Dominique Dwor-Frecaut
Summary April core CPI at 29 bp MoM was in line with expectations of 0.3% MoM and well above the Fed’s target. The details show inflation trends are improving little: housing inflation remains stable and high, while supercore inflation is accelerating. April PPI and CPI suggest core PCE around 0.3%, inconsistent with the Fed’s end-2024 […]
Macro Hive
Key Events G10 In the US, the headline is CPI and retail sales: CPI – Wednesday. Consensus expects 0.3% MoM for core. I see upside risks due to April’s rising energy prices and strong demand backdrop. Sam’s model will give an early read. Yet even with a positive surprise, this CPI print alone is unlikely […]
Dominique Dwor-Frecaut
Summary Numbers of undocumented, largely low skilled immigrants have surged since 2021. This has supported both aggregate supply through higher labour supply, and aggregate demand through higher consumption. While unusually low wage growth has accompanied the immigration surge, this has not prevented a stabilization of services inflation, possibly due to business pricing power and migrant […]
Macro Hive
Key Events G10 In the US, there are two main events: Senior Loan Officer Opinion Survey on Bank Lending Practices (Monday): We expect it will still show increased credit demand, fewer banks tightening standards, and more banks willing to extend loans – another sign Fed tightening is not reaching the economy. U. Mich. Consumer confidence […]
Dominique Dwor-Frecaut
Summary The Fed signaled less confidence on disinflation but did not change its policy outlook. The Fed still believes there may be further supply side gains to come and will not necessarily attempt to cap strong growth. The central bank is likely to react more slowly to positive or negative inflation changes than to broad-based, […]
John Tierney
Summary This earnings season is a lot about messaging. Meta Platforms (META), Alphabet (GOOG), and Microsoft (MSFT) all beat expectations and promised AI spending. However, META collapsed for saying it will be a while before realizing a return on its investment. There are signs industrial companies are finally running down inventories and will have to […]
5 researchers
We are updating our key events report. From now on, you will receive a short document to prepare you for the week ahead. This new form focuses on a curated list of data/events, as well as key central bank meetings and market views across G10 and EM. Key Events G10 In the US, there are […]
John Tierney
Summary Last week’s selloff in the semiconductor sector most likely opens opportunities to establish positions in the AI hardware sector. Commodity chip producers will continue struggling. The Federal Reserve (Fed) may not be cutting rates for now – but we see zero likelihood it will raise rates. And if the economy slows, we expect rate […]
4 researchers
Skip to: US, Rest of G10, EM US With Dominique away this week, Antonio Del Favero covers the key US data for the coming days. Summary No Fed speakers next week as we enter the blackout period pre-FOMC (1 May). As expected, Fed speakers reacted to the third hot inflation print, confirming ‘no rush to […]
5 researchers
Skip to: US, Europe, Rest of G10, EM US With Dominique away, this week’s US section is covered by Macro Hive strategist Antonio Del Favero. Summary Inflation is no longer consistent with a June cut. I expect that only a recession can push inflation back down to target and below. Fed speakers will give their […]
5 researchers
Skip to: US, Europe, Rest of G10, EM US Summary March CPI and PPI are likely to be consistent with a June cut. Fed speakers will give their take on yet another bumper NFP. Market Implications I still expect the Fed to start cutting in June. Fed This week Chair Powell stated that ‘the recent […]
John Tierney
Summary Equities are heading into Q2 with a nice tailwind. The Federal Reserve (Fed) is inclined to cut rates, and the economy and labour market are on solid footing. Analysts project earnings gains of 8.2% for the S&P 500 (SPX) and 14.8% for the NASDAQ 100 (NDX). Still, there are reasons to expect the equity […]
Dominique Dwor-Frecaut
Summary IT capex shows the internet revolution has been ongoing since the 1990s. Yet the macro data shows no obvious impact on productivity. This could reflect measurement issues and a falling labour income share that has made for sluggish demand growth and inflation. Investors have still benefitted from the IT revolution through high profits and […]
John Tierney
Summary The good news is the Federal Reserve (Fed) has all but promised to deliver three rate cuts in 2024 even if inflation remains slow to drop. The bad news is this was already priced into the market. With the 2Y Treasury yield still trading above 4.5%, there is little visibility now on whether or […]
5 researchers
Note: Due to the upcoming holidays, this week’s Key Events covers an extended period, from 25 March to 5 April. Skip to: US, Europe, Rest of G10, EM US Summary February core PCE to support Fed narrative. NFP to show cooling wage growth but strong employment. Market Implications I expect the Fed to start cutting […]
Richard Jones
Summary This week saw a torrent of central bank rate decisions, highlighted by the Bank of Japan (BoJ) ending its negative interest rate policy (NIRP). Also, the Swiss National Bank (SNB) surprised markets by cutting rates by 25bps. The US Federal Reserve (Fed) and Bank of England (BoE) kept policy steady with comparably less fanfare, […]
Dominique Dwor-Frecaut
Summary As I expected, the Federal Reserve (Fed) stuck to its narrative of continued but slower disinflation and kept three cuts in 2024. Fed Chair Jerome Powell also made it clear the Fed would not attempt to cap growth to accelerate disinflation. Powell also indicated a quantitative tightening (QT) taper was likely to start soon. […]
Bilal Hafeez
We have been building a series of AI models that interpret central bank speeches. Unlike many existing models, ours use the full capabilities of ChatGPT (rather than older BERT models), and we go beyond analysing just sentences. It is still a work-in-progress, but here are three takes on yesterday’s Powell presser: Powell’s remarks and Q&A […]
John Tierney
Summary With the Ides of March over, investors are pondering the implications of last week’s hot inflation prints and another runup in Treasury yields. Our take is that equities stay in a narrow range until either inflation cools or the economy/employment slows, giving the Federal Reserve (Fed) cover to cut rates. Oracle Corp. caught a […]
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