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24 May 2024

After the hotter than expected Flash PMI prints yesterday, the market is pricing in one cut for this year to occur in November or December, and another in early 2025.

Source: Markets & Mayhem

22 May 2024

While the FED monetary policy is seen as restrictive, the Bloomberg US Financial Conditions Index is at record highs.

Risk premia in stocks and credit are near all-time tights as commodities are breaking higher. Source: Bloomberg

13 May 2024

Markets are currently anticipating the first Fed cut in September and a potential second cut in December.

This week's US inflation data could shift these expectations backward or forward depending on how the data comes in. Source: Markets & Mayhem

10 May 2024

Bank of England declares independence from the US Fed ->

BoE's Bailey pushed back against a slower rate cutting cycle for the UK: “Quite a lot of the market movements of late appear to have been US-originated. Inflation dynamics here are different to inflation dynamics in the US. (It’s a) very different sort of situation in terms of our economies.” Percentage odds of a June cut were similar for the BOE and Fed at the start of the quarter, but now the market sees a wide gap. Source: Jeffrey Kleintop, Bloomberg

3 May 2024

Odds of a September 2024 rate cut jump to 53% after the weaker than expected jobs report, according to Kalshi.

The base case now shows TWO interest rate cuts in 2024, up from ONE prior to the report. On Wednesday, Fed Chair Powell specifically said weakening of the labor market could spur rate cuts. Market implied odds of zero interest rate cuts this year have dropped from 35% to 27%. The Fed rollercoaster ride continues. Source: The Kobeissi Letter

2 May 2024

Fed's Powell: Very pleased we haven't seen pain originally projected.

The chart below summarizes it well: despite rates hikes and rates staying higher for longer financial conditions kept easing Source: Bloomberg, HolgerZ

2 May 2024

The Fed just eased its policy stance into this...

Source: Lawrence McDonald, Bloomberg

2 May 2024

Great team work...

Source: Sven Henrich @NorthmanTrader

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