Read on the Trading Floor - 06 Dec 2023
Today’s focus… ECB the only story in town
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Macro Themes At Play
Theme 1 - Wake me up at Friday 13.30GMT
Theme 2 - ECB Hike, Pause and then Cut
Further reading and listening of note from Harkster.com
Theme 1 - Wake me up at Friday 13.30GMT
Holiday party season has started with Londoners flocking to Mayfair to pay over £7 for a pint (sigh) and it feels like the broader market is also hungover, suffering from November's exuberance. With NFP, CPI and Fed ahead of us, as well as the prospect of the year end pnl mark, the bar to trading on second tier data is simply too high to get participants excited.
German factory orders didn't even come close to the exp 0.2% print, dropping 3.7% MoM (-7.3% YoY). Hardly a surprise when construction PMI is at 36.2 vs prior 38.3.
Bailey - second half of inflation battle will be 'hard work'... (Bloomberg - BOE’s Bailey Resists UK Rate Cuts for ‘Foreseeable Future’)
30 yr mortgage rates now down to 7.17%
ADP 103k vs exp 130k and prior 106k.
BoC - a hawkish hold @ 5% (ING - BoC retains its hawkish bias)
Theme 2 - ECB Hike, Pause and then Cut
Coming on the back of Schnabel's turn (Reuters), cuts cuts and more cuts are landing in the Eurozone, with a 90% chance of a Q1 cut...