Headlines. Thursday, 25 October Rates: Carnage on US stock markets. Currencies: Dollar profits only modestly from global risk-off.
|
|
- Estella Sherilyn Rogers
- 5 years ago
- Views:
Transcription
1 Rates: Carnage on US stock markets The stock market sell-off remained the key trading theme with US indices this time leading the way lower, closing 2.4% to 4.4% lower. Core bonds profit, but the magnitude of the moves is smaller. We don t think that correction on bourses is already over. The ECB will keep policy unchanged, but Draghi might sound slightly more cautious on the outlook. Currencies: Dollar profits only modestly from global risk-off EUR/USD dropped on a disappointing EMU PMI s yesterday. However, later the dollar rally stalled as US markets were hard hit in the risk-off correction, preventing the dollar to further play its safe haven role. Today, the focus will be on the ECB press conference and on equities. It might not be evident for the dollar to really take the lead if global uncertainty persists. Calendar Headlines US equity markets lost substantial ground yesterday as all major indices lose more than 2%, with Nasdaq (-4.4%) underperforming. Asian markets opened in deep red as well with Japanese indices falling hardest. Former US president s Barack Obama and the Clinton family were among the targets of suspected package bombs delivered to highly ranked Democrats and the news station CNN. The FBI said it was investigating it as an act of terrorism. S&P Eurostoxx 50 Nikkei Oil CRB Gold 2 yr US 10 yr US 2yr DE 10 yr DE EUR/USD USD/JPY EUR/GBP South Korea s growth slowed more than expected, with a GDP growth of only 0.6% in Q3 (QoQ, 0.8% exp.) and 2.0% year-on-year (2.3% exp.). This growth slump could lead to the central bank refraining from tightening policy this year. The Bank of Canada raised its benchmark interest rate for a 3 rd time this year by 0,25% to 1.75%. The BoC acknowledged for the first time in more than a decade it expects to completely remove monetary stimulus from the economy. The Saudi Crown Prince Mohammed bin Salman, widely expected to be behind the Khashoggi murder, has called the murder hideous and pledged to bring the killers to justice. He also struck a conciliatory tone with Turkey. Marek Mora, board member of the Czech National Bank, said he sees a 50/50 chance that he will support another interest rate hike at the next board meeting on November 1 st. The CNB already hiked four times this year. Today s eco calendar contains US Jobless Claims and German IFO business sentiment. The ECB and Norges Bank meet. Fed s Vice Chairman Clarida speaks, the US taps the market and Amazon & Alphabet report earnings. P. 1
2 Rates Carnage on US stock markets; core bonds profit US yield -1d 2 2,83-0,05 5 2,94-0, ,10-0, ,33-0,04 DE yield -1d 2-0,62-0,02 5-0,19-0, ,40-0, ,03 0,00 Stock markets remained yesterday s key trading theme with US stock markets this time taking the lead lower. The Dow, S&P and Nasdaq respectively ended 2.4%, 3.1% and 4.4% in red. Core bonds attracted safe haven flows, with US Treasuries significantly outperforming German Bunds. There was no clear trigger for yesterday s sell-off. It was merely a continuation of the correction that started early October which probably isn t over yet when looking at it from a technical point of view. Disappointing new home sales confirmed the slowing down in the US housing market while major earning releases published before the bell couldn t convince. October EMU PMI s already added to global growth slowdown fears in European trading. US yields declined by 3.7 bps (30-yr) to 7.2 bps (5-yr) on a daily basis. German yield changes varied between -1.7 bps (5-yr) and +0.2 bps (30-yr). 10-yr yield spread changes vs Germany ranged between -3 bps (Spain) and +3 bps (Italy). Most Asian stock markets lose more than 2% overnight with Japan underperforming (-3.5%) on the back of a stronger yen. The US Note future treads water. We expect the Bund to open stronger in a catch-up move with European indices opening deeply in negative territory. Today s eco calendar contains German Ifo business sentiment, US durable goods orders and weekly jobless claims. For once, the data might impact trading even with the ECB policy meeting scheduled for the afternoon. It will especially be so in case of disappointing figures, which we fear. Fragile risk sentiment on stock markets will probably last. We expect more safe haven support for core bonds, even if the magnitude on bond markets moves doesn t correspond with losses on stock markets. The German and US 10-yr yields closed below support levels at respectively 0.41% and 3.12%. The ECB is expected to keep its policy and guidance unchanged. We wonder whether Draghi will be able to convincingly repeat his most recent warning about vigorous expected upward pressure on core inflation. Cumulated growth, wage inflation and the ECB s very easy policy should be the main drivers. In the current uncertain context, the onus could be on growth fears, stock market volatility and EMU fiscal plans. Overall, we think Draghi will try his utmost best to give investors as little to trade on as possible, but it will be hard not to strike a more cautious tone on the growth outlook. Af US S&P 500 erases YTD gains as October sell-off continues US 10-yr yield: upleg interrupted by safe haven flows stemming from stock market correction P. 2
