How far behind the curve exactly?



A look at the day ahead in markets from Julien Ponthus. On Friday, St. Louis Fed President James Bullard argued that the U.S. Federal Reserve is "not as far behind the curve as you might have thought".

With inflation running over 6%, the jury is out on whether last week's 50 basis point rate hike is catching up with the curve or falling woefully behind.

But while the terminal U.S. rate pricing solidifies around 3.5% in mid- 2023, only time will tell whether the Fed's aggressive plan to hike rates this year will tip the economy into recession or not.

Equally, the pace of interest rates hikes is already fuelling recession fears in Britain where the BoE warned that dealing with an inflation over 10% will have dire consequences for the economy.

In the meantime, the world must now cope with fast-rising bond yields and a surging greenback.

The dollar hit a two-decade high this morning as investors turned to their favourite safe haven as the war in Ukraine and COVID-19 lockdowns in China continued to weigh on global growth.

This morning's data showed China's export growth slowed to its weakest in almost two years.

These growth concerns may deter central banks, especially in Europe and Japan, to tighten policy in line with the Fed.

A number of currency strategists have already flagged the risk of seeing the euro go below parity with the dollar while the yen is trading towards levels unseen in about two decades.

The mood is also worsening across stock markets as the rise in yields of 'risk-free' government bonds dent the appeal of wobbly risk assets.

U.S. stocks marked their fifth consecutive weekly drop last week -- its worst run since 2011.

The Nasdaq is down about 25% from its peak in November when the 'transitory inflation' narrative was officially ditched by central bankers.

After four consecutive weekly losses, European stock markets are set to begin cash trading yet again in the red this morning. Key developments that should provide more direction to markets on Monday: -Chipmaker Infineon raises 2022 revenue outlook after results beat -G7 to phase out Russian oil, U.S. sanctions Gazprombank execs over Ukraine war -China's exports growth hits 2 year-low as virus curbs hit factories -Japan's service sector activity posts first growth since Dec - PMI

-Indonesia's economy stays on growth path in Q1 as price pressures loom

-Bitcoin falls to lowest since January, in line with tumbling stock markets



FEd funds and dollar Link



Reporting by Julien Ponthus; Editing by Saikat Chatterjee

Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.

Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.

Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.

Gumagamit kami ng cookies para mabigyan ka ng mahusay na karanasan sa aming website. Magbasa pa o palitan ang iyong cookie settings.

Babala sa Risk: Maaaring malugi ang iyong kapital. Maaaring hindi nababagay sa lahat ang mga produktong naka-leverage. Mangyaring isaalang-alang ang aming Pahayag sa Risk.