Archives

Notes from the Trading Desk – Europe

Despite the upturn in market sentiment, it is clear to us that the global economy is not yet through the woods with regards to avoiding a recession; hence, chatter around potential rate cuts isn’t necessarily all positive.

Notes from the Trading Desk – Europe

The October US Consumer Price Index reading decelerated at a faster-than-expected rate, fuelling hopes for a dovish pivot from the Federal Reserve. Market expectations are now pricing in a Fed rate cut by May or June 2024, with all eyes on the next Fed meeting on 13 December.

Notes from the Trading Desk – Europe

Some important inflation data points will dominate the narrative this week, with PPI and CPI prints from the United States, the United Kingdom and European Union.

Notes from the Trading Desk – Europe

It felt like Halloween came early for many stocks last week, but this week holds a number of potential drivers, with earnings season continuing a pace and several central bank decisions.

Notes from the Trading Desk – Europe

Heightened geopolitical tensions, higher oil prices and little relief for credit markets kept risk assets under pressure. Markets are closely watching events unfolding in Israel and Palestine, fearful that the war will engulf the broader Middle East.

Notes from the Trading Desk – Europe

The brutal escalation in geopolitical tensions in the Middle East was a flashpoint this weekend. The largest economic impact so far has been felt in the oil market, with Brent crude oil surging as investors assess the potential broader impact in the region.

Notes from the Trading Desk – Europe

Focus is on central bank announcements this week, which includes the Federal Reserve meeting on Wednesday, the Bank of England and Swiss National Bank on Thursday, followed by the Bank of Japan on Friday.

Notes from the Trading Desk – Europe

In terms of market drivers, investor focus is mainly on the upcoming European Central Bank Meeting (14 September) and the Federal Reserve meeting (20 September). Some stronger recent US macroeconomic data suggest the possibility of a more hawkish tilt there.

Notes from the Trading Desk – Europe

Equity markets ended August on a positive note, with Chinese stimulus aiding sentiment, along with global macro data releases that increased hopes central banks would pause their rate-hiking cycles.

Notes from the Trading Desk – Europe

This week, the Fed’s annual central banker conference at Jackson Hole, Wyoming (Thursday/Friday) should capture investor attention, along with earnings from tech giant Nvidia (Wednesday after the market close). With little Chinese macro data scheduled this week, the market should get some respite there.

Notes from the Trading Desk – Europe

This week, inflation is in focus with reports from the United Kingdom, Sweden, Japan, and a second reading of eurozone inflation in July. If core inflation remains elevated in the United Kingdom and Europe, the markets are likely to price in central bank rate hikes this fall.

Notes from the Trading Desk – Europe

As we head into August, risk assets face a series of headwinds. Equity market performance has been strong of late, and many investors may feel it’s time to take some profits.