Fed to let yields, inflation run; Bank of England to follow

Fresh records for Wall Street, a weaker US dollar, yields higher, volatility crushed: these were some of the outcomes from a dovish Federal Reserve yesterday as the US central bank resolutely stuck to its guns to let the economy run as hot as it needs to achieve full employment. European stocks moved higher in early trade Thursday but worries about vaccinations and Covid cases weigh. The FTSE 100 still cannot yet sustain a break north of 6,800 and is the laggard, declining a quarter of one percent this morning.  


Longer dated paper moved a lot as Powell said the Fed would look past inflation overshooting; US 10-year Treasury yields have shot about 10 bps higher today to above 1.72%, whilst 30s are at their highest in almost two years close to 2.5%. Spreads are at their highest in over 5 years. Stock markets liked it – the Dow Jones industrial average climbed 0.6% to close above 33,000 for the first time. The S&P 500 closed within 25pts of 4,000. The Vix fell under 20. 


Tracking the move in US Treasuries, gilt yields rose this morning as markets look to the Bank of England meeting to deliver the next dose of central bank action. It will leave interest rates on hold at 0.1% and the size of the asset purchase programme at £895bn. The success of the vaccine programme – albeit now running into some hurdles – has allowed the Bank to take a more optimistic view of the UK economy beyond Q1 2021. At its February meeting the Old Lady said the UK economy will recover quickly to pre-pandemic levels of output over the course of 2021. It expects spare capacity in the economy to be eliminated this year as the recovery picks up. All this really puts the negative rate conundrum on hold – the next move should be up, if not this year certainly next. Nevertheless, Andrew Bailey stressed earlier this week that the BoE is not concerned by rising yields or temporary inflation blips. So today it will be more about what the BoE doesn’t say. Remaining silent on the rise in bond yields could be the cue for sterling. 


What did we learn from the Fed and Jay Powell? Chiefly, the Fed is staying its hand and letting the economy run hot. In a nutshell the Fed said inflation will overshoot but not for long; yields are moving up as part of the cycle as growth improves; and it won’t stop until full employment is achieved along with inflation above 2%. The Fed’s dovishness on monetary policy was contrasted by sharp upgrades to growth and inflation forecasts this year – but the Fed is in a new outcome-based regime focused on absolute employment levels, not on the Philip’s Curve. It also doesn’t really think the sharp bounce back this year is sustainable, meaning now is not the time to remove the punchbowl.


Transient: Things like supply bottlenecks and base effects will only lead to a “transient” impact on inflation, according to the Fed. The Fed plans to maintain 0-0.25% until labour market conditions achieve maximum employment and inflation is on course to remain above 2% for a sustained period. A ‘transitory’ rise in inflation above 2% as is seen happening this year does not meet criteria to raise rates. This is where things get dicey vis-a-vis yields since inflation could get a bit big this spring which would pressure (the Fed is immune so far) for hikes sooner. I think also the Fed should be looking around a bit more about where there is clear inflationary pressures and have been for some time, like in asset prices.


Stick: It seems abundantly clear that Powell and the Fed see no need and feel no pressure to carry out any kind of yield curve control or Twist-like operation to keep a lid on long-end rates.  This is a steepener move and the market reaction was plain as we saw longer-end yields rise just as the yield on shorter-dated maturity paper declined at first. The 5s30s spread widened around 9bps to 1.66%, whilst 2s10s widened 7bps to 1.5%. 


Patient: Is it time to start talking about talking about tapering? “Not yet” came the reply. Which matches expectations – any talk of tapering will not be allowed until June at the soonest when the Fed will have a lot more real data to work with post-vaccinations. That will be things get harder for the Fed as inflation starts to hit. 


Outcome-based: Focus on ‘actual’ progress rather than ‘forecast’ progress. This tallies with what know already about the Fed taking a more outcome-based approach to its policy rather than relying on Philip’s Curve based forecasts. The Fed’s rear-view policymaking will let inflation loose. It also means the dots are kind of useless, but nonetheless the lack of movement on dots kept shorter dated yields on a leash, pushing real rates down. The question about what actually constitutes a material overshoot on inflation and for how long it needs to be sustained will be dealt with another day, with Powell admitting the Fed will have to quantify this at some stage. 


SLR: Powell kept his cards close to his chest and only said something will be announced on SLR in the coming days. This may involve some kind of soft landing for the exemption to lessen any potential volatility.


Long end yields moved higher with curve steepeners doing well. I expect bond yields and inflation expectations to continue to rise over the next quarter – the Fed remains behind the market but this time, crucially, it doesn’t mind. Whilst Powell said the Fed would be concerned by a persistent tightening in financial conditions that obstruct its goal, the difference this time is that stock market stability is not what the Fed is about these days. Post 2008, the Fed fretted about market fragility since that is what caused the recession. Now it’s comfortable with higher yields and won’t be concerned if the stock market is lower from time to time.


