflation hit the 4% mark. Growth in the second quarter also surprised to the upside, expanding 0.7% q/q to be up 4% y/y. That provided merely some temporary comfort to (European) investors. German yields were looking for a countermove after a month full of losses. Advances went as high as 9 bps across the curve but the focus gradually turned back to the bloc’s imminent future, which is not looking …