Dominique Dwor-Frecaut
Summary Recent NFP prints and pre-pandemic CBO projections suggest sub-100k NFPs could be the new normal now the immigration surge is over. If so, a large negative surprise at the 6 December NFP release is likely, which would rekindle recessions fears and expectations of Fed cuts. I expect the Fed to respond with a cut […]
Macro Hive
Key Events G10 In the US, we have a data-light week ahead: S&P PMIs – Friday. The week’s most important release will be the S&P PMIs. Like most soft data, they have decoupled from the hard data so tell us little about the economy. For a trading perspective on the PMIs, see our Event Monitor. […]
Bilal Hafeez
Alberto Gallo is Chief Investment Officer and Co-founder at Andromeda Capital Management. Prior to that, Alberto initiated and ran the Global Credit Opportunities fund at Algebris Investments.
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were up +0.7% over the past week, with FX models gaining +1.4% WoW, rates models up 0.3% and equity models down -0.5% WoW. Momentum models are up in aggregate over […]
Macro Hive
Key Events G10 In the US, there is… CPI – Wednesday. From a trading perspective, CPI is the more important release (for market impact, see our Event Monitor). From an economic and Fed perspective, it is the CPI/PPI combination that matters because they will give us an estimate of core PCE, the price index targeted […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were up +0.5% over the past week, with equity models gaining +1.0% WoW, and FX and rates models both up +0.3% WoW. Momentum models are down in aggregate over a […]
Macro Hive
This Week Global Macro – Bilal discusses market messaging into the US election. US Macro – Dominique highlights key pieces we have published on the US election. US Rates – Antonio thinks the US elections are neck and neck, and Harris’ chances have been underestimated by markets (why he closed his US rates short last […]
Macro Hive
Key Events G10 In the US, there is… Elections – Tuesday. Prediction markets see a Republican sweep as the most likely outcome, which consensus views as bad for inflation but good for growth. The surprise would be a Republican sweep followed by macroeconomic stability, though we will not know the policy directions of the incoming […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were flat over the past week, with equity models down -0.8% WoW, FX models down -0.1% WoW and rates models up +0.8% WoW. Momentum models are down in aggregate over […]
Macro Hive
Key Events G10 In the US, there is… NFP – Friday. I agree with the consensus though the number will be difficult to interpret because of the impact of hurricanes. PCE, personal spending and income – Thursday. We expect core PCE MoM at 24bp. I will be focusing on the low savings rate as it […]
Dominique Dwor-Frecaut
Summary Unemployment has been increasing for the past 1.5 years, triggering Sahm’s rule. But Sahm’s rule is more a statistical regularity than a predictive model of recession. With other labour market indicators and aggregate demand data pointing at expansion, the US economy is not headed for recession. Market Implications We are short 10Y and 30Y […]
Antonio Del Favero
Summary US monetary policy (MP) does not look that restrictive, and financial conditions (FCs) are supporting labour market and economic growth. While the mistakes of the great inflation have been avoided, core inflation will struggle to return to target. The Fed and markets are still too optimistic about cuts. The election outcome could just mean […]
Dominique Dwor-Frecaut
Summary A bottom-up assessment of monetary policy transmission suggests policy fine-tuning would be difficult. Residential investment is the demand component most responsive to funding costs but accounts for only 3.5% of GDP. The Fed impacts consumption, which accounts for 70% of GDP, mainly through equity and home prices rather than through funding costs. Non-residential investment […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were down -0.4% over the past week, with equity models up 0.6% WoW, FX models down -0.7% WoW and rates models down -0.6% WoW. Momentum models are down over a […]
Dominique Dwor-Frecaut
Summary NFPs again surprised on the upside by a wide margin. The release details show the labour market tightened in September. This may reflect the end of the 2022-24 immigration surge that allowed for disinflation with strong growth. Ahead, the Fed could start facing the traditional employment vs inflation trade-off. Market Implications I still expect […]
Macro Hive
Key Events G10 In the US, there are two key data releases: CPI and PPI – Thursday and Friday. As always, the Fed will focus on the PCE estimate to be derived from CPI and PPI rather than on CPI. The PCE estimate is unlikely to be large enough to prevent the Fed from cutting […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were down -0.4% over the past week, with equity models down -0.3% WoW, FX models down -0.6% WoW and rates models down -0.1% WoW. Momentum models are down over a […]
Dominique Dwor-Frecaut
Summary US dockworkers in ports accounting for 60% of maritime freight have gone on strike. The impact on growth and inflation is likely to be limited as any deep disruption would likely see the Biden administration intervene. Market Implications I still expect two more 25bp Federal Funds Rate (FFR) cuts in 2024. Dockworkers on Strike […]
Macro Hive
Summary A Republican sweep (red WH and Congress) could result in stagflation and force the Fed to hike. Meanwhile, a Democratic sweep (blue WH and Congress) would likely align with the Fed’s current projections. Market Implications A Trump victory would likely lead to bear steepening in the yield curve, and a stronger USD especially vs […]
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