The ECB on Thursday is expected to raise rates for the first time in more than a decade. The prospect that it could even hike by 50bps to zero is helping to spur a recovery in the euro, with many saying the ECB would be wise to show a determination to avoid falling further behind the curve on inflation. The difficulty for policy makers is that their own decisions could readily be outweighed by whatever Russia decides to do about natural gas supplies at a time when Europe and the UK are sanctioning it over the invasion of Ukraine. That threatens to over-write the normal central bank conundrum of balancing growth against inflation, because soaring energy prices are driving inflation up and growth down at the same time. Just take a look at the way copper, often regarded as a proxy for the global growth outlook, has come crashing down while the war in Ukraine sends gas prices spiking.

함의: 목요일 유럽중앙은행이 첫 금리인상을 단행할 것으로 예상되는 가운데, 물가와 성장의 균형을 맞추는 과제가 중앙은행이 무엇을 해도 통제 불가한 에너지 가격으로 인해 매우 어렵게 된 상황임.

The combination of persistently high inflation and slower growth has kept credit investors focused on two key questions: 1. How do corporate bond credit spreads behave during episodes of low growth and high inflation? and 2. What conditions need to be satisfied for risk appetite to recover and spreads to start moving tighter? Using data going back to the early 1970s, we identify four periods that fit a “low growth/high inflation” regime. In each of these episodes, the magnitude of the spread widening was not any more severe than during other challenging times for credit risk, outside of the Great Financial Crisis. Moreover, during these low growth/high inflation periods we find that growth, not inflation, provided the better signal for an inflection point in risk-sentiment. Specifically, credit spreads start to normalize and grind tighter after growth hits its trough, as opposed to when inflation passes its peak.

보고서: 회사채 투자자들 사이에 궁금점은 물가와 성장 어느 부분에 초점을 두는가인데, 분석에 의하면 위험선호심리와 신용스프레드 축소 모두 성장에 더 민감했고, 특히 스프레드의 경우 물가가 고점을 지날 때가 아니라 성장이 저점을 지날 때부터 회복되었음. (Goldman Sachs - Growth vs. inflation, What matters more for corporate credit?)

The Federal Reserve will need to go on a longer tightening cycle and raise interest rates well into next year to control inflation that Blackstone Group sees as “more deeply entrenched” in the US. “My own view is the Fed funds rate could exceed 4%. I think they could go above 4.5%, maybe even closer to 5%,” said Joseph Zidle, chief investment strategist in Blackstone’s Private Wealth Solutions group. Several indicators, such as shelter and wages, as well as the general capacity constraints in the US economy, are showing that inflation is running hotter, which will require a “bigger and longer” central bank response, said Zidle.

함의: 시장의 긴축 속도 조절 기대와 달리 인플레이션 통제를 위해 긴축 사이클은 내년까지, 정책금리는 최대 5%까지 인상할 수 있다고 봄.

UK inflation hit a new 40-year high in June, intensifying the cost of living crisis and heaping pressure on the Bank of England to deliver an aggressive interest-rate increase next month. Consumer prices rose 9.4% from a year earlier, the biggest increase since February 1982, the Office for National Statistics said Wednesday. The acceleration from 9.1% in May was driven by a 9.3% surge in the price of motor fuel over the month. 

함의: 기록적 물가의 연속임.

European semiconductor stocks will likely be in focus today as chip tool maker ASML slashed its full-year forecast as a decision to delay testing its machines to speed up deliveries continues to hit earnings. ASML now expects sales to rise 10% in the year compared with its earlier forecast of 20% growth. Technology stocks are down ~29% this year in Europe, making them the worst performing sector in the region this year.

함의: ASML은 올해 매출 증가율 전망을 당초 20%에서 10%로 낮춤.

Bernstein Disagrees With BofA That Stocks Have Seen Capitulation. Stock markets are yet to see full capitulation, Sanford C. Bernstein strategists said, taking a contrary view to that of Bank of America Corp., whose survey showed that investors have already thrown in the towel. “We have not yet seen capitulation in outflows from equity funds,” strategists Mark Diver and Sarah McCarthy wrote in a note on Wednesday. “In fact outflows, excluding Europe, have only just begun.”. The broker's short-term indicator of investor sentiment is neutral, though the longer-term gauge is at extreme pessimistic levels, which suggests further short-term downside before tactical capitulation is reached.

함의: 번스타인은 메릴린치의 완전한 항복 의견에 동의하지 않으며, 주식형 자금 유출은 이제 막 시작되었기에 항복 전의 하락이 남았다고 주장함.

“The fact that companies are showing a certain resilience to the current environment is reassuring market operators who have now started betting on a less aggressive monetary tightening than initially expected,” said Pierre Veyret, a technical analyst at ActivTrades. “Even if we’re not out of the woods yet, more and more traders now tend to believe the worst is behind for equity markets this year.”

함의: 결국 거래에 참여하는 사람들이 어떻게 생각하는지에 따라 가격은 움직임.

