Bottom-line: 잭슨홀의 매는 중앙은행이 금리인상을 곧 멈출 것이란 기대를 완전히 잡아먹지 못한 것 같음. 완화적 정책 기대감은 사라졌지만, 파월의 연설 전에 대부분 일어난 일이며 이후의 추가적 움직임은 강하지 않기 때문임.
Jackson Hole Hawkishness Fails to Completely Quash Pivot Bets. The fallout of Jerome Powell’s hawkish Jackson Hole speech continues to ripple through financial markets with the surprising exception of Eurodollar bets on rate cuts next year. While expectations for monetary easing have clearly been pared, all of the damage was done before the Fed Chair spoke. On Monday last week, a gauge of implied rate moves had wiped out all bets of a cut in the first half of 2023, but they have edged back by a couple of basis points since, and were unaffected by the speech itself. The same pattern can be seen in predictions for the second half where market pricing for around 35 basis points of cuts has been pretty steady for a week and a half now. That’s even as Treasury yields climbed in the aftermath of Powell’s unequivocally hawkish remarks.
Jackson Hole Hawkishness Fails to Completely Quash Pivot Bets. The fallout of Jerome Powell’s hawkish Jackson Hole speech continues to ripple through financial markets with the surprising exception of Eurodollar bets on rate cuts next year. While expectations for monetary easing have clearly been pared, all of the damage was done before the Fed Chair spoke. On Monday last week, a gauge of implied rate moves had wiped out all bets of a cut in the first half of 2023, but they have edged back by a couple of basis points since, and were unaffected by the speech itself. The same pattern can be seen in predictions for the second half where market pricing for around 35 basis points of cuts has been pretty steady for a week and a half now. That’s even as Treasury yields climbed in the aftermath of Powell’s unequivocally hawkish remarks.
Bottom-line: 하지만 채권 시장은 연옥에 가까워지고 있음.
Bonds are sliding toward the first bear market in a generation, burning investors who erred in bets that central banks would pivot away from rapid interest-rate hikes. The Bloomberg Global Aggregate Index, which tracks total returns from investment-grade government and corporate bonds, is within a percentage point of falling 20% from its peak after another bout of selling following the Federal Reserve’s Jackson Hole symposium.
Bonds are sliding toward the first bear market in a generation, burning investors who erred in bets that central banks would pivot away from rapid interest-rate hikes. The Bloomberg Global Aggregate Index, which tracks total returns from investment-grade government and corporate bonds, is within a percentage point of falling 20% from its peak after another bout of selling following the Federal Reserve’s Jackson Hole symposium.
Bottom-line: 중앙은행이 가파른 금리인상 기조를 되돌릴 것이란 잘못 된 기대로 저점 대비 13% 상승한 세계주가지수, 전략가는 이러한 기대가 더 이상 유효하지 않고 당분간 낮은 성장, 높은 물가, 침체 위험 속에 고통스러운 시간을 보낼 수 있기 때문에 주식비중 축소를 권고함.
Credit Suisse Group AG recommended investors to go underweight global equities following the Jackson Hole symposium, where central bankers doubled down on their bid to tame inflation through higher interest rates. The argument for an early dovish pivot by the Federal Reserve and other major central banks is now “clearly out of the window,” Michael Strobaek, global chief investment officer at the European bank, wrote in a note on Monday. Markets are now confronted with slowing growth, rising recession risks and elevated inflation, and “the next few months are thus likely going to be painful,” he said. Stock traders worldwide had wrongly bet the Fed may signal a slowdown in its tightening at Jackson Hole, leading to a 13% rally in the MSCI World Index from its trough to peak between June and August. Global stocks saw intense two-day selloff as Chair Jerome Powell on Friday erased any lingering hopes of an early shift to looser monetary policy.
