TwTwo-Speed World Weighs on G-7 With Inflation Fading Unevenly

24. 5. 2024 - Josef Brynda

A two-speed global economy skewed by US strength is overshadowing this week’s Group of Seven meeting as officials confront the prospect of less synchronized monetary policies.

Finance ministers in the lakeside resort of Stresa on Friday are weighing the durability of America’s growth momentum against the perennial sickliness of Europe’s expansion — colored by nearby geopolitical tensions — and pondering the implications for financial

05/20/24 Daily analysis

20. 5. 2024 - Josef Brynda

Latest news

• European stocks edge higher; Ryanair reports rise in profits
• Oil Extends Gains as Traders Monitor Iran, Saudi Developments
• Metals, stocks surge as rate cut expectations firm
• ECB’s Kazaks Warns Against Hasty Interest-Rate Cuts After June
• Gold Hits Record High on Fed Rate-Cut Hopes, Rising Haven Demand
• Top Japan companies agree to 5.58% average pay hike, business lobby says
• Slowing Inflation Primes G-7 Central Banks for June
• Bitcoin price today: flat at $67k, more Fed cues in focus
• Most Asian currencies weakened slightly on Monday, while the dollar steadied as traders awaited more cues on interest rates from the Federal Reserve this week.
• Broader currencies weakened slightly as traders remained on edge over the path of U.S. interest rates.

News summary

• Expectations of interest rate cuts in the United States: Reports of hopes for interest rate cuts by the Fed could weaken the dollar. If these expectations were confirmed, the dollar could lose value due to lower yields it could provide.
• Stabilization of the dollar in anticipation of further signals from the Fed: News of stable Bitcoin prices and traders' wait for additional signals from the Federal Reserve could lead to stabilization of the dollar. Traders may be cautious and await further information before deciding on further trading steps.
• The stable bitcoin price and the expectation of further decisions by the Federal Reserve may lead to a stabilization of the dollar. Investors may be cautious and wait for further information before making further trading moves.
• Overall, the dollar could remain stable or weaken due to expected interest rate cuts, but market reactions may be sensitive to new information and events.

New inflation reading offers hope for Fed rate cuts

16. 5. 2024 - Josef Brynda

Daily analysis

16. 5. 2024 - Josef Brynda

Latest news

• Stock Gains Set to Continue in Europe After US CPI: Markets Wrap
• China Property Stocks, Bonds Jump on Proposal for Home Purchases
• Bond Yield Volatility Presents New Risks and Opportunities for Investors
• Oil Advances on US Stockpile Decline and Broader Risk-On Mood
• Bitcoin price today: rebounds to $65k after CPI data, but still rangebound
• Pro Research: Wall Street sees bright future for First Solar
• China Sells Record Sum of US Debt Amid Signs of Diversification
• More Companies Are Selling Shares to Help Cut Debt

News summary

• If European stock markets continue to rise, it may indicate a positive sentiment towards European assets, which could support the euro
• The increase in Chinese stocks and bonds in response to the proposal for home purchases may indicate a growth sentiment towards risky assets, potentially leading to a weaker dollar and strengthening of the euro.
• Bond yield volatility may increase market uncertainty and lead to a search for safer assets, which could affect the dollar, with the euro being the preferred alternative.
• Rising oil prices and overall positive sentiment in the markets may lead to a weaker dollar and strengthening of the euro.
• The expected increase in bitcoin prices and generally positive sentiment in the cryptocurrency markets may indicate less interest in dollars and a preference for other assets, including the euro.
• Positive evaluation of First Solar's future by Wall Street may reflect an optimistic sentiment in the stock markets, which could support the euro.
• China's sale of a record sum of US debt amid signs of diversification may indicate weaker interest in dollars and a search for other investment opportunities, which could support the euro.
• If companies are selling shares to reduce debt, it may signal a growth sentiment in the market, which could support the euro.
• Positive data on employment changes in Australia may indicate stronger economic growth, which could support commodity currencies and overall weaken the dollar.
• Higher-than-expected initial jobless claims in the US may indicate a weaker job market, which could have a negative impact on the dollar.
• The expected deterioration in the Philadelphia Fed Manufacturing Index may signal weaker economic performance in the region, which could have a negative impact on the dollar."
   

   
   

   

Daily analysis

14. 5. 2024 - Josef Brynda

Latest news

• UK Unemployment Rate Rises to Highest Since Last Summer
• U.K. Average Earnings Index +Bonus
• Stock Futures Muted Before Price Data, Yen Drops: Markets Wrap
• Asian stocks rangebound before U.S. inflation, China hit by property woes
• Gold prices edge higher with US inflation data on tap
• Rate cut bets make investors 'most bullish' since Nov 2021
• Japan stocks higher at close of trade; Nikkei 225 up 0.39%
• Australia stocks lower at close of trade; S&P/ASX 200 down 0.30%

News summary

• Rising unemployment rate in the UK: This factor may cause some uncertainty in the markets as higher unemployment may indicate economic difficulties. This may lead to investor caution and may have a negative impact on the UK equity market.
• Range trading in Asian equities ahead of the release of US inflation and problems with the Chinese property market: this situation may cause caution among investors, which could lead to limited trading in Asian markets.
• Increased gold prices ahead of the release of US inflation: this may signal that investors are seeking a safe haven for their investments given the expected volatility in the markets.
• Anticipation of interest rate cuts making investors 'most optimistic' since November 2021: This could encourage growth in markets as lower interest rates may boost investment activity.
• Overall, markets can be expected to be sensitive to published data and events. Uncertainty over the UK unemployment rate and issues with the Chinese property market may lead to investor caution, while expectations of falling interest rates and the results of inflation data may support growth in markets.
• EUR/USD Forecast: With the UK's higher unemployment rate, investor confidence in the British economy may decrease, impacting the British currency. Global economic concerns stemming from issues in the Chinese market could drive investors towards the safety of the dollar. Additionally, if US PPI surpasses expectations, it may deter the Fed from interest rate cuts, potentially strengthening the dollar.

Viktor Shvets on How the Fed Has Become a Prisoner of Its Own Making

14. 5. 2024 - Josef Brynda

This week, we'll get fresh inflation data in the US, which will inevitably feed into the Federal Reserve's future decisions to raise, hold or lower benchmark interest rates. Meanwhile, the Biden administration is preparing to announce new tariffs aimed at curbing Chinese imports in key industries, including electric vehicles, batteries and solar cells. On this episode, we speak to Odd Lots favorite Viktor Shvets. The Macquarie strategist has a way of threading the needle between major global events and reaching back into history to provide context for our current macroeconomic moment. He describes the US central bank as a prisoner of its own policies, namely data dependency and the "dot plot." Meanwhile, China faces "massive" overcapacity problems as more and more countries put up barriers to its exports. We also talk about generational shifts and what they mean for investment.

Bank of England keeps interest rates at 16-year high

9. 5. 2024 - Josef Brynda

Bank of England policymakers have kept interest rates on hold at 5.25% for a sixth consecutive time, which comes as no surprise as markets expect rates to come down only in the summer

However, the decision was not unanimous. The nine members of the Monetary Policy Committee were split, with seven voting to hold rates and two voting to cut to 5%

Companies are having their best earnings season in nearly 2 years

7. 5. 2024 - Josef Brynda

Stocks have remained largely resilient in recent weeks despite reports of sticky inflation and risk that the Federal Reserve holds interest rates higher for longer than investors expect. Wall Street strategists believe that's likely due to a better-than-expected set of first quarter earnings.