Who’s the Boss: Central Banks or Forward Guidance? As financial markets gird themselves for the first ECB rate hike since 2011, there are still plenty of uncertainties surrounding Thursday’s policy announcement. Will it be 25 bps or 50? The official forward guidance has steered expectations firmly toward a smaller move, but recent press leaks have opened the door for a larger rise in rates. Meanwhile, there have been a few teasers pertaining to the new anti-fragmentation tool, but it’s kind of hard to escape the notion that the ECB is making things up as they go along. Perhaps they ultimately would have been better served keeping quiet until they were ready to act. Indeed, that sentiment holds for pretty much the entirety of central bank policy-making these days, and forward guidance looks like a lot more trouble than it is worth. The very basic foundation of central bank forward guidance is that it is a volatility-suppressing device. By offering up a road map of intended or projected policy action, a monetary institution can significantly reduce uncertainty, allowing investors to anchor their expectations of the future policy landscape. The impact can be profound; for the decade after the Fed first introduced calendar-based forward guidance in 2011, the peak in short-term interest rate volatility wasn’t much above the nadir of the pre-guidance era.

함의: 포워드 가이던스의 역할이 최근 중앙은행의 신뢰상실과 함께 균열되고 있다고 봄.

The S&P 500 pared gains after a report that Google would pause hiring for two weeks. This comes after the company last week said it would decelerate its recruiting efforts. The news coincided with the TICK Index falling to session lows as the largest sell programs of the day rolled through.

함의: 구글이 2주간 고용을 중단하겠다 발표하며 매도가 쏟아졌고, 상승 중이던 지수가 방향을 전환함.

Microsoft Corp. is eliminating many open job listings, including in its Azure cloud business and its security software unit, as the economy continues to weaken. The hiring freezes will continue for the foreseeable future, Microsoft said, while declining to comment further on which departments and businesses are impacted. The company said it is honoring job offers that have already been made for open roles, and will make some exceptions for critical roles. It’s an expansion of a hiring slowdown disclosed in May, which mostly affected its Windows, Office and Teams groups. 

함의: 마이크로소프트가 경기악화를 이유로 구인을 중단하겠다고 한 부문이 공개됨.

"Though we see the same world, we see it through different eyes."

- Virginia Woolf

Tesla Inc. Chief Executive Officer Elon Musk said the electric-vehicle manufacturer has been through “supply chain hell,” but sees commodities prices trending lower and signaled optimism the company can achieve record volume over the rest of the year. The remarks came after the EV market leader reported second-quarter earnings that beat Wall Street estimates, reflecting Tesla’s progress in getting production back on track while tackling supply-chain hurdles and Covid lockdowns at its factory in China. “We have potential for a record-breaking second half of the year,” Musk said Wednesday on a call with analysts, noting strong June production at the company’s factories in California and Shanghai. But he cautioned that the industry has faced severe challenges securing adequate supplies of parts and materials. “It’s kind of been supply chain hell for several years,” Musk said.

함의: 테슬라 실적 발표에서 하반기 높은 생산량을 기대한다한 기저에는 오랜 기간 발목을 잡았던 공급망 병목 해소가 있음.

With recession fears mounting—and inflation, the war in Ukraine and the lingering pandemic taking a toll—many tech companies are rethinking their staffing needs, with some of them instituting hiring freezes, rescinding offers and even starting layoffs. Microsoft Corp., Google and Lyft Inc. are some of the latest companies to pull back. Microsoft said Wednesday it was eliminating many job openings. Google is pausing hiring for the next two weeks, while Lyft is shutting down a division and trimming jobs. Here’s a look at the dozens of companies that are tapping the brakes. Alphabet Inc., Google’s parent company, has been decelerating its recruiting efforts. Amazon.com Inc. said in April that it was overstaffed after ramping up during the pandemic and needed to cut back. Apple Inc. is planning to slow hiring and spending at some divisions next year. Coinbase Global Inc., a cryptocurrency exchange, told employees it was cutting 18% of staff in June to prepare for an economic downturn. Lyft told employees it was reining in hiring in May after its stock dropped precipitously. Meta Platforms Inc., the parent of Facebook, slashed plans to hire engineers by at least 30%. Microsoft told workers in May that it was slowing down hiring in the Windows, Office and Teams groups as it braces for economic volatility. Robinhood Markets Inc., the online brokerage, terminated 9% of its workforce in April. Rivian Automotive Inc. is planning to cut hundreds of non-manufacturing jobs and teams with duplicate functions. Tesla Inc., the electric-vehicle maker, cut 200 autopilot workers as it closed a facility in San Mateo, California, in June.

함의: 고용의 급격한 냉각을 보여주는 리스트.

President Joe Biden says he expects to speak to Chinese leader Xi Jinping “within the next 10 days,” as the US considers whether lifting some tariffs on Chinese imports would help stem rampant inflation. Already-tense relations between the two largest economies have deteriorated over China’s refusal to condemn Russia’s invasion of Ukraine. “I think I’ll be talking to President Xi within the next 10 days,” Biden said Wednesday, speaking to reporters after a trip to Massachusetts to discuss his climate agenda. “I expect to.”

함의: I think I’ll be, I expect...

The Bank of Japan left its rock-bottom interest rates unchanged Thursday as it put concern over the economy ahead of any potential implications for the yen for now, further cementing its outlier stance compared with inflation-fighting central banks overseas. Supporting its view that the sputtering economy needs continued support even as the impact of the pandemic softens, the BOJ lowered its economic growth forecast for this year. The downgrade follows lockdowns in China and a jump in Covid cases at home since the last quarterly projections. The global outlook has also darkened as inflation abroad fuels recession fears exacerbated by the continued war in Ukraine.

함의: 일본 중앙은행은 경제성장률 전망을 낮추며 지속적인 완화의 일환으로 현재 금리를 유지함.