The Morning Hark - 23 Aug 2023
Today’s focus... Finally, some data to focus on… European PMI’s, 20y auction as well as a 30y TIPS auction and of course Nvidia results
Another period of consolidation overnight as the summer drifts towards an end, with inboxes starting to fill up again with kids after school activity forms and other back-to-school errands.
Fed's Barkin wouldn't comment on September ... markets probability of a Sept hike remains at mid-teens, it's the Nov meeting that's drifting towards 50-50 that we've got to keep an eye on as we head towards Jackson Hole as well the next round of US labour data and CPI.
CNY fixed again sub 7.20 at 7.1988 vs exp of 7.3050 and previous 7.1992
The CNH funding squeeze has stalled the pair around 7.30. The battle lines have been drawn, the question is whether the PBoC simply want to slow the deprecation, limit “one-way bet” price action or whether they want a stronger ccy. For now, it's the former until the US economy rolls over and 10yr real yields drop back sub 2%
AI euphoria is back in the focus of the options market with Nvidia earnings to dominate price action over the next 24-48hours as well as the impending Arm IPO
BRICS: limited market news from the conference in Joberg, but the press remains focused on the risks to USD supremacy
Global Property... the lagged impact of rate rises starting to curb housing activity, as homeowners, especially in the US are landlocked at mortgage rates sub 4% and unwilling to move and refi to a mortgage north of 7%. Adding extra pressure to the rental market...
FT: Extreme renting
SCMP: As China's property crisis plagues its economy and financial system, is a 'Lehman Moment' looming?
SCMP: China must not panic over deflation and reinflate a bubble
Daily Chartbook: #264 captures some great charts on the US mortgage market, especially the divergence between the average mortgage rate of households (<4%) and new buyers (>7%)
Apricitas Economics: Have Rising Mortgage rates Frozen the Housing Market?
Jackson Hole scenario analysis continues ...
Saxo: Jackson Hole scenarios
Macro Hive: Will Jackson Hole Provide Any hints on the Fed?
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Saxo: US treasury actions will test bond markets ahead of Jackson Hole
Real Vision: What is Making the US Economy so Resilient? With Darius Dale.
Brent Donnelly: One More Time
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All times in British Summer Time (BST)
Germany (08:30): Flash PMI
Eurozone (09:00): Flash PMI
UK (09:30): Flash PMI
US (14:45): Flash PMI
US (18:00): 20y Auction and 30y TIPS.
US: After the close we get Nvidia earnings
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