- The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where is a number, is the consensus median expected.
“Our index of global sell-side recommendations is back to peak bullishness levels reached in 2000 and 2007, after which global equities halved” “Analysts are net buyers of every sector in every region, but then they usually are,”- "During the Great Stagflation, both components of any traditional asset portfolio — long-term bonds and US and global equities — will suffer, potentially incurring massive losses,"Global economies carry larger debt ratios than before, setting up central banks for potential failure, Roubini said. "Central banks are thus locked in a 'debt trap': any attempt to normalize monetary policy will cause debt-servicing burdens to spike, leading to massive insolvencies, cascading financial crises, and fallout in the real economy,"
- We think the market is underestimating the stickiness of US inflation, the Fed's resolve in tackling it, and the necessary tightening required to achieve lower inflation. US CPI on August 10 may be a critical market catalyst for the next leg of the USD rally should it exceed market expectations
The dollar moved higher in the US session (from the NY open). Helping the move was higher yields, and perhaps some anxiety about the CPI data which will be released tomorrow at 8;30 AM. The headline number is expected to rise 0.2% MoM/8.7% YoY. That is lower than the 1.3% and 9.1% last month. However, the core is expected to rise 0.5% MoM and 6.1% YoY for the core. The core is up from 5.9% last month.
- “I would like to see improvements across a range of indicators of inflation, not just one measure ticking down a little bit but clear and convincing evidence.”Bullard on core factors driving inflation higher: “It’s going to be much harder to get that to turnaround.”“We may see some relief in the headline CPI tomorrow but the reason we tend to track core PCE inflation is exactly because we ignore the energy price movement on the way up but also on the way down.”still wants to get rates at 3.75% to 4% range by year end and then see what happens in the first quarter of next year and see if more hikes are needed.Bullard on rates: “I think the destination is a little bit higher than what I would have thought even a couple months ago because inflation has continued to broaden out and doesn't look like it's turning the corner at least based on the evidence we have today.”“I think it’s too early to make the claim” that inflation has peaked.”
The other thing that people are watching are private sector reports. One is the Adobe Digital Price Index, which measures the prices of things online. It fell in July year-over-year data for the first time in two years.
China's headline CPI reading (data for July is published today) is expected to nudge up towards 3%. The wave of inflation that has engulfed everywhere else on the planet has not shown up to anywhere near the same extent in official Chinese data. 3% is the upper edge of the government target for inflation. The Chinese Communist Party pulling the levers on the economy (or, trying to) have had room to move with more fiscal and monetary support given the low reported rates of inflation. At or above 3% would pose a challenge. The tolerance for inflation may have to be raised, or extra stimulus trimmed back with a flow on effect to less propping up of the economy, its being engulfed by an imploding property sector and domestic demand that has been hit by ongoing waves of COVID-related lockdowns and restrictions.
Of direct impact, Communist Party officials through the National Development and Reform Commission of the People's Republic of China (NDRC) - the state...
The USD is seeing a tick to the upside as the NY session moves toward the close.
Tomorrow the traders will be dealing with the CPI data at 8:30 AM where the MoM is expected to rise by 0.2% and the YoY to dip to 8.7% from 9.1%. The Core however, is expected to rise by 0.5% and move up to 6.1% from 5.9% last month. Meanwhile Ford is saying that they will be hiking prices of the F150 Lightening by up to $8500 due to "significant cost increases". HMMM inflation is whipped?
WTI crude oil rose as high as $92.65 on news of curbed Russia pipeline flows but later gave back the gains to settle 26-cents lower to $90.50.
The private oil inventory data from the API is due at 4:30 pm ET and will be the next market mover. The consensus for this week's EIA report due on Wednesday is:
The price of crude oil is settling at $90.50, that is down -$0.26 or -0.29% on the day.
The high price reached $92.62. The low price reached $89.06. The price fell below the 100 hour MA at $89.95 but could not sustain momentum below the level.
Credit Suisse discusses EUR/USD technical outlook and maintains a core bearish bias.
"EURUSD remains below the 38.2% retracement of the May/Jul y fall and recent high at 1.0271 and last Friday has seen another bearish “reversal day” to reinforce the one seen at the be ginning of the week. This should further increase the likelihood that the corrective recovery is coming to an end," CS notes.
- GM says it's open to funding EV battery minerals mining venturesFord raised the price of the electric F-150 Lightning truck by up to $8,500 due to 'significant cost increases'Tesla signed a $5 billion deal for nickel from processing companies in Indonesia
- High yield 3.202%Tail -0.3 BPS vs avg of 0.1 bpBid to cover 2.5x vs six-month average of 2.47XDirects 17.28% vs six-month 18.05%Indirects 63.08% vs six-month average of 60.4% Dealers 19.64% vs. six-month average of 23.47%
It took a while, but the USDCAD is making a break for it to the upside. The pair tested the 100 hour MA in the Asian and London morning session. Then tried to move higher in the NA session. The first few tries saw some up and down apprehension. The last two hourly bars have seen a run to the upside.
The pair is moving toward the broken 38.2% of the move up from the August 1 low. That level comes in at 1.29009 (a nice round number). Getting above that level would increase the bullish bias more for the pair.
A flat start in US stocks has given way to selling, led by the Nasdaq.
Yesterday's high-flying meme stocks have given much back. The resurgence of the likes of GME, AMC and BBBY were a sign that froth had returned to the market.
The EURUSD is back down testing the NY session low at 1.0214. A move below would have traders looking toward the 200 hour moving average 1.0231.
The 100 hour moving average cuts across at 1.01967 and would be another downside target to get to and through if the sellers are to take more control.
The focus on tomorrow's EIA weekly oil inventories will remain on the demand side of the equation as there is concern about signs of unusually low gasoline consumption.
Meanwhile, the monthly report is out and sees:
Tomorrow the treasury will auction off 10 year notes. On Thursday, they will auction off 30 year bonds
Yields in the US today are higher with the biggest gains in the short end:
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