Credit Suisse Group AG recommended investors to go underweight global equities following the Jackson Hole symposium, where central bankers doubled down on their bid to tame inflation through higher interest rates. The argument for an early dovish pivot by the Federal Reserve and other major central banks is now “clearly out of the window,” Michael Strobaek, global chief investment officer at the European bank, wrote in a note on Monday. Markets are now confronted with slowing growth, rising recession risks and elevated inflation, and “the next few months are thus likely going to be painful,” he said. Stock traders worldwide had wrongly bet the Fed may signal a slowdown in its tightening at Jackson Hole, leading to a 13% rally in the MSCI World Index from its trough to peak between June and August. Global stocks saw intense two-day selloff as Chair Jerome Powell on Friday erased any lingering hopes of an early shift to looser monetary policy.
Bottom-line: 인플레이션과 에너지 부족으로 고통 받는 유럽의 신뢰지수는 18개월래 최저치로 떨어짐.
Euro-Area Confidence Dips to 19-Month Low as Recession Nears. Euro-area economic confidence dropped to its lowest level in 1 1/2 years as inflation breaks record after record and limited energy supplies push the region closer to a recession. A gauge from the European Commission fell to 97.6 in August from 99 the previous month, data Tuesday showed. Analysts surveyed by Bloomberg had expected a decline to 98.
Euro-Area Confidence Dips to 19-Month Low as Recession Nears. Euro-area economic confidence dropped to its lowest level in 1 1/2 years as inflation breaks record after record and limited energy supplies push the region closer to a recession. A gauge from the European Commission fell to 97.6 in August from 99 the previous month, data Tuesday showed. Analysts surveyed by Bloomberg had expected a decline to 98.
The Chinese Communist Party’s twice-a-decade leadership congress will begin on Oct. 16, state media said, bringing President Xi Jinping a step closer to an unprecedented third term in power.
Bottom-line: 잭슨홀 이후 주식시장의 큰 폭 하락에 만족했던 연준 인사에 투자자들도 마찬가지로 동의한 것 같지 않은데, 중앙은행의 심각함을 투자자들은 이해하지 못했다고 할 수 있음.
The question is whether investors agree with Kashkari, who was “happy” to see Friday’s rout. So far there’s few signs of panic. If equity investors still haven’t fully have grasped the Fed’s seriousness - and especially if data suggest a slowdown, then more downside is in play.
The question is whether investors agree with Kashkari, who was “happy” to see Friday’s rout. So far there’s few signs of panic. If equity investors still haven’t fully have grasped the Fed’s seriousness - and especially if data suggest a slowdown, then more downside is in play.
Stocks Slip With News of Warning Shots at Chinese Drone. TAIWAN’S MILITARY FIRED WARNING SHOTS AT CHINESE DRONE.
Bottom-line: 어머?!
Oh my. If there is a slacking in labor demand, it isn’t evident from the JOLTS data, which surprisingly posted job openings of 11.239 million, roughly 850k more than expected! The prior month’s data was also revised significantly higher, and the jobs per unemployed metric has risen from 1.87 to 1.98 -- nearly back to the cyclical peak.
Oh my. If there is a slacking in labor demand, it isn’t evident from the JOLTS data, which surprisingly posted job openings of 11.239 million, roughly 850k more than expected! The prior month’s data was also revised significantly higher, and the jobs per unemployed metric has risen from 1.87 to 1.98 -- nearly back to the cyclical peak.
US stocks tumbled for a third day after unexpectedly positive data underpinned Fed intentions to keep tightening. All three major indexes lost around 1%. Treasuries slumped, pushing 2-year yields up more than 3 bps to 3.46%, as swaps showed the odds of a 75-bp hike in September above 70%.
Bottom-line: 러프에서 공을 칠 때서야 핸디가 드러나는 법, 중앙은행의 금리인상 선회 기대로 편안한 상승을 즐겼다면, 이제는 다른 이야기에 귀를 기울여야 할 것임.