3 Currencies Dollar profits only modestly from global risk-off R2 1,2155-1d R1 1,1996 EUR/USD 1,1392-0,0079 S1 1,1510 S2 1,1448 R2 0,91-1d R1 0,9052 EUR/GBP 0,8844 0,0008 S1 0,8628 S2 0,8548 EMU PMI s rekindled fears for a meaningful slowdown in the region yesterday morning. EUR/USD tumbled from the area to fill bids near early in US dealings. Later, US events/data brought some balance to the bad news story. US new home sales disappointed again (-5.5% M/M). Headlines on bomb packages for several democrats didn t help to comfort markets. A genuine US equity sell-off accelerated throughout the session. The move suggests investor worries that also the US economy might near a cycle peak, despite solid earnings reported so far. As was the case earlier in this (US) equity correction, the dollar didn t profit any further. EUR/USD stabilised in the 1.14 area. USD/JPY drifted off the intraday peak to close the day at This morning, the equity sell-off continues in Asia. Tech stocks are again hit hard with Japan underperforming. Losses on other markets are substantial (1.5% to 2.5%), but could have been even worse given the sell-off in the US. Other interesting observation, EM currencies like the INR, IDR and even CNY are holding up reasonably well given the global context. EUR/USD tries to regain the 1.14 barrier. USD/JPY dropped (temporarily?) below 112. Later today, the IFO German confidence and US durable orders are interesting. However, the market focus will be on equities and on the ECB press conference. We assume Draghi to stay neutral-to-positive in its guidance. Question is whether markets will believe him given recent data and tensions on Italy. Stocks remain a wildcard. As US markets are currently hit at least as hard as Asian/European markets. It is less evident for the dollar to take up its safe haven role. Recently, we saw some by default USD buying even as the move showed little conviction. EUR/USD drifted lower and cleared the last support ahead of the correction low. A test of this low is still possible. As markets apparently also question US future growth, we don t anticipate a EUR/USD break to a new 2018 low yet. The yen performance also wasn t convincing of late. A break below USD/JPY could trigger further yen buying. Yesterday, UK PM May again survived a meeting with conservative MP s. However for now there is no indication that a solution is coming closer. Sterling remained in the defensive. Today, there are no UK eco data. Sterling trading might be a bit more affected by global factors. We see risks for ongoing sterling underperformance against the dollar and, to a lesser extent, the euro in case of ongoing global market tensions. EUR/USD drops below 1.14 support, but sustained break of year low looks not that evident USD (Trade-weighed DXY): trading cautiously higher, but no outright technical break yet, despite risk-off P. 3
4 Calendar Thursday, 25 October Consensus Previous US 14:30 Advance Goods Trade Balance (Sep) -$75.1b -$75.5b R 14:30 Wholesale Inventories MoM (Sep P) 0.5% 1.0% 14:30 Retail Inventories MoM (Sep) % 14:30 Durable Goods Orders (Sep P) -1.5% 4.4% 14:30 Durables Ex Transportation (Sep P) 0.4% 0.0% 14:30 Cap Goods Orders Nondef Ex Air (Sep P) 0.5% -0.9% 14:30 Cap Goods Ship Nondef Ex Air (Sep P) 0.4% -0.2% 14:30 Initial Jobless Claims 215k 210k 14:30 Continuing Claims 1644k 1640k 16:00 Pending Home Sales MoM/NSA YoY (Sep) 0.0%/-2.6% -1.8%/-2.5% 17:00 Kansas City Fed Manf. Activity (Oct) Japan 01:50 PPI Services YoY (Sep) 1.2% A 1.3% EMU 13:45 ECB Deposit Facility Rate (Oct 25) % % Germany 08:00 GfK Consumer Confidence (Nov) :00 IFO Business Climate (Oct) :00 IFO Expectations (Oct) :00 IFO Current Assessment (Oct) Norway 08:00 Unemployment Rate AKU (Aug) 4.0% 4.0% 10:00 Deposit Rates 0.75% 0.75% Spain 09:00 Unemployment Rate (3Q) 14.85% 15.28% Events Q3 earnings Celgene (bef-mkt), Merck & Co (12:45), Twitter (13:00), Alphabet (aft-mkt), Amazon (22:01), Snap (22:15) 01:00 Fed's Brainard Speaks at Event on Economic/Financial Literacy 18:15 Fed Vice Chairman Clarida Speaks on Economic Outlook 19:00 US to Sell USD31 Bln 7-Year Notes P. 4
