• Fed’s Brainard: Balance sheet normalization should end this year

    The Fed needs to stop the balance sheet reduction by the end of 2019, Leil Brainard, a member of the FOMC, said on Thursday, signalling that the central bank’s bond portfolio could ultimately remain significantly higher than expected just a few months ago.

  • Why we can’t fully trust December Retail Sales

    Earlier this week, the Bank of America warned investors about a possible slump of retail sales, using internal card spending data to build the forecast:

  • When everybody sells, who buys? Who is supporting the US equities now?

    The US stock market and the Chinese yuan soared on rumors that President Trump is considering the option to move the deadline in negotiations with China, presumably by 60 days.

  • The breakdown of term and credit spread. Why China may expect more corporate defaults?

    While the market is bracing for probably dismal data on China’s trade, which will once again stress the significance of external risks for the policy of global central banks, China’s corporate debt market turns our attention to its troubles.

  • Swiss franc flash crash – PBOC fills banks with liquidity

    A month later, after various spikes ranging from tens to thousands pips in pairs with the yen, lira and sterling (and this happens on the most liquid foreign exchange market!), swiss franc joined the party on Monday.

  • Key economic events and reports of the upcoming week

    Monday, February 11, 2019 – GDP (QoQ) (Q4)(GBP), Manufacturing Production (MoM) (Dec)(GBP).

  • Fed’s Bullard: December policy move could be premature

    Federal Reserve continues to stoke concerns over its policy signalling recent rate hike could be premature. According to James Bullard, the head of the Federal Reserve Bank of St. Louis, December hike probably made monetary too restrictive as it threatens sustainable convergence of inflation to the target.

  • Could buying negative-yield JGB bring about opportunities?

    The return of the Central banks’ dovish mode, especially the recent Fed’s U-turn, prompts investors to reassess the risks of investing in high-yielding stocks and pay attention to fixed-income securities, i.e.

  • What to expect from the Bank of England today?

    It is clear that with the looming deadline for UK’s withdrawal from the EU, the horizon of policy guidance, which the BoE can offer to the markets, is proportionally reducing.

  • US car sales seem to have declined in January, but jobs market says “no worries”

    Partial US government shutdown in December and January interrupted the flow of economic reports, making it difficult to estimate consumer spending, which accounts for 2/3 of US GDP.

  • BoE is likely to keep defense in the absence of political certainty

    Non-farm payrolls released on Friday created a mixed impression about the state of the US labor market: demand for labor force grew significantly, which led to an increase in the number of new job openings by 304K in January (the biggest jump in almost a year), while the number of layoffs increased too, especially temporary, which left their footprints in the trend of jobless rate.

  • Key economic events and reports of the upcoming week

    Monday, February 4, 2019 – Construction PMI (Jan)(GBP).

  • Inflation eases in Eurozone but comes in line with projections

    According to data released on Friday, inflation in the eurozone eased in January, reaching the highest level in eight months. Union’s economic upturn faced increasing headwinds due to the US-China trade war and the approaching Brexit term.

  • Preparing for January Payrolls: why the NFP could be a particularly market-moving event today

    The Labor Department is due to release a monthly update on the US jobs market today. Taking into account the Federal Reserve’s warning on Wednesday that the policy “will rely on incoming data” and cagey vision of the upper bound of neutral rate, an upside surprise in labor data may become the powerful catalyst for upward shift of rate hike expectations. Fed’s “patience” in raising rates does not necessarily mean they gave up tightening plans completely. We have to keep this mind.

  • The Fed is at markets’ beck and call, takes strong risk-averse stance

    The Fed has surpassed itself in its intent “to be of service for financial markets”, as the contrast of fresh January policy update with the December statement was really unprecedented: