Research Market strategy
By Swissquote Analysts
Video news

What are you doing, Mr, Bailey?!

We are only Wednesday, and the Bank of England (BoE) already intervened twice this week, to cool down the unbearable negative pressure on the British sovereign bonds. But the BoE Governor Bailey’s lack of tact sent all efforts up in smoke. The UK sovereign and sterling remain under a decent selling pressure.

Beyond Britain, all eyes are on FOMC minutes and the US inflation data.
Today, the minutes from the FOMC’s latest meeting will reveal if some Federal Reserve (Fed) members are concerned about going ‘too fast’ in terms of rate hikes. US will also reveal the latest producer price index for the month of September. The US factory-gate prices are expected to have slowed from 8.7% to around 8.4%.

Then tomorrow, we will have a better insight about the situation in consumer prices. The headline CPI is expected to have slowed from 8.3% to 8.1%, but core inflation may have spiked higher, which is bad news for those praying for the Fed to slow down the pace of its rate tightening.
Elsewhere, the IMF cut its global growth forecast for next year to 2.7%, from 2.9% in July, and from 3.8% in January, and said that there’s 25% probability that growth will slow to less than 2%. In the euro area, the GDP could rise just 0.5% next year.

The EURUSD remains under a decent pressure of the strong dollar, and only a soft inflation data from the US could help the euro bears take a pause.

In Japan, things are not necessarily better. The USDJPY spiked above the 146 level for the first time in 24 years, and investors couldn’t trade the 10-year JGBs for three days, because the BoJ broke the system by buying just too much of the 10-year bonds to conduct a yield curve control strategy.
Swap traders are now betting that the BoJ can’t carry on with abnormally low interest rates for so long, and will be forced to hike its rates at some point.

Watch the full episode to find out more!

What are you doing, Mr, Bailey?! | MarketTalk: What’s up today? | Swissquote
By
Swissquote (in English)
Video news

War, Covid, US-China tensions, inflation, market panic..

Risk sentiment is morose this week with the escalating tensions in Ukraine, rising Covid cases in China, mounting tensions between US and China, the selloff in US and other treasuries, the relentless appreciation in the US dollar and the drop in safe haven currencies.

The Swiss franc lost ground against the greenback and the USDCHF rose above parity. The Japanese yen continued its historic fall as well, the dollar yen advanced to 145.80.

Gold fell for the fifth day to $1660 per ounce, and is set to dive deeper toward the $1600 level on the back of a relentless rise in the US yields and the dollar.

And the US yields press higher on the back of hawkish Federal Reserve (Fed) pricing, despite a couple of less hawkish comments from some Fed members at the start of the week.

The US 2-year yield advanced to 4.35%, and activity on Fed funds futures price 77.5% chance for a 75bp hike at next FOMC meeting. Even the UK yields shot higher despite the Bank of England’s (BoE) announcement of more measures to calm down the Truss-hit gilt market.

At least, the avalanche of bad global news has been successful in pulling oil prices lower yesterday. The barrel of American crude eased to $90 this morning, after having flirted with $94 a barrel on Monday.

US earnings season kicks off in a dark and depressed environment. According to data from FactSet, the EPS growth of the S&P500 companies should fall by 2.6% to below 10% in the Q3.

Watch the full episode to find out more!

War, Covid, US-China tensions, inflation, market panic.. | MarketTalk: What’s up today? | Swissquote
By
Swissquote (in English)
Video news

What would be the BEST mix of US jobs data?

Equities retreated, the US yields and the US dollar rebounded as more Federal Reserve (Fed) members threw hawkish comments to defend their fight against inflation.

The S&P500 closed 1% lower, while Nasdaq slid 0.68% despite being more sensitive to rate hikes. The US short-term yields rose, and the dollar index gained. Gold eased, while oil extended gains.

Yet the rising oil prices fuel inflation and Fed expectations and certainly don’t do good to the overall market mood. Also, Shell warned investors that the Q3 results won’t be as breathtaking as the Q2, as the weaker gas trading and weaker refining will be reflected in the latest quarter earnings.
Today, the US will announce its latest jobs data in a tense and volatile environment of energy crisis, persistent inflation, Fed members insisting that what they are doing is right, and markets crying that what they are doing is maybe a bit too much.

Investors will be watching three main elements. The NFP data, the unemployment and participation rates, and the wages growth.

Expectation for today is a NFP read of around 250K, unemployment rate at 3.7%, and wages growth of around 0.3% over the month.

A mix of soft data will likely see a bullish kneejerk reaction, as investors are turning more concerned about the aggressive Fed tightening and are ready to bet that the rate hikes would slow down in the next few meetings and even stop, while a strong data could trigger a further selloff, as it would fail to keep the aggressive Fed hawks at bay.

Watch the full episode to find out more!

What would be the BEST mix of US jobs data? | MarketTalk: What’s up today? | Swissquote
By
Swissquote (in English)