5 10-year Close -1d 2-year Close -1d Stocks Close -1d US 3,10-0,06 US 2,83-0,05 DOW 24583,42-608,01 DE 0,40-0,01 DE -0,62-0,02 NASDAQ 7108, ,14 BE 0,82-0,02 BE -0,54-0,03 NIKKEI 21268,73-822,45 UK 1,46-0,01 UK 0,75 0,01 DAX 11191,63-82,65 JP 0,11-0,02 JP -0,12-0,01 DJ euro ,33-10,61 IRS EUR USD GBP EUR -1d -2d USD -1d -2d 3y 0,03 3,07 1,21 Eonia -0,3690 0,0000 5y 0,35 3,09 1,36 Euribor-1-0,3700-0,0010 Libor-1 2,2814 0, y 0,97 3,17 1,58 Euribor-3-0,3170 0,0000 Libor-3 2,4899 0,0000 Euribor-6-0,2590 0,0000 Libor-6 2,7476 0,0000 Currencies Close -1d Currencies Close -1d Commodities Close -1d EUR/USD 1,1392-0,0079 EUR/JPY 127,88-1,11 CRB 194,47-0,50 USD/JPY 112,26-0,18 EUR/GBP 0,8844 0,0008 Gold 1231,10-5,70 GBP/USD 1,2881-0,0102 EUR/CHF 1,1367-0,0045 Brent 76,17-0,27 AUD/USD 0,706-0,0026 EUR/SEK 10,3952 0,0423 USD/CAD 1,3057-0,0028 EUR/NOK 9,5138 0,0020 If you no longer wish to receive this mail, please contact us: to unsubscribe Contacts Brussels Research (KBC) Global Sales Force Mathias Van der Jeugt Corporate Desk(Brussels) Peter Wuyts Institutional Desk(Brussels) Mathias Janssens CBC Desk (Brussels) Dieter Lapeire France Dublin Research London Austin Hughes Singapore Shawn Britton Prague Research (CSOB) Prague Jan Cermak Jan Bures Bratislava Research (CSOB) Marek Gabris Bratislava Budapest Research David Nemeth Budapest ALL OUR REPORTS ARE AVAILABLE VIA OUR KBC RESEARCH APP (iphone, ipad, Android) This non-exhaustive information is based on short-term forecasts for expected developments This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice. P. 5
Headlines. Monday, 24 September Rates: FOMC and Italian budget vital this week. Currencies: Dollar decline to slow? Fed policy decision looms.
Rates: FOMC and Italian budget vital this week Trading might be subdued in the run-up to this week s main events: the FOMC meeting and the Italian 2019 budget release. First time forecasts of the 2021
More informationHeadlines. Friday, 20 July Rates: Sideways consolidation ranges hold firm. Currencies: Trump comments on Fed block USD rebound.
Rates: Sideways consolidation ranges hold firm Core bonds gained ground yesterday, but remain stuck within narrow sideways consolidation ranges. Today s eco calendar is uneventful, suggesting risk sentiment
More informationHeadlines. Wednesday, 14 November Rates: Italy raises the stake with the EU. Currencies: Dollar rally taking a breather.
Rates: Italy raises the stake with the EU Italy didn t change its draft budget, raising the stake with the EU. The EC can now forward the issue to ECOFIN, possible resulting in starting up an excessive
More informationCurrencies: Diminishing interest rate support prevents USD to play its safe haven role
Rates: US Treasuries rally on market jitters ahead of Fed Global core bonds were mixed yesterday. Ongoing growth concerns and slumping oil prices caused US equities to slide to a multi-month low. US Treasuries
More informationInternal. Currencies: Dollar doesn t profit from hawkish Fed. ECB to propel the euro?
Internal Thursday, 14 June 2018 Rates: US Treasuries limit losses despite the Fed s message The Fed hiked its policy rate to 1.75%-2% while median rate forecasts for 2018 and 2019 increased, suggesting
More informationCurrencies: dollar momentum improves going into US CPI release
Rates: Downward bias core bonds Yesterday s risk aversion proves to be short-lived with Asian stock markets and US equity futures extending their recent rebound higher. US CPI inflation is forecast to
More informationHeadlines. Wednesday, 03 January Rates: Bear steepening in opening session of the year. Currencies: EUR/USD nears 2017 top.
Rates: Bear steepening in opening session of the year Global core bonds started the New Year on a weak footing with bear steepening of both the US and German yield curves. Trading will be mainly guided
More informationCurrencies: Dollar bottoms, but technical confirmation is still needed
Rates: US reflationary spirits back alive Surging US stock markets, hawkish comments by Fed Mester and a very robust Beige Book revived reflationary spirits and caused an underperformance of US Treasuries.
More informationHeadlines. Wednesday, 29 August Rates: Technically-inspired trading ahead. Currencies: EUR/USD rally to run into resistance.
Rates: Technically-inspired trading ahead Technically-inspired trading might be today s recipe on core bond markets. Investors eye tomorrow and Friday s inflation data. The negative impact of supply might
More informationHeadlines. Thursday, 22 February Rates: US 10y real interest rate reaches 5-yr high. Currencies: USD nearing first significant resistance area
KBC Market Research Desk Havenlaan 2, 1080 Brussels Rates: US 10y real interest rate reaches 5-yr high US yields reached new cycle highs in the wake of FOMC Minutes which shifted market bets more towards
More informationRates: Engulfing patterns suggest more upward potential for German yields
KBC Market Research Desk Havenlaan 2, 1080 Brussels Rates: Engulfing patterns suggest more upward potential for German yields A strong German Ifo business confidence and positive risk sentiment following
More informationCurrencies: EUR/USD balance restored after hawkish ECB rumours
Rates: Fragile balance ahead of tomorrow s FOMC meeting Initial losses on core bond markets were undone by a sell-off on US stock markets. Fragile risk sentiment and the possibility of a hawkish shift
More informationHeadlines. Monday, 12 March Rates: Underperformance US T-Note on US supply? Currencies: EUR/USD topside better protected post-ecb?
