Blogs

<p>One interpretation of the dovish market reaction to CPI in the rates market today is that Fed speakers weren't as hawkish as you would expect after a hot CPI reading. I continue to believe that the reaction function has changed and the Fed and markets do a delicate dance. As I've written before:</p><p>Markets expect F

<ul><li>2023 was a 'hall of fame' year on inflation reduction</li><li>Overall CPI inflation in Dec was pretty close to what was expected</li><li>Housing inflation was a little less favorable than expected</li><li>Persistently high shelter inflation CPI may have less implication for Fed'

<p>It's been a long, slow recovery but the S&amp;P 500 is now flat on the day.</p><p>The recovery comes as the bond market shrugs laughs off the CPI report. US 2 year yields are now down 11 bps on the day and the Fed funds curve is pricing in more cuts than before CPI.</p><p>Maybe that was […]

<ul><li>I think we have passed the hardest and worst bit of inflation</li><li>That doesn't mean we will have a smooth inflation decline</li><li>I see eurozone inflation at 1.9% in 2025</li><li>I cannot give a date when interest rates may go down</li><li>I think rates have reached thei

<p>The sawtooth up-and-down price action in crude oil continued today with a gain of $0.65 or 0.91%. The price settled at $72.02.</p><p>The high-priced today reached $73.81. The low price was at $71.17.</p><p>The earlier rise came as geopolitical worries escalated after Iran seized an oil tanker in the Red Sea. Anxiety

<p>The bid in the front end is incredible today.</p><p>Perhaps that's a rejection of worries about high inflation and further bets on aggressive Fed rate cuts (Dec 2024 pricing up to 151 bps).</p><p>Another theory is that bombs are about to start falling in the Middle East. There is a report in the UK that Sunak i

<p>The AUDUSD moved lower with the dollar buying today and in the process, fell below a floor at 0.66767 that defined the low of what has been a narrow trading week (from low to high only about 60 pips). The extension lower saw the price extend to a new low for the week to 0.6646 […]

<p>The data today was straightforward and hawkish for the US dollar today but the market reaction hasn't played out that way. The initial pop higher in the dollar and slump in equities has faded.</p><p>In particular, the fixed income market appears to be brushing aside worries. US 2-year yields are now below where they were b

<ul><li>Still seeing moderation in overall level of inflation but still a 'disconnect' with services and shelter</li><li>Would have more confidence if improvement in inflation was broader</li><li>Progress on goods has been encouraging and could make the case that it could continue</li><li>So

<p>A <a href="https://x.com/Steven_Swinford/status/1745508912034451737?s=20" target="_blank" rel="nofollow">report </a>says that Rishi Sunak is holding a full cabinet meeting at 7:45 pm this evening, which is just over an hour away.</p><p>There is speculation that it's about UK and US