Daily Comment

Daily Comment (August 15, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Equities are moving higher alongside oil as the outlook for a Fed rate hike has become more dovish.  The market-implied likelihood of a September hike fell to 18.0% this morning.  However, despite very short-term expectations falling, the probability of a hike has risen for next year. … Read More »

Daily Comment (August 12, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Eurozone economic growth came in on forecast, rising 1.6% annually.  While growth remains subdued, Q2 marked the 13th consecutive quarter of expansion.  German GDP came in better than expected, rising 3.1% annually compared to the 2.8% forecast.  At the same time, Italy’s growth disappointed, coming in… Read More »

Daily Comment (August 11, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] European stocks advanced this morning alongside oil after the International Energy Agency (IEA) said it expects the global oil market to improve.  In its monthly report, the agency said it expects increasing refining to draw down the ample crude stockpiles, despite some large OPEC producers pumping… Read More »

Daily Comment (August 10, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The dollar fell overnight as the market adjusted its expectations lower for a rate hike.  The market-implied probability of a Fed rate hike in September is 22%, and the likelihood reaches 52% in May 2017.  The yields on 10- and 30-year U.K. bonds fell to record… Read More »

Daily Comment (August 9, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It was another quiet overnight session.  Chinese inflation data (see below) was roughly in line with expectations.  U.S. equity futures are modestly higher this morning, and Treasuries are rallying a bit as well.  If anything, market action is consistent with late summer. However, there are a… Read More »

Daily Comment (August 8, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Equity markets continue to move higher across the globe as the dollar rises in the wake of Friday’s employment data.  We have seen two consecutive strong employment reports and this has raised expectations of tighter monetary policy.  As tightening expectations ramp up, the dollar is steadily… Read More »

Daily Comment (August 5, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The big news today is the employment report, which we will cover in detail below.  We do want to note that economic data from Germany and the U.K. were unusually weak and natural gas inventories recorded a rare August draw in stockpiles. There has been some… Read More »

Daily Comment (August 4, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The big news today is that the BOE cut rates 25 bps, to 0.25%, and clearly signaled a move to zero by year’s end.  It also increased QE by £60 bn and will include corporate bonds in its purchases.  This is the bank’s first rate cut… Read More »

Daily Comment (August 3, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] In the wake of the BOJ and Abe disappointment yesterday, we have been observing a steady backup of long duration yields.  So far, this isn’t anything too serious, but the market narrative behind it is important.  There is a growing concern that BOJ monetary policy may… Read More »

Daily Comment (August 2, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The big news overnight came from Japan as PM Abe’s cabinet approved the ¥28 trillion stimulus package.  Actual new spending is only about a quarter of the headline number.  The JPY appreciated on the news and the JGB saw a modest uptick in yields.  Overall, the… Read More »

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