Fed Terminal Rate has climbed 50bps year-to-date and keeps rising
This is the chart that is rattling the markets: Fed Terminal Rate has climbed 50bps year-to-date and keeps rising!
German Food CPI jumped 20.2% YoY in January
Supermarket inflation remains elevated in Gernmany. Food CPI jumped 20.2% YoY in January. Following the rebalancing of the basket of goods by German Statistics Office, food now has a higher weight in inflation rate. Share rose by 2ppts from 8.5% to 10.5%. Source: HolgerZ, Bloomberg
Second largest daily outflow for a US high yield bond ETF!
One of the largest U.S. high-yield bond ETFs had a daily outflow of $1 billion (over 10% of assets under management) yesterday. The only time we've seen it was in June 2020. Capitulation? Source: Bloomberg
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Global Bonds Are Set to Erase 2023 Gains as Pivot Hopes Wither
Source: Bloomberg
Japan’s Key Yield Rises Above 0.5% BOJ Ceiling for Second Day
Source: Bloomberg
Hedge funds net exposure is moving from Value to Growth sectors
(note that it is as of December 31st, 2022 so it is lagging the actual net exposure) Source: Goldman Sachs
U.S. Treasury bond performance in 2023 turns negative!
For the first time in 2023, the year-to-date performance of U.S. Treasuries has turned negative (-0.14%). Yesterday, the U.S. Treasury yield curve shifted upward by about 15 basis points as the index has lost 2.6% in February so far. This sharp reversal is due to a stronger than expected resilience in the U.S. economy, which could trigger further tightening of U.S. monetary policy. Source: Bloomberg
Chinese bond outflows are back!
While sentiment is positive on Chinese assets due to hopes of the economic impact of the reopening, the inflows of CNY bonds lasted only one month. In January, capital outflows resumed due to fears of accelerating inflation in Asia and particularly in China as its economy reopens. It should be noted that the PBOC (People Bank of China) is one of the few central banks to maintain an accommodating monetary policy since the beginning of the COVID. Source: Bloomberg.
