PCE Deflator, the FOMC's favorite inflation number, show a rise as expected with the YoY at 3.3% (from 3%) and the core at 4.2% (from 4.1%)
Jobless claims at 228k (235k expected) showing continued strength ahead of Friday's NFP report Source: Ole S.Hansen
Disinflation pause?
Eurozone inflation remained stuck at 5.3% in Aug, higher than the 5.1% that economists expected. Core inflation, which excl volatile energy, food, alcohol & tobacco prices & closely watched by ECB as measure of underlying inflation, tumbled to 5.3% in Aug from 5.5% in July, matching expectations. Source: HolgerZ, Bloomberg
Pernod Ricard approaching major support level
Pernod Ricard (RI FP) is down 17% since April highs. It's now approaching major support level 174-180. Keep an eye on it. Source : Bloomberg
We are now seeing the widest spread between mortgage rates and 30-year risk-free rates in history
Should we see this as another barometer of credit tightness in the system? Source: Crescat Capital, Bloomberg
Recent Developments in the AT1/CoCo Bond Market: ZKB Unexpectedly Skips an AT1 Call!
After the Credit Suisse turmoil, the AT1/CoCo bond market is witnessing intriguing dynamics as Zürcher Kantonal Bank (ZKB) takes an unexpected turn by choosing to bypass an AT1 call. In a landscape where banks are carefully navigating refinancing challenges, this move adds a new layer of complexity to the market. ZKB's decision to forego the AT1 call comes in the wake of Banco Santander's similar choice, signaling a trend toward cautious financial strategies in the face of fluctuating market conditions. These recent developments are shedding light on the intricate decision-making processes that banks are employing to balance their financial stability and growth prospects.
Is the US stock market severely mispriced?
Typically, the dividend yield on the S&P 500 is well above the US 30y real yield. That has changed. Source: Bloomberg, HolgerZ
French CPI a little hotter than expected, rising 50bp in August
This was all due to energy (including higher regulated prices) and the end of the summer sales, but services inflation is still easing driven by transports and "other services". FRENCH CPI YOY NSA PRELIM ACTUAL 4.8% (FORECAST 4.6%, PREVIOUS 4.3%) FRENCH CPI MOM NSA PRELIM ACTUAL 1% (FORECAST 0.8%, PREVIOUS 0.1%) FRENCH HICP MOM PRELIM ACTUAL 1.1% (FORECAST 1%, PREVIOUS 0.0%) FRENCH CONSUMER SPENDING MOM ACTUAL 0.3% (FORECAST 0.3%, PREVIOUS 0.9%) Source: Bloomberg
UBS Group AG posted a $29 billion second-quarter profit in first results since Credit Suisse takeover.
This is the biggest-ever quarterly profit for a bank in the second quarter as a result of its emergency takeover of Credit Suisse, and confirmed that it would fully integrate the local business of its former rival by next year. Key takeaways: - UBS said the result primarily reflected $28.93 billion in negative goodwill on the Credit Suisse acquisition (i.e this huge profit is due to a huge one-off gain that reflects how the acquisition costs were far below Credit Suisse's value). Underlying profit before tax, which excludes negative goodwill, integration-related expenses and acquisition costs, came in at $1.1 billion - The accounting gain for the quarter eclipses JPMorgan Chase & Co.’s $14.3 billion profit in the first quarter of 2021, the modern record for US and European lenders; - Analysts had projected a net profit of $12.8 billion for the three months to the end of June, according to a Reuters poll. Source: Bloomberg, CNBC Source illustration: Sonntagzeitung / Melk Thalmann
