The Morning Hark - 7 Aug 2023

Today’s focus...taking stock of last week's moves and patiently waiting for Thursday's US CPI print.

• A calm Wellington open relative to the stormy conditions of last week (EURUSD 1.10, USDJPY 142, US10s 4.06%, ESA 4515). 

• BoJ Summary of Opinions: they debated the prospects of sustained inflation, particularly a new phase of wage inflation/behaviour. Conditions for phasing out stimulus could fall into place over the coming quarters. There was little impact on JPY as the focus was on highlighting both upside and downside risks to inflation as well as their more flexible approach (More reading on Reuters)

• Oil around its 4 month highs as Opec+ maintain their supply constraints as well as HF's giving up on their pessimistic growth narrative (oilprice.com).  

• Fed's Bowman kept September on the table, "more rates likely needed". (Fortune)

• Yellow files for bankruptcy, one of the largest US Truckers. Drop in demand, union standoff as well inability to refi over $1bln of debt in 2024. (WSJ)

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The Cleveland Fed Nowcast model estimates core CPI coming in at 0.4% MoM well above the BBG estimate of 0.2%. As Bowman pt's to more potential hikes and with only 30% chance of a Sept move this is the key event risk for yields and USD on the week. For more reading on this week's key data, see The Weekly Hark.  

Looking forward to another MAJOR week ahead with US fixed income sitting on a precipice. The risk of a short-term bottom presides for CPI as well as key US auctions ... How much of a concession will the Bond mkt ask for?

• ING: Key events in developed markets next week

• Newsquawk: Week ahead highlights include US & China CPI, BoJ SoO and UK GDP 

• Marctomarket.com: Is the Dollar’s Run since Mid-July over?

• Fx:macro Outlook for Week 32/2023

 

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1. FT: How bonds ate the entire financial system 

2. FT: Biggest Chinese mutual funds near limits on offshore investment

3. The Perceptive Trader: On Becoming a Great Loser

4. Christophe Barraud: US 30-Year Mortgage Rates Hit A 23 Year High, Raising Concerns

5. JPM Global data Pod Weekender: Controlled descent

Bonus article from Steno Research... Free from behind the paywall.  Business Cycle Watch - Recession or Rebound? GDI vs GDP. Is GDI the canary in the coalmine?

Follow the latest market narratives through our curated research & commentary channels on Harkster.

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All times in British Summer Time (BST)

US (13:30): Fed's Bowman (Voter) and Bostic (Non-Voter)

UK (16:00): BoE's Pill 

 

 

 

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