With the long end of the curve anchored by the Fed’s dovishness, and longer-end yields and inflation expectations moving up, this creates better conditions for gold to mount a fresh move higher, but it first needs to clear out the big $1,760 resistance. MACD bullish crossover on the daily chart below is encouraging for bulls.

Gold needs to clear out the big $1,760 resistance.

Fed quickfire: Dollar trashed, stocks jump

Stocks jumped to highs of the day before paring gains as they were cheered by what looks on to be a dovish Fed decision – critically it looks as though the Fed is happy to let the economy run really rather hot and won’t intervene. It’s truly remarkable that the Fed can say the economy will rebound by 6.5% this year and not change policy. Even with growth in excess of 3% in 2022 and 2% in 2023; it still sees no need to tighten policy. This reflects what we know already about the Fed’s view on employment and inflation, but it is no less remarkable for it. I would have expected more policymakers to move their dots in a bit, but the median plot did not move into 2023. Doves rule – there is not enough of majority yet seeing any need to act to raise rates. Over to Jay Powell.

  • No hikes through 2023. 4 from 1 see a hike in 2022, whilst 7 see a hike by 2023
  • Inflation is seen at or above 2% through 2023, including 2.4% this year, 2% in 2022 and 2.1% in 2023. This is perhaps a little light and if inflation starts to move significantly higher than this it will be a problem and yields could back up further. This is the primary risk now for the Fed as AIT lets inflation expectations become unanchored.
  • Boosts GDP forecast to 6.5% in 2021 from December’s projection of 4.2%, with expansion seen at 3.3% in 2022 and 2.2% in 2023.

The Fed boosts GDP forecast to 6.5% in 2021 from December’s projection of 4.2%

Initial market reaction showed a pop in stock markets – this may get cooled if the market thinks the Fed is losing its grip on inflation by letting the economy run so hot. The Dollar dropped sharply and has held the losses. Gold broke above $1.740. 10s trade more cautiously around 1.66%, still up over 4bps today.

The Dollar dropped sharply and has held the losses.

Dots: no shift in the median: 4 of 18 see a hike next year, 7 in 2023.

Dots: no shift in the median

December dot plot – just three moved into the 2023 camp.

December dot plot – just three moved into the 2023 camp.

الأسبوع المقبل: قرارات كبيرة للفيدرالي وبنك إنجلترا ومبيعات تجزئة الولايات المتحدة

تُتَّخذ هذا الأسبوع قرارات كبيرة محتملة بشأن معدل الفائدة على جانبي الأطلنطي، مع انعقاد اجتماعات بنك انجلترا والاحتياطي الفيدرالي الأمريكي. أيضًا سنلقي نظرة على التعافي الاقتصادي الأمريكي مع صدور بيانات مبيعات التجزئة. هل كان ارتفاع يناير مجرد صدفة أم أن النمو المستدام عاد إلى الحياة؟

قرار معدل الفائدة لبنك إنجلترا: لن يتغير على الأرجح لكن توقعات ما بعد الميزانية قد تغيرت

من المتوقع أن يحتل التضخم ومعدلات الفائدة الصدارة مرة أخرى مع كشف بنك إنجلترا أحدث قرارات سياسته النقدية هذا الأسبوع.

ما زال الهدف هو تضخم بنسبة 2%، وعلى الأرجح ستبقى معدل فائدة البنك التي تبلغ 0.1% قائمة. في آخر اجتماعات بنك انجلترا الهامة بشأن معدل الفائدة في شهر فبراير، صوت أعضاء لجنة السياسة النقدية بالإجماع على إبقاء ذلك.

قال المحافظ أندرو بايلي في حديثه في حدث لمؤسسة حل النزاعات يوم الجمعة 5 مارس، إن البنك لن يرفع معدلات الفائدة فيما يتعلق بالتعافي الاقتصادي السريع، وقال إنه سيتعين عليه رؤية «دليلًا حقيقيًا» على أن تضخمًا بنسبة 2% سيكون مستدامًا قبل تطبيق أي ارتفاع في معدلات الفائدة.

إلا أنه قال أيضًا إن بنك إنجلترا يستعد لمعدلات فائدة سالبة في حالة التعافي المخيب للآمال. وهو يمهد الطريق أيضًا ليكون مستعدًا في حالة أن يؤدي الإنفاق السريع الناتج عن جائحة كوفيد 19 إلى ضغط تضخمي متزايد.