It’s easy to be an optimist when sailing is smooth. The real test comes when things get rough. That’s where true-believer bulls find themselves as momentum reverses in equity markets, with pro-stock arguments based on everything from valuations to financial conditions suddenly in question as Federal Reserve hawkishness revives. Early returns aren’t great. The S&P 500 is down 5% in three days. Worried investors are wondering the same thing: Is this the start of the real crash, or will the things that put a floor under the last one keep the new selloff from snowballing? Charts and valuation tables are being dusted off for guidance on whether the levels of mid-June in equities can hold as the low point of the 2022 market. “It really stems on what you thought the driver was of the rally. So if your belief that the rally was 100% predicated on a Fed pivot, then of course you think you’ll have to change gears and the market’s heading to new lows,” Art Hogan, chief market strategist at B. Riley, said in a phone call. “And if I believed the catalysts had nothing to do with the narrative around a pivot, then I feel convinced that we’ve seen the lows for the year.”
It’s easy to be an optimist when sailing is smooth. The real test comes when things get rough. That’s where true-believer bulls find themselves as momentum reverses in equity markets, with pro-stock arguments based on everything from valuations to financial conditions suddenly in question as Federal Reserve hawkishness revives. Early returns aren’t great. The S&P 500 is down 5% in three days. Worried investors are wondering the same thing: Is this the start of the real crash, or will the things that put a floor under the last one keep the new selloff from snowballing? Charts and valuation tables are being dusted off for guidance on whether the levels of mid-June in equities can hold as the low point of the 2022 market. “It really stems on what you thought the driver was of the rally. So if your belief that the rally was 100% predicated on a Fed pivot, then of course you think you’ll have to change gears and the market’s heading to new lows,” Art Hogan, chief market strategist at B. Riley, said in a phone call. “And if I believed the catalysts had nothing to do with the narrative around a pivot, then I feel convinced that we’ve seen the lows for the year.”
Bottom-line: 에너지 대란 속에서도 지멘스에 대한 강한 수요를 보면 회사채 시장에서 거래의 판단 기준이 다시 질적은 측면으로 이동했음을 알 수 있음. 이런 현상은 중앙은행의 강한 긴축 의지 확인 뒤 심화되었음.
Strong order books for Siemens’ bond issue -- despite the backdrop of a developing energy crisis -- show that the gravitational pull toward quality is becoming apparent again as credit’s summer rally rapidly loses steam. Europe’s corporate bonds have lost almost all of the summer gains as Fed Chair Jerome Powell made the case for a decisive fight against persistent inflation and markets brace for the possibility of a 75bps hike by the ECB next week. Against this backdrop, trades that proliferated during the first half’s selloff are set to return in earnest and one of them is the focus on quality by preferring single-A bonds over triple-B counterparts. This kind of bonds has the potential to become credit investors’ holy grail again as central bank tightening angst dominates markets.
Strong order books for Siemens’ bond issue -- despite the backdrop of a developing energy crisis -- show that the gravitational pull toward quality is becoming apparent again as credit’s summer rally rapidly loses steam. Europe’s corporate bonds have lost almost all of the summer gains as Fed Chair Jerome Powell made the case for a decisive fight against persistent inflation and markets brace for the possibility of a 75bps hike by the ECB next week. Against this backdrop, trades that proliferated during the first half’s selloff are set to return in earnest and one of them is the focus on quality by preferring single-A bonds over triple-B counterparts. This kind of bonds has the potential to become credit investors’ holy grail again as central bank tightening angst dominates markets.
Bottom-line: 성장률 하락이 두려워 중앙은행이 정책 선회를 할 것이라 기대하겠지만, 실제 이들은 성장률을 잠재성장률 아래로 떨어지게 만들고 실업률을 높여 인플레이션을 잡길 원한다.
Forget about a soft landing. Jerome Powell is now aiming for a "growth recession" — a protracted period of meager growth and rising unemployment that stops short of an outright contraction. The Fed's goal is to "grind inflation down by slowing growth below its potential," which officials peg at 1.8%, KPMG Chief Economist Diane Swonk said.
Forget about a soft landing. Jerome Powell is now aiming for a "growth recession" — a protracted period of meager growth and rising unemployment that stops short of an outright contraction. The Fed's goal is to "grind inflation down by slowing growth below its potential," which officials peg at 1.8%, KPMG Chief Economist Diane Swonk said.