Rates: Underperformance US T-Note on US supply? Today s eco calendar is empty apart from a (heavy) start to the US s mid-month refinancing operation. That could cause more underperformance of the US Note
More informationHeadlines. Thursday, 03 January Rates: Core bonds start year on strong footing
Rates: Core bonds start year on strong footing A dismal Chinese manufacturing PMI set the tone for risk-off trading in Asia/Europe yesterday with Bunds and US Treasuries surging. Liquidity remained rather
More informationUS stock markets ended 0.3% to 0.5% lower with Dow Jones (flat) outperforming. Most Asian stock markets record similar losses overnight.
Wednesday, 17 January 2018 Rates: More consolidation near sell-off lows? Today s eco calendar probably won t shift trading dynamics in a profound way. German and US yields remain close to, but below, key
More informationHeadlines. Friday, 23 March Rates: US 10-yr yield tests important support. Currencies: Trade war a tentative USD negative?
Rates: US 10-yr yield tests important support An intensification of the equity sell-off could generate more safe haven flows into core bonds. The nature of the stock market root suggests though that this
More informationHeadlines. Thursday, 20 December Rates: Fed doesn t live up to market expectations. Currencies: Markets flunk the Fed.
Rates: Fed doesn t live up to market expectations The Federal Reserve delivered a dovish hike yesterday: a policy rate hike of 25 bps but a lower median rate forecast for 2019 with 25 bps. Investors clearly
More informationHeadlines. Tuesday, 08 January Rates: Payrolls, Powell and services ISM floor US yields
Rates: Payrolls, Powell and services ISM floor US yields A strong US non-manufacturing ISM caused new weakness in US Treasuries, bear flattening the curve. Together with payrolls and Powell s comments,
More informationHeadlines. Wednesday, 16 January Rates: No adverse reaction to brexit-vote defeat. Currencies: Dollar again received the benefit of the doubt.
Rates: No adverse reaction to brexit-vote defeat UK PM May s brexit defeat didn t came as a surprise with global markets taking it relatively well. Risk sentiment will probably set the tone as the eco
More informationHeadlines. Wednesday, 12 September Rates: US 10-yr yield eyes 3% Currencies: dollar holding tight ranges. Calendar
Rates: US 10-yr yield eyes 3% Strong eco data, higher oil prices and heavy supply keep core bonds under downward pressure as trade tensions ease. The same factors remain at play today. The US 10-yr yield
More informationHeadlines. Thursday, 10 January Rates: Easy part of risk rebound over? Currencies: Dollar decline accelerates. EUR/USD clears 1.15 resistance.
Rates: Easy part of risk rebound over? FOMC Minutes and speeches by more Fed governors cement the US central bank s new narrative of patience in the tightening cycle. This message should be by and large
More informationHeadlines. Tuesday, 11 September Rates: Technically driven trading in absence of data/events
Rates: Technically driven trading in absence of data/events Tuesday, 11 September 2018 Today s eco calendar is empty apart from German ZEW investor sentiment which probably won t impact trading. We expect
More informationRates: ECB straightjacketed, Turkish CB could influence risk sentiment
Rates: ECB straightjacketed, Turkish CB could influence risk sentiment The ECB meets today, but normally won t deliver fireworks. Rumours suggest small downward revision to the growth scenario, but that
More informationCurrencies: US stays in the defensive as markets ponder Fed rate hike intentions
Rates: US yield support holds amid sell-off on stock markets Tuesday, 20 November 2018 US Treasuries ended near opening levels, finding a balance between technical considerations (key US yield support)
More informationCurrencies: Dollar jumps on strong US data, higher US yields and hawkish Powell
Rates: Haemorrhage on bond markets US Treasuries were hit by a quadruple whammy yesterday. More extremely strong US eco data turned out to be the straw that broke the camel s back. Add higher oil prices,
More informationCurrencies: EUR/USD testing range top ahead of the US payrolls
Rates: Big day ahead Today s eco calendar heats up with EMU CPI, US Payrolls and US non-manufacturing ISM. We have a positive intraday bias for core bonds especially if this week s risk/oil rally shows
More informationMarkets. Rates. Wednesday, 27 March 2019
Markets Rates, - - Policy Rates, - EURIBOR M / USD LIBOR M ECB FED BOE ECB Deposit EURIBORM USD LIBOR M Major central banks kept rates stable. The ECB and Fed however adjusted forward guidance, signalling
More informationCurrencies: Dollar to maintain benefit of the doubt going into the Fed meeting
Rates: Equity sell-off eases, but sentiment remains fragile Global core bonds gained ground on Friday as fear of a global slowdown overshadowed ongoing progress in US-Sino trade talks and strong US data.
More informationHeadlines. Monday, 14 May Rates: Sideways trading ahead. Currencies: USD rally slows after modest US CPI. Calendar
Rates: Sideways trading ahead Last week s consolidation on core bond markets is expected to continue at the start of the trading week given the thin eco calendar. Central bankers are expected to confirm
More informationHeadlines. Wednesday, 28 February Rates: Hawkish Fed Powell triggers sell-off in US Treasuries
Rates: Hawkish Fed Powell triggers sell-off in US Treasuries US Treasuries sold off yesterday with the belly of the curve underperforming after Fed chair Powell said that his personal economic outlook
More informationCurrencies: Euro remains in the defensive, but losses remain modest
Rates: Italian credit spread returns above 300 bps Risk sentiment on stock markets and developments in Italy will probably remain today s main trading themes. Main EMU equity indices are sliding towards
More informationRates: Interesting eco calendar probably lost market-moving potential
Rates: Interesting eco calendar probably lost market-moving potential The post-fed rally continued yesterday on core bond markets with more outperformance of US Treasuries. The German 10- yr yield hit
More informationCurrencies: Dollar bottoms going into tomorrow s key US payrolls
Thursday, 04 January 2018 Rates: Sentiment-driven trading ahead of payrolls? We expect trading to be subdued and sentiment-driven today ahead of tomorrow s US payrolls report. Ongoing strength on stock
More informationHeadlines. Wednesday, 09 January Rates: 2019 Fed rate cut no longer discounted. Currencies: EUR/USD holding within reach of 1.
Rates: 2019 Fed rate cut no longer discounted Core bonds lost more ground with US Treasuries underperforming German Bunds. Markets no longer discount a Fed rate cut this year. Positive risk sentiment,
More informationCurrencies: (Geo)political tensions still prevent further USD gains
Rates: Better to err on the safe side for now Risk barometers suggest a neutral start to today s trading session, but we think that geopolitical tensions still warrant to err on the safe side. We have
More informationCurrencies: dollar to maintain benefit of the doubt as trade tensions resurface?
Rates: US and German 10-yr yields at/approaching 1 st resistance The US 5-yr yield pierced through the upper bound of sideways trading range in place since June on Friday, while the US 10- yr and 30-yr
More informationThursday, 15 March 2018 Headlines Concerns over the prospect of a trade war with China weighed on WS yesterday, Asian stock markets trade mixed
Rates: Risk aversion puts support levels in yield at risk US politics-related risk aversion fills the eco/event void ahead of next week s FOMC meeting. Core bonds profit with the German 10-yr yield at
More informationHeadlines. Wednesday, 24 January Rates: More outperformance of US Note future vs Bund? Currencies: USD is fighting an uphill battle.
Wednesday, 24 January 2018 Rates: More outperformance of US Note future vs Bund? Short covering in an oversold US Treasury market started after US yields failed to pierce through key resistance levels
More informationTuesday, 13 March 2018 Headlines US stock markets parted ways yesterday Risk sentiment on Asian stock markets is mixed overnight
Rates: US CPI won t shift thinking about next week s FOMC Focus turns to US CPI today. We don t think that the outcome, even in case of a disappointment, will dramatically shift expectations about next
More informationRates: Chinese President reaches out to US to unlock trade conflict
Rates: Chinese President reaches out to US to unlock trade conflict Risk sentiment improved overnight after Chinese President XI Jinping called in favour of a more open Chinese economy and lowering import
More informationCurrencies: EUR/USD slide continues as doubts on EU economy continue to weigh
Rates: Stuck in no man s land Global core bonds are stuck in no man s land following last month s decision by both the ECB and the Fed to stay side-lined in assessment mode for the next months. More range-bound
More informationRates: US 10-yr yield breaks above 3.07%. Italian politics weighs on periphery
Rates: US 10-yr yield breaks above 3.07%. Italian politics weighs on periphery Italian political risk could keep peripheral bond markets under pressure at least until 5SM/Lega reach a coalition agreement
More informationHeadlines. Tuesday, 17 April Rates: Consolidation on core bond markets continues. Currencies: Dollar stays in the defensive.
Rates: Consolidation on core bond markets continues Risk sentiment and speeches by Fed governors will probably set the tone for today s trading session. Fed governors are expected to keep the scenario
More informationCurrencies: risk-rebound might support EUR/USD, at least temporary
Rates: Risk rebound and higher oil prices weigh on core bonds Core bonds sell off this morning as US President Trump and Chinese President Xi reached a 90-day trade truce to settle differences. Oil prices
More informationHeadlines. Friday, 23 February Rates: Consolidation ahead of the weekend? Currencies: USD rebound slows amid lack of data.
KBC Market Research Desk Havenlaan 2, 1080 Brussels Friday, 23 February 2018 Rates: Consolidation ahead of the weekend? Core bonds corrected somewhat higher yesterday. A thin eco calendar, the end of the
More informationCurrencies: Dollar maintains benefit of the doubt ahead of Powell speech
Rates: Downward intraday bias for core bonds Improved risk sentiment might weigh on core bonds. Italian media suggest that the EC is willing to accept a 2% Italian deficit for next year. This seems negotiable
More informationHeadlines. Tuesday, 23 October Rates: Risk aversion to reign trading today? Currencies: dollar regains the benefit of the doubt.
Rates: Risk aversion to reign trading today? Asian stock market lose up to 2% overnight with risk aversion set to spill to European/US trading. Core bonds could profit with US Treasuries lagging German
More informationCurrencies: EUR/USD stabilizes, USD/JPY rebound on soft BOJ inflation outlook
Rates: Core bonds eyeing global risk sentiment Global core bonds gained ground yesterday as ongoing growth concerns and fading positivism about US-Sino trade talks put a halt to the risk rally of late.
More informationCurrencies: Forceful equity rally fails to give clear guidance for USD trading
Rates: Core bonds remain stoic given stock market volatility Wednesday, 17 October 2018 US equities rallied more than 2%, but core bonds remained as stoic as during last week s sell-off. Eco data explains
More informationCurrencies: Dollar probably needs excellent payrolls to extend rebound
Rates: Payrolls strong enough to overrule Fed? Core bonds proved to be more resilient of late as the ECB and Fed respectively signaled no haste to start the normalization process and to step up the gradual
More informationRates: Huge sell-off on US stock markets triggers short squeeze in bonds
Tuesday, 06 February 2018 Rates: Huge sell-off on US stock markets triggers short squeeze in bonds The sell-off on US stock markets accelerated yesterday evening (-4% and more) and caused a huge short
More informationHeadlines. Monday, 03 September Rates: Risk sentiment will set the tone in absence of US investors
Rates: Risk sentiment will set the tone in absence of US investors US markets are closed for Labour Day, suggesting low volume trading especially given the thin calendar. Development in emerging markets
More informationRates: US stock market swoon triggers test of 2.8% support in US 10-yr yield
Rates: US stock market swoon triggers test of 2.8% support in US 10-yr yield A heavy sell-off in US tech shares pulled general stock markets lowers and lifted core bonds via safe have flows. US Treasuries
More informationHeadlines. Wednesday, 14 March Rates: US political uncertainty takes the upper hand. Currencies: US political noise weighs on the dollar
Rates: US political uncertainty takes the upper hand The bar to beat today s US eco data isn t that high. However, we don t think that investors are willing to set up big new short positions in core bonds
More informationCurrencies: Sterling rallies ahead of key meeting between EU s Juncker an UK PM May
Rates: More clarity in FOMC Minutes? Investors will be looking for more clues about future Fed policy in Minutes of the January meeting. Consensus is building that the Fed will adjust the balance sheet
More informationRates: Core bonds rather resilient despite improvement risk sentiment
Rates: Core bonds rather resilient despite improvement risk sentiment Friday, 13 July 2018 Core bonds oscillated near opening levels yesterday despite US CPI (2.9% Y/Y), a further improvement in risk sentiment
More informationCurrencies: How long will USD maintain the benefit of the doubt?
Rates: Looking for new clues Technically-inspired and sentiment-driven trading characterizes core bond moves the past days. The thin eco/event calendar today and tomorrow, suggests more of the same. Italian
More informationHeadlines. Tuesday, 27 February Rates: Powell to confirm Fed s path to policy normalization
KBC Market Research Desk Havenlaan 2, 1080 Brussels Rates: Powell to confirm Fed s path to policy normalization Over the previous days, core bonds staged a cautious technical rebound as investors were
More informationHeadlines. Friday, 17 November Rates: Cautiousness ahead of the weekend? Currencies: Dollar fails to extend rebound. Calendar.
Internal Rates: Cautiousness ahead of the weekend? US Treasuries outperform this morning as US political risk showed another dimension. Risk sentiment will to continue to play a key role today. The proof
More informationHeadlines. Friday, 12 January Rates: Hawkish ECB Minutes are bearish for Bunds. Currencies: EUR/USD nears again range top.
Rates: Hawkish ECB Minutes are bearish for Bunds Hawkish ECB Minutes surprised markets yesterday. They suggest changes to the ECB s forward guidance early this year. The German 10-yr yield is heading for
More informationHeadlines. Tuesday, 05 March Rates: First 10y Greek bond sale in almost a decade. Currencies: EUR/USD correction off 1.14 resistance continues
Rates: First 10y Greek bond sale in almost a decade Yesterday s market correlations were very loose amid an empty eco/event calendar. The US non-manufacturing ISM spices trading today. We expect a strong,
More informationsrates: More outperformance of German Bunds vs US Treasuries? Currencies: US-Canada trade deal to support further USD gains against other majors?
srates: More outperformance of German Bunds vs US Treasuries? The US, Mexico and Canada reached a last-minute agreement to revamp NAFTA. US equity futures gain ground, while the US Note future is a tad
More informationHeadlines. Friday, 18 January Rates: Eco data vs risk sentiment. Currencies: dollar shows mixed picture. EUR/USD to bottom out?
Rates: Eco data vs risk sentiment A WSJ article suggested that the US pondered dropping Chinese tariffs. Risk sentiment improved, even if the headlines were later denied by a US Treasury official. Downside
More informationCurrencies: Dollar struggles as markets await Powell s hearing before Congress
KBC Market Research Desk Havenlaan 2, 1080 Brussels Rates: Consolidation ahead of Powell s testimony? Sentiment on core bond markets turned more neutral last week, especially in Europe. The Bund approaches
More informationRates: Core bond sell-off to slow with key yield resistance levels looming?
Rates: Core bond sell-off to slow with key yield resistance levels looming? US investors return from the long weekend, but they don t have much catching up to do. Only hawkish comments from ECB Hansson
More informationHeadlines. Wednesday, 07 March Rates: Cohn s resignation vs hawkish comments by Fed Brainard
KBC Market Research Desk Havenlaan 2, 1080 Brussels Wednesday, 07 March 2018 Rates: Cohn s resignation vs hawkish comments by Fed Brainard The US Note future gapped open higher overnight on White House
More informationRates: Worst case scenario avoided short term, but medium term risks increase
Rates: Worst case scenario avoided short term, but medium term risks increase Risk sentiment improved overnight with the US/North Korean Summit back alive and the worst case short term scenario avoided
More informationHeadlines. Wednesday, 26 September Rates: Will the Fed s 2021 dot signal the end of the cycle? Currencies: will Fed convince USD bulls?
Rates: Will the Fed s 2021 dot signal the end of the cycle? The German 10-yr yield cleared the 0.5% mark. A sustained break in the weekly close opens a new trading band (0.5%-0.8%). US yields remain at/near
More informationMarkets. Rates. Wednesday, 10 January 2018
Wednesday, January 8 Markets Rates,, -, - Policy Rates,7,,,7,, -, -, EURIBOR M / USD LIBOR M ECB FED BOE ECB Deposit EURIBORM USD LIBOR M The Fed raised its policy rate by bps to.-.% in December and confirmed
More informationHeadlines. Tuesday, 02 October Rates: Risk aversion to dominate trading? Currencies: Italy-EMU budget dispute weighs on euro.
Rates: Risk aversion to dominate trading? Italian FM Tria returned from yesterday s Eurogroup with work to do on the country s draft budget proposal which is unacceptable to Europe. Italian populist party
More informationCurrencies: Will payrolls be able to provide any guidance for USD trading
Rates: Developments on trade scene trump US payrolls Development on the US trade scene could underpin demand for core bonds going into the weekend and overshadow today s payrolls report. US President Trump
More informationCurrencies: Slightly positive yet fragile risk environment to support euro?
Rates: Risk sentiment remains very fragile Market tensions finally eased somewhat on bond markets yesterday, but this morning Asian trading shows that risk sentiment is still very fragile. ECB and Fed
More informationRates: Gradually moving towards upper bound of sideways ranges
Rates: Gradually moving towards upper bound of sideways ranges Thursday, 30 August 2018 The US and German 10-yr yields continue their journey higher within established sideways trading ranges, respectively
More informationCurrencies: Dollar struggles to extend gains even as core yields rise
Rates: Test of US 10-yr yield resistance ongoing Today s eco calendar contains German Ifo and US durable goods orders. We expect their impact to be of intraday importance at best ahead of tomorrow s ECB
More informationHeadlines. Wednesday, 13 December Rates: Corrective steepening, even if Fed holds scenario? Currencies: Fed to solidify USD downside protection
Wednesday, 13 December 2017 Rates: Corrective steepening, even if Fed holds scenario? We expect the US central bank to continue its tightening cycle and keep a more hawkish tone with (small) upside risks
More informationMarkets. Rates. Wednesday, 08 November 2017
Wednesday, 8 November 7 Markets Rates,, -, Policy Rates,,,7,, -, -, EURIBOR M / USD LIBOR M ECB FED BOE ECB Deposit EURIBORM USD LIBOR M The ECB, the Fed and the BOJ left rates unchanged as expected. The
More informationCurrencies: Sentiment data (ZEW) to ease euro downside pressure?
Rates: Looking for clues from the ECB US investors return after the long weekend, but the US eco calendar is razor-thin. EMU investors look for signs of improvement in the forward-looking German ZEW expectations
More informationCurrencies: Will payrolls give a clear enough signal for a directional USDD move?
Rates: US 10-yr yield retests lost support US payrolls are expected to rebound following a dismal February figure. This week s US eco data managed to ease global growth worries somewhat with the US 10-yr
More informationHeadlines. Friday, 24 November Rates: Range bound trading going into the weekend? Currencies: EUR/USD holds within reach of 1.
Rates: Range bound trading going into the weekend? Traded volumes are expected to remain low today with US trading desks thinly staffed on Black Friday. A strong German IFO and progress in German formation
More informationHeadlines. Monday, 13 November Rates: Side-lined ahead of central bankers and US eco data?
Rates: Side-lined ahead of central bankers and US eco data? Today s eco calendar remains uninspiring. We expect trading to be sentiment-driven and technical in nature. The downward equity correction hasn
More informationHeadlines. Tuesday, 04 July Rates: Geopolitical tensions to give bonds some respite? Currencies: Risk-off to set the tone for FX trading?
Rates: Geopolitical tensions to give bonds some respite? Strong US ISM aborted a sluggish corrective upturn during the US session with US Treasuries now underperforming Bunds. Geopolitical tensions may
More informationHeadlines. Wednesday, 13 September Rates: Can US eco data start a 2nd downleg in US T s this week?
Rates: Can US eco data start a 2nd downleg in US T s this week? Core bonds corrected lower since Friday afternoon as risk sentiment improved with new closing highs for main US equity indices. Technically,
More informationHeadlines. Friday, 07 December Rates: Will calm return to (interest rate) markets?