لا تتوقع الأسواق سن معدلات فائدة سالبة في أي وقت قريب. بدلًا من هذا، من المتوقع أن يرفع البنك معدلات الفوائد في 2022، وفقًا لجريدة Financial Times.

لقد ضُبِطت التوقعات أيضًا لتتماشى مع ميزانية المستشار ريشي سوناك التي يدفعها التحفيز. وفق بايلي، فإنها تبدو أقوى، حيث ينبغي للميزانية الجديدة كثيفة الإنفاق أن تساعد على تحفيز الاقتصاد وسوق العمل، لتهبط بالبطالة دون مستوى 7.75% الذي سبق التنبؤ به.

قال بايلي، «آخر توقعاتنا كانت سابقة للميزانية»، مضيفًا أن التوقع القادم في مايو «سيكون لدينا عنده بطالة أقل حجمًا في المدى القريب، وأكثر انخفاضًا على الأرجح على طول المدى».

بصورة أساسية، سيتطلع بنك انجلترا إلى المستقبل كما يفعل دائمًا، لكن من غير المرجح أن يغير معدله الأساسي عن نسبة 0.1% الحالية عندما يعقد اجتماعه هذا الأسبوع.

المؤتمر الصحفي للجنة الفيدرالية للسوق المفتوحة – ثبات أم تغيير؟

على الجانب الآخر من المحيط ينعقد اجتماع اللجنة الفيدرالية للسوق المفتوحة. إنها نفس قصة اجتماع بنك انجلترا إلى حد كبير، لكن مع بعض التغيير، الذي يمكن أن يحدث حرفيًا.

كان رئيس مجلس المحافظين للفيدرالي جاي بويل متفائلًا بشأن العوائد، وتعهد في الأسبوع الماضي بإبقاء السياسة مستقرة، بالرغم من تحفيز تعليقاته بيع تصفية لدين الخزانة طويل الأجل.

قال بويل إنه من المتوقع أن يكون البنك المركزي «صبورًا» في سحب الدعم من أجل التعافي، نظرًا لأن سوق العمل بقي بعيدًا عن هدف التوظيف الكامل الذي يهدف البنك المركزي إليه، والذي حقق تقدمًا طفيفًا في الأشهر الأخيرة.

ما الذي يعنيه هذا قبل اجتماع اللجنة الفيدرالية للسوق المفتوحة؟ تشير CNBC إلى إمكانية إجراء بعض التعديلات الفنية على سياسة الفيدرالي النقدية القائمة، ويحفز ذلك الاضطراب الحادث مؤخرًا في سوق السندات.

أحدها قد يكون إعادة تقديم «عملية تغيير السير»، التي يبيع فيها الفيدرالي السندات قصيرة الأجل ويشتري سندات ذات أجل أطول. الهدف هو دفع المعدلات ذات المدى الأقصر إلى أعلى مع دفع المعدلات ذات المدى الأطول إلى أسفل، وبالتالي تسطح منحنى العائد. لقد نفذ الفيدرالي هذا التكتيك لآخر مرة منذ عقد أثناء أزمة الدين الأوروبي العاصفة.

هناك خيار آخر قد يستكشفه الفيدرالي، وهو زيادة المعدلات المدفوعة على الاحتياطيات لتغطية مشاكل أسواق المال، أثناء ضبط معدل الفائدة الليلة الواحدة على عمليات إعادة الشراء في سوق السندات أيضًا.

صارت توقعات الاقتصاد الأمريكي أكثر إشراقًا بعض الشيء مع تباطؤ الإصابات بكوفيد، وزيادة تعميم اللقاح، واعتماد مجلس الشيوخ باقة الرئيس جو بايدن التحفيزية. وأظهرت الرواتب غير الزراعية زيادة صحية للغاية في الوظائف المضافة إلى الاقتصاد الأمريكي في الشهر الماضي، حيث ارتفعت بمقدار 379،000 وظيفة.

لكن سيتعين معالجة عوائد السندات، خاصة مع حاجة الخزانة الأمريكية إلى سير مزاديات سنداتها القادمة بصورة جيدة. سيستمر الفيدرالي على الأرجح في شراء أوراق خزانته المالية التي تساوي 80 مليار دولار، مستخدمًا إياها في شراء سندات بمدة أربع سنوات ونصف، بحسب CNBC، ببساطة لأن هناك إمداد كبير من تحفيز إضافي على وشك الوصول، وسيحتاج إلى رفع رأس المال للتعامل مع عجز محتمل يبلغ 2.3 مليار دولار.

وبينما لا نتوقع حدوث تغيير كبير، يمكن أن نرى تلك التعديلات الفنية المذكورة أعلاه. ستهيمن عوائد السندات على المحادثات، كما فعلت في الأسابيع القليلة الماضية.

مبيعات التجزئة الأمريكية – علاج تجزئة اقتصادي؟

صدرت أحدث بيانات مبيعات التجزئة الأمريكية هذا الأسبوع، وكان من الممكن أن تكون الأخبار أفضل لاقتصاد الولايات المتحدة إذا استمر تأرجح يناير الصاعد.

ارتفعت المبيعات بنسبة 5.4% في أحدث إصدار لبيانات التجزئة، وهي أكبر قفزة في سبعة أشهر، وفق مكتب تعداد الولايات المتحدة. تجاوز الرقم التنبؤات التي توقعت زيادة طفيفة بنسبة 1.1% وكان أعلى بنسبة 7.4% مقارنة بيناير 2020.

من المتوقع أن يكون المال الإضافي في صورة شيكات التحفيز هو السبب وراء ارتفاع إنفاق التجزئة. حيث حصل المواطنون الأمريكيون على 600 دولار من جيب الخزانة – وهناك شيكات بمبالغ أكبر في الطريق، حيث أن واسطة عقد باقة تحفيز الرئيس بايدن قد اعتمدها مجلس الشيوخ.

يتوقع تجار التجزئة على المدى الطويل أن يكون عام 2021 عامًا جيدًا للقطاع. من المتوقع أن يؤثر التحفيز واللقاحات تأثيرًا حقيقيًا على القطاع، خاصة إذا كان هناك طريق للخروج من الغلق هذا العام.

وقال الاتحاد الوطني لتجارة التجزئة NRF في فبراير إن إجمالي تجارة التجزئة يمكن أن يرتفع ليصل إلى 8.2% خلال العام ليتجاوز 4.33 تريليون دولار في 2021 مع حصول المزيد من الأشخاص على لقاح كوفيد 19 وإعادة فتح الاقتصاد. تتأهب الموانئ بعد ذلك لارتفاع مفاجئ في واردات البضائع الاستهلاكية.

وفق بيانات مكتب تعداد الولايات المتحدة، عاد الطلب للزيادة في كل الفئات الرئيسية، بما فيها السيارات والإلكترونيات والبضائع الترفيهية ومحلات البقالة ومواد البناء والبضائع المنزلية كالأثاث. ونمت تجارة التجزئة من دون متجر، والتي تشمل التجارة الإلكترونية بنسبة 11% في فترة المراجعة الأخيرة، مما يشير إلى استمرار التجزئة عبر الإنترنت في تحقيق مكاسب مع بقاء تقييد الوصول إلى المتاجر المادية.

هل يمكن أن يستمر هذا في فبراير؟ ممكن. يعتمد هذا حقًا على كم النقد الجاهز المتبقي في حوزة الأمريكيين لإنفاقه على السلع الاستهلاكية والفاخرة، لكن المبيعات القوية ستكون مقياسًا جيدًا للحكم على سرعة التعافي الاقتصادي الأمريكي.


أهم البيانات الاقتصادية لهذا الأسبوع


Date  Time (GMT)  Currency  Event 
Tue 16th Mar  12.30pm  USD  Core Retail Sales m/m 
  12.30pm  USD  Retail Sales m/m 
Wed 17th Mar  All Day  EUR  Dutch Parliamentary Elections 
  12.30pm  CAD  CPI m/m 
  2.30pm  USD  US Crude Oil Inventories 
  6.00pm  USD  FOMC Economic Projections 
  6.00pm  USD  FOMC Statement 
  6.30pm  USD  FOMC Press Conference 
  9.45pm  NZD  GDP q/q 
Thu 18th Mar  12.30am  AUD  Employment Change 
  12.30am  AUD  Unemployment Rate 
  12.00pm  GBP  MPC Official Bank Rate Votes 
  12.00pm  GBP  Monetary Policy Summary 
  12.00pm  GBP  Official Bank Rate 
Fri 19th Mar  12.30pm  CAD  Core Retail Sales m/m 
  12.30pm  CAD  Retail Sales m/m 


أهم تقارير الأرباح لهذا الأسبوع


Date  Company  Event 
Tue 16th Mar  Volkswagen  Q4 2020 Earnings 
Wed 17 Mar  BMW  Q4 2020 Earnings 
  NorNickel  Q4 2020 Earnings 
Thu 18th Mar  Nike  Q3 2021 Earnings 
  Enel  Q4 2020 Earnings 
  FedEx  Q3 2021 Earnings 

الأسبوع المقبل: مطالبات البطالة وإصدار مبيعات التجزئة بالإضافة إلى محاضر اللجنة الفيدرالية للسوق المفتوحة ومؤشرات مديري المشتريات العالمية

أسبوع حافل في الانتظار. أولًا، تصدر بيانات مطالبات البطالة الأمريكية، والتي تظهر عمق تأثير الجائحة المستمر على سوق العمل الأمريكي. تصدر أيضًا مبيعات التجزئة الأمريكية، بعد نتائج العطلة المخيبة للآمال. لدينا أيضًا محاضر اجتماع اللجنة الفيدرالية للسوق المفتوحة، بينما تصدر أيضًا بيانات مؤشرات مديري المشتريات من جميع أنحاء العالم.

