Central bank liquidity and the Sp500 are experiencing a rather large divergence. Will it matter?
Source: Markets & Mayhem
Even with gold near ATHs, central banks are still buying record tonnage of yellow metal...
Source: FT
Markets are now betting on big rate cuts next year
This chart shows that money markets have raised policy-easing wagers since the middle of October: by September 2024, the FED should have cut by 70 basis points, the ECB by 65 basis points and the BoE by 40 basis points. (pricing is derived from swap rates tied to policy-meeting dates) Source: Bloomberg
Central Banks around the world are now cutting rates at the fastest pace in more than 3 years
When will the U.S. follow suit? Source: Barchart, BofA
BREAKING: The yen falls near 150 after the Bank of Japan makes only modest tweaks to its yield control program, defying market expectations
Japan’s centralbank decided to make its yield curve control (YCC) policy more flexible, shifting the language used to describe the upper bound of the 10-year Japanese government bond yield. The BoJ said it will patiently continue monetary easing under YCC to support economic activities. BOJ makes the decisions on YCC by an 8-1 vote. The decision is sending the $USDJPY back to above 150.
The race to raise rates summarized in one chart
Source: LSEG Datastream, Reuters
Quantitative tightening (QT) may have taken a backseat in recent months, but is still very much in vogue
Source: BofA, TME
China Injects Most Short-Term Cash Into Banking System on Record - Bloomberg
China pumped the most liquidity into its financial system via short-term monetary tool on record, suggesting policymakers are keen to keep funding costs low to bolster the economy. The People’s Bank of China granted lenders a net 733 billion yuan ($100 billion) of cash with the so-called reverse repurchase contracts on Friday. That came after data released this week flashed signs of a pickup in the economy last month, when consumer spending and industrial production came in stronger-than-expected. Lenders keep one- and five-year loan prime rate unchanged. Source: Bloomberg
