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US economic data remains weak, Powell may take aggressive measures again👆
US data was much less friendly to the goldilocks narrative today, as a sharp -5.2% drop in durable goods orders was offset against stronger than expected initial claims (230k vs 240k last week), with bond yields rising around 3bp on the day despite the rough showing in equities today. Furthermore, Atlanta Fed's GDPNow was revised up even further to 5.9% for Q3, adding further hawkish pressures to Powell's Jackson Hole speech today, where he will be delivering a keynote on the topic of "Structural Shifts in the Global Economy". Both nominal and real (inflation adjusted) yields are going into the symposium at 90%-percentile highs going back to 2004. Last year's keynote was surprisingly brief, with Powell brutally explicit in trying to usher rates higher, leading to the infamous Q4 risk sell-off. Will the US economy still in decent shape, and inflation and labour markets only showing limited signs of softening despite rates at >5%, will the Chairman be looking for another Round 2 knock-out? Stay tuned!
#US #Powell #GDPNow #JacksonHole #rate
US data was much less friendly to the goldilocks narrative today, as a sharp -5.2% drop in durable goods orders was offset against stronger than expected initial claims (230k vs 240k last week), with bond yields rising around 3bp on the day despite the rough showing in equities today. Furthermore, Atlanta Fed's GDPNow was revised up even further to 5.9% for Q3, adding further hawkish pressures to Powell's Jackson Hole speech today, where he will be delivering a keynote on the topic of "Structural Shifts in the Global Economy". Both nominal and real (inflation adjusted) yields are going into the symposium at 90%-percentile highs going back to 2004. Last year's keynote was surprisingly brief, with Powell brutally explicit in trying to usher rates higher, leading to the infamous Q4 risk sell-off. Will the US economy still in decent shape, and inflation and labour markets only showing limited signs of softening despite rates at >5%, will the Chairman be looking for another Round 2 knock-out? Stay tuned!
#US #Powell #GDPNow #JacksonHole #rate
Japan's GDP has experienced a significant surge, leading to expectations of increased interest rates in the UK due to rising wages😳
Developed markets gave a totally different story where Japan printed a 6%(!!) annualized GDP (vs 2.9% expected), causing the USDJPY to break 145 and keeping the CNYJPY pair towards its YTD highs at ~20 as the 'beggar-thy-neighbour' depreciation game continues. Across the pond, UK wage growth also came in at 8.2% on a 3m annualized basis, leading to a sharp 10bp jump in September BoE pricing, and 10yr Gilts back to flirting around last October's 'mini-budget' yield highs just ahead of UK CPI.
#rate #USDJPY #CNYJRY #YTD #CPI
Developed markets gave a totally different story where Japan printed a 6%(!!) annualized GDP (vs 2.9% expected), causing the USDJPY to break 145 and keeping the CNYJPY pair towards its YTD highs at ~20 as the 'beggar-thy-neighbour' depreciation game continues. Across the pond, UK wage growth also came in at 8.2% on a 3m annualized basis, leading to a sharp 10bp jump in September BoE pricing, and 10yr Gilts back to flirting around last October's 'mini-budget' yield highs just ahead of UK CPI.
#rate #USDJPY #CNYJRY #YTD #CPI