هل تنمو مطالبات البطالة الأمريكية مرة أخرى؟

تواصل الجائحة وضع التوظيف في وضع غير ثابت. تصدر تقارير مطالبات البطالة الأمريكية في الأسبوع المقبل، وإذا اعتبرنا الإصدارات السابقة مؤشرات، فإن التطلعات ستكون مشوشة بعض الشيء.

لم تكن مطالبات الأسبوع الأول من فبراير 2021 قد صدرت بعد حتى وقت الكتابة، لكن في استطاعتنا الحصول على بعض المؤشرات حول ما نتوقعه من تقرير مطالبات البطالة للأسبوع المنتهي في 30 يناير.

كشفت إحصائيات وزارة العمل منذ ذلك الوقت عن تقديم 779،000 مطالبة، مقابل 830،000. كان هناك أيضًا هبوط دون 900،000، وهو الرقم الذي شوهد على مدار أشهر متعاقبة في نهاية 2020، مع وصول مجمل معدل البطالة إلى 6.3% بدءًا من 5 فبراير.

ومع هذا، ما زال حوالي 17.5 مليون أمريكي يطالبون بصورة من صور إعانات البطالة. يحصل 7.2 مليون على مساعدات بطالة الجائحة، والتي تقدم تأمينًا ضد البطالة لعمال الوظائف المؤقتة وغيرهم من غير المؤهلين للإعانات العادية التي تقدمها الدولة.

الرواتب غير الزراعية، أي عدد الوظائف الجديدة المضافة إلى الاقتصاد الأمريكي، تواصل الانهيار، مما يشير إلى أن الطريق ما زال طويلًا أمام أي نمو في التوظيف.

لن تكون البطالة أمر جيد للاقتصاد. فالمال الأقل في أيدي العاملين يعني قدرة شرائية أقل، وهذا يعني أن مبيعات التجزئة ستنخفض على الأرجح (انظر أدناه للمزيد من التفاصيل)، وأن الاقتصاد الأمريكي إجمالًا سيدور فيه مال أقل، وسيعيق هذا الأمر النمو على الأرجح.

تضم باقة تحفيز بايدن، التي تبلغ 1.9 تريليون دولار، العديد من المخصصات لمساعدة الأعمال الصغيرة على الدفع لموظفيها والاحتفاظ بهم. هل هذا كاف؟ يبدو أنها على المسار السريع للتمرير من مجلس النواب، لكن تأثيرها الكامل لن يُرى في المدى القصير، أو حتى تمسك الأعمال الأموال بأيديها.

مبيعات التجزئة الأمريكية – عرض سيء آخر؟

ستتسنى لنا رؤية التأثير المستمر الذي تسبب فيه كوفيد 19 على قطاع التجزئة الأمريكي هذا الأسبوع مع صدور دفعة جديدة من بيانات مبيعات التجزئة.

كانت إيصالات مبيعات ديسمبر منخفضة بنسبة 0.7%، وفق أرقام وزارة التجارة، بحسب ما ذكرت Bloomberg، وهو أمر يكبح ما اكتشفته MasterCard من أن مبيعات عيد الشكر/الكريسماس فاقت التوقعات في حقيقة الأمر.

عادة ما تكون العطلات ذروة مواسم التسوق بالنسبة للمستهلكين الأمريكيين. أضف الجمعة السوداء وإثنين الإنترنت إلى نفس الفترة، وسيتعين حينها على مبيعات التجزئة أن تبدي أداءً جيدًا على الأقل.

أشارت Amazon في آخر إعلان أرباح لها أن إثنين الإنترنت لعام 2020 كان أفضل يوم تسوق لها على الإطلاق، مع مبيعات بلغت 9.2 مليار دولار خلال مدة الأربع والعشرين ساعة تلك. وتجاوزت أيضًا مبيعات يوم Prime التوقعات، بتحقيقها مبيعات بقيمة 10.4 مليار دولار مبيعات.

إذًا، لماذا تنخفض مبيعات التجزئة بوجه عام، إذا كانت Amazon قد حظيت بفترة وفيرة المكاسب؟ بالطبع يسبب الغلق دمارًا للمتاجر التقليدية، لكن فقدان الوظائف يخفض على الأرجح من القدرة الشرائية الكلية للجمهور الأمريكي. بصورة أساسية، ستستمر التجزئة في تلقي الضربات طالما استمر تفشي الجائحة.

وتشير Bloomberg إلى أن تكبد المتاجر الكبرى والمطاعم ومنافذ البيع الأخرى بخلاف Amazon الخسائر هو ما تسبب في هذا الهبوط.

هل يساعد التحفيز؟ يتمثل جزء من أحدث جولات تحفيز الرئيس بايدن في شيكات شخصية بقيمة 1،400 دولار، قد تقرض الأمريكيين لزيادة الإنفاق بعض الشيء على الأمور غير الضرورية.

لكننا لن نعلم ما الذي ستؤول إليه الأمور حتى يُعلن عن أرقام يناير يوم الأربعاء القادم.

اللجنة الفيدرالية للأسواق المفتوحة تصدر أحدت محاضر اجتماعاتها

اجتمعت اللجنة الفيدرالية للأسواق المفتوحة لأول مرة في عام 2021 منذ بضعة أسابيع، وستصدر ملاحظات الاجتماع للاستخدام العام في الأسبوع المقبل.

نعلم من التقارير أن الأمور لم تتغير كثيرًا عما كان الوضع عليه في اجتماع ديسمبر: تطلعات صعودية على المدى الطويل، يقودها اللقاحات والتحفيز، لكن المدى القصير تحفه المخاطر. ففي الوقت الذي يقود فيه التحفيز واللقاحات آمال المستقبل، تعني المشاكل المحيطة بتسليم اللقاح، بالإضافة إلى تآكل سوق العمل، أن الفيدرالي سيتروى على الأرجح فيما يتعلق بالتغيرات الكبرى في السياسة النقدية.

لقد نوقش التضخم، وسط مناقشات اللجنة حول تدريج شراء السندات، لكن يبدو أنه لا توجد مؤشرات إلى أن معدلات الفائدة سترتفع في أي وقت قريب، حتى إذا هبطت معدلات البطالة إلى أرقام تطلق بشكل تقليدي أجراس إنذار الأسعار.

إن جانت يلن واحدة من الوجوه الجديدة المنضمة إلى اللجنة الفيدرالية للسوق المفتوحة، وستتولى وزارة الخزانة. يرى نيل ويلسون، كبير محللي الأسواق لدينا، مجالًا لديناميكية بنيوية مالية-نقدية أكثر تماسكًا يُمكَّن مع تنصيب يلين. هل نتجه نحو تغير نحو النظرية النقدية الحديثة؟

مؤشرات مديري المشتريات – ما هي التوقعات؟

تصدر الأسبوع القادم أيضًا بيانات مؤشرات مديري المشتريات في المملكة المتحدة والولايات المتحدة وأوروبا، معطية مزيدًا من المؤشرات على صحة الاقتصاد في تلك المناطق الجغرافية الرئيسية.

بالنسبة لأوروبا، فإن الأمور ليست جيدة. حيث هبط مؤشر مديري المشتريات من IHS Markit من 49.1 نقطة في ديسمبر إلى 47.5 نقطة في يناير، مبتعدًا عن النقاط الخمسون التي تشير إلى النمو المستمر. هل نتجه نحو هبوط مزدوج؟ الفرق بين اقتصادات الاتحاد الأوروبي الرائدة، ألمانيا وفرنسا، يظهر إشارات مختلفة. فالصناعة الألمانية على سبيل المثال، تساعد على إبقاء ألمانيا على مسار ذو نمو ضئيل، مع زيادة الصادرات، لكن فرنسا لا يمكن قول الأمر ذاته على فرنسا.

بالرغم من هذا، فإن الأمور ليست وردية تمامًا. فقد انخفضت مؤشرات مديري المشتريات الصناعية النهائية من IHS Markit إلى 54.8 في يناير من 55.2 في ديسمبر، بالرغم من أنها بالكاد تجاوزت التقدير «الآني» الأولي الذي بلغ 54.7.

قال كريس ويليامسون، كبير اقتصاديين الأعمال في IHS Markit لوكالة Reuters، «إن ناتج تصنيع المنطقة الأوروبية يواصل التمدد بخطوات ثابتة في بداية 2021، بالرغم من أن النمو قد ضعف إلى الحد الأدنى منذ بدء التعافي، حيث شكلت تدابير الغلق الجديدة ونقص الإمدادات مزيدًا من التحديات للمنتجين في جميع أنحاء المنطقة».

في المملكة المتحدة، هبط مؤشر مديري المشتريات الآني إلى 40.6 في يناير، ليظهر أقل قراءة في ثمانية أشهر. كان هذا بعيدًا تمامًا عن مستوى 45.5 الذي توقعه الاقتصاديين الذين استطلعت Reuters رأيهم، وثالث قراءة تحت 50 على التوالي. وبالرغم من أن تعميم اللقاح في المملكة المتحدة هو أحد أفضل برامج التعميم في العالم، إلا أنها ما زالت في غلق صارم، لتتعامل مع تغير السلالات الفيروسية، ويبدو أن تأثير هذا ما زال عظيمًا على صحة الأمة البدنية، بل والاقتصادية أيضًا.

تشهد مؤشرات مديري المشتريات الصناعية ارتفاعات مفاجئة في الناتج في الولايات المتحدة. تسارعت مؤشرات مديري المشتريات الصناعية الآنية للولايات المتحدة نحو 59.1 في النصف الأول من يناير، وهي أعلى قيمة منذ مايو 2007، منطلقة من 57.1 في ديسمبر. وقد توقع الاقتصاديون قبل ذلك أن يهبط المؤشر إلى 56.5 في بداية يناير. هل يمكن للتوجه أن يستمر؟


أهم البيانات الاقتصادية لهذا الأسبوع

Date  Time (GMT)  Currency  Event 
Wed Feb 17  7.00am  GBP  CPI y/y 
  1.30pm  USD  Core Retail Sales m/m 
  1.30pm  USD  Retail Sales m/m 
  1.30pm  USD  Core PPI m/m 
  1.30pm  USD  PPI m/m 
  7.00pm  USD  FOMC Meeting Minutes 
Thu Feb 18  1.30pm  USD  Unemployment claims 
  3.30pm  USD  Natural Gas Inventories 
  4.00pm  USD  Crude Oil Inventories 
Fri Feb 19  7.00am  GBP  Retail Sales m/m 
  8.15am  EUR  French Flash Services PMI 
  8.15am  EUR  French Flash Manufacturing PMI 
  8.30am  EUR  German Flash Manufacturing PMI 
  8.30am  EUR  German Flash Services PMI 
  9.00am  EUR  Flash Manufacturing PMI 
  9.00am  EUR  Flash Services PMI 
  9.30am  GBP  Flash Manufacturing PMI 
  9.30am  GBP  Flash Services PMI 
  1.30pm  CAD  Core Retail Sales m/m 
  1.30pm  CAD  Retail Sales m/m 
  2.45pm  USD  Flash Manufacturing PMI 
  2.45pm  USD  Flash Services PMI 


أهم تقارير الأرباح لهذا الأسبوع

Data  Company  Event 
Mon 15 Feb  BHP Billiton  Q2 2021 Earnings 
  Michelin  Q4 2020 Earnings 
  Liberty Global  Q4 2020 Earnings 
Tue 16 Feb  CVS Health  Q4 2020 Earnings 
  Palantir   Q4 2020 Earnings 
  AIG  Q4 2020 Earnings 
  Yandex  Q4 2020 Earnings 
  Bridgestone  Q4 2020 Earnings 
  Poste Italiane  Q4 2020 Earnings 
Wed 17 Feb  Shopify  Q4 2020 Earnings 
  Rio Tinto  Q4 2020 Earnings 
  BAT  Q4 2020 Earnings 
  Novatek  Q4 2020 Earnings 
  Hilton  Q4 2020 Earnings 
  Schindler  Q4 2020 Earnings 
  Garmin  Q4 2020 Earnings 
Thu 18 Feb  Walmart  Q4 2021 Earnings 
  Airbus  Q4 2020 Earnings 
  Daimler   Q4 2020 Earnings 
  Barrick Gold  Q4 2020 Earnings 
  EDF  Q4 2020 Earnings 
  Carrefour  Q4 2020 Earnings 
Fri 19 Feb  Hermés  Q4 2020 Earnings 
  Danone  Q4 2020 Earnings 
  RBS  Q4 2020 Earnings 
  Renault  Q4 2020 Earnings 



Risk on, dollar lower

  • Risk sentiment buoyed by Fed, stimulus hopes
  • Dollar sinks to fresh lows
  • Priti Patel says UK and EU in ‘tunnel’ negotiations

Solid start: market sentiment appears buoyed by hopes US lawmakers can strike a stimulus deal and Brexit talks are close to a breakthrough, albeit they are still hanging by a thread and the deadline is only two weeks away. European equities traded higher on Thursday, while US futures rallied and looked to open at record highs after the Fed signalled it will stand by the economy and keep the cash taps on.

The Fed will continue to buy $120bn of bonds until “substantial further progress has been made toward the Committee’s maximum employment and price stability goals”. This could be taken as a fairly hawkish statement, signalling the Fed’s readiness to slow the pace of asset purchases as soon as perhaps the middle of next year, by which time policymakers think people will be comfortable heading out. Moreover, the Fed did not expand asset purchases as some had called for, nor did it shift the focus of asset purchases to longer dated debt. However, Fed chair Jay Powell insisted that the Fed would do more if needed and suggested any inflation next year would be transitory. On the whole, this remains a very dovish bias, but policymakers upgraded their near-term economic forecasts. Markets were not unduly responsive to the statement, with the 10-year Treasury holding within the 0.925%-0.95% zone.

US lawmakers are moving close to agreeing a $900bn Covid relief bill that could include $600 stimulus cheques and extended unemployment benefits. Both sides are sounding a lot more optimistic, but there is still some haggling over the finer details to be done before it is signed off.

Home secretary Priti Patel said the UK and EU were in tunnel negotiations. It’s not quite the breakthrough moment we’ve been waiting for since they’ve been some form of last-ditch closed-door talks for weeks. The pound traded higher.

Sterling advanced to make new highs vs the dollar amid swirling reports of progress and deadlock on the Brexit front, however the move seems to be more linked to dollar weakness than a new bout of pound strength. The dollar index broke down to its lowest since Apr 2018 under 90. This helped GBPUSD move clear of its recent highs at 1.3540 to 1.35850 this morning.

The Bank of England meets later and should signal it’s prepared to do more should financial conditions deteriorate in the New Year. The MPC voted through an additional £150bn in QE in November is not in a rush to pull any more strings just yet, particularly given the Brexit uncertainty. Any talk of negative rates will be jumped on by the market, but this should be a fairly quiet affair.

Crude oil prices rose after a big draw on US inventories lifted sentiment and reduced fears of a build-up of stocks ahead of the Christmas period. The draw of 3.15m barrels compared with a huge 15m build in the previous week. Gasoline inventories rose by 1m barrels, but this was less than expected. WTI (Jan) kicked on after the release and moved above $48 where it has held gains.

Stocks weaker post-Fed, Bank of England, OPEC+ meetings ahead

Wall Street fell and Asian equities followed the weak handover even as the Fed stayed very much on script with a dovish lower-for-longer message, whilst also presenting a more upbeat take on the economy in the near term.

The Fed put some meat on the new average inflation targeting skeleton that was sketched out by Jay Powell at Jackson Hole, saying it will aim to achieve inflation ‘moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well anchored at 2%’. But the rub is that it doesn’t see this inflation coming through until 2023 at the soonest.

There were no explicit easing measures to get there sooner, so the FOMC has only really filled in some blanks as to what we already knew, and seems content for now to wait for Congress to sort the fiscal side out before it does anything more. The lack of any real determination to get inflation up sooner seemed to disappoint for risk.

Equities lower after FOMC, dollar catches bid

Equities peaked after the statement and then progressed lower during the presser with Powell right into the close, with the S&P 500 finishing down half of one percent at 3,385, led by a decline in tech, which is about a quarter of the index, whilst energy – now a tiny c2% weighting of the index – rallied 4% as oil climbed.

The 21-day SMA offered resistance and now we are looking again to the 50-day line at 3,335, with futures pointing lower. Meanwhile the Nasdaq finished –1.25% lower with Tesla, Apple, Amazon et al falling, and is likewise trapped between its 21-day and 50-day lines, with big trend line support close. European equity markets took the cue and fell over 1% at the open as the FTSE 100 again tested the 6,000 level.

USD caught a bid as well, with the dollar index lifting from a post-statement low of 92.85 to clear 93.50 overnight, before coming off a touch to 93.30 in early European trade. GBPUSD retreated to 1.2950 having earlier hit the 1.30 level. Gold came off its highs at $1970 to test the $1940 support area.

The Fed sees unemployment at a lower level and a larger economy by the end of the year than it did in June. Real GDP forecast for 2020 was revised down to –3.7% from –6.5% in June. Unemployment is seen at 7.6% compared with the 9.3% anticipated in June. Inflation is seen picking up more than it was in June albeit the rise in breakevens has levelled off at about 1.7%.

The key takeaway from the economic projections is that both core and headline PCE inflation are not seen returning to 2% until 2023 – the Fed even had to add a year to the forecast horizon just to get this in. Given it didn’t manage to get to 2% with unemployment under 4%, there is a lack of credibility around this, even though I for one believe inflation will come through.

The Fed is in the dark and there is no more it can really do without spiralling into the abyss of negative rates. The