Rates: Will calm return to (interest rate) markets? European equity markets had their worst performing day since the Brexit referendum in June 2016. Risk-aversion supported core bonds, pushing yields below
More informationRates: Inconclusive, low-volume trading as higher oil prices are ignored
Tuesday, 12 December 2017 Rates: Inconclusive, low-volume trading as higher oil prices are ignored A surge in oil prices has limited impact on other markets so far. Ahead of tomorrow s Fed meeting and
More informationMarkets. Rates. Wednesday, 12 September 2018
Markets Wednesday, September 8 Rates,,, -, - Policy Rates,,, -, EURIBOR M / USD LIBOR M ECB FED BOE ECB Deposit EURIBORM USD LIBOR M At the latest meetings, both the Fed and ECB held rates stable. The
More informationHeadlines. Friday, 24 February Rates: Core bond sentiment remains positive. Currencies: USD softens as markets ponder fiscal stimulus.
Rates: Core bond sentiment remains positive Core bond trading will remain sentiment-driven and technical in nature. End-of-month buying could come into play. The US Note future might be gearing up for
More informationCurrencies: dollar losing marginally ground as Fed rate hike expectations ease further
Rates: More consolidation ahead? Yesterday, core bonds couldn t really gain on weak US eco data, suggesting that sentiment is still fragile even as chances on a September rate hike fell to below 20%. Today
More informationCurrencies: Euro in pole-position. Will US data be strong enough to save the dollar?
Wednesday, 15 November 2017 Rates: Positive bias core bonds European stock markets remain fragile and oil prices could be prone to a more pronounced downward correction. Both are supportive for core bonds
More informationRates: Have bond markets reached some kind of ST exhaustion move?
Rates: Have bond markets reached some kind of ST exhaustion move? Bond markets faced a sharp repositioning yesterday as investors adapted investments to the latest developments in Italy. German and US
More informationHeadlines. Monday, 11 February Rates: Event risk looms large. Currencies: Dollar continues challenging recent ST high.
Rates: Event risk looms large The German 10-yr yields break below 0.15%, suggests a further slide towards 0% or lower. Risk sentiment will be reliable for today s intraday gyrations amid an empty eco/event
More informationCurrencies: Dollar struggles, but EUR/USD doesn t set new correction top
Monday, 17 July 2017 Rates: Wait-and-see ahead of Thursday s ECB? Today s thin eco calendar probably won t impact trading. Q2 earnings reports could influence markets via risk sentiment. Overall, we expect
More informationMarkets. Rates. Tuesday, 16 October 2018
Markets Tuesday, 6 October 8 Rates,,, -, - Policy Rates,,, -, EURIBOR M / USD LIBOR M ECB FED BOE ECB Deposit EURIBORM USD LIBOR M At its September meeting, the Fed raised rates with bps, dropped the reference
More informationHeadlines. Thursday, 19 October Rates: Shun Catalan political risk. Currencies: EUR/USD resilient despite Catalan uncertainty.
Rates: Shun Catalan political risk Eco data and central bankers won t impact trading today. The Catalan-Madrid stand-off could escalate to a new phase. Cautiousness might be warranted. The Bund might profit
More informationCurrencies: USD in consolidation modus ahead of ECB and Payrolls
Rates: ADP employment more important than usual? US yield resistances remain under severe test (2y: 1.3%, 5y: 2%; 10y 2.55%; 30y 3.13%), with even small breaks at the front end of the curve, suggesting
More informationBrent oil is holding under $45/ barrel after yet another decline during US trading hours yesterday.
Thursday, 22 June 2017 Rates: Core bonds remain resilient, partly because of oil sell-off Risk sentiment and oil prices could guide global trading. Core bonds can profit in a daily perspective if oil extends
More informationHeadlines. Tuesday, 03 January Rates: Can stronger ISM already trigger new selling pressure?
Rates: Can stronger ISM already trigger new selling pressure? The first real trading session of the year features the US manufacturing ISM and German inflation data. Risks for the ISM are on the upside
More informationRates: Upward bias US Treasuries, outperforming German Bunds?
Wednesday, 03 May 2017 Rates: Upward bias US Treasuries, outperforming German Bunds? Risks for US eco data are on the downside of expectations. Overnight future trading suggests that US equity markets
More informationHeadlines. Monday, 09 April Rates: Consolidation ahead? Currencies: Soft US payrolls block tentative USD rebound. Calendar
Rates: Consolidation ahead? Risk sentiment improved overnight as US officials softened trade rhetoric again after last week s hawkish opening bets. More signs of North Korean willingness to de-nuclearize
More informationCurrencies: ECB and Comey hearing to decide on nest USD move?
Rates: Downward potential Bunds on ECB meeting? Bunds gained significant ground in the run-up to today s ECB meeting, suggesting that the market reaction could be asymmetric with lower Bunds (higher rates)
More informationMarkets. Rates. Wednesday, 13 September 2017
Wednesday, September 7 Markets Rates,, -, Policy Rates,,,8,6,, -, -, EURIBOR M / USD LIBOR M ECB FED BOE ECB Deposit EURIBORM USD LIBOR M The ECB delayed decisions on its APP to October. Sources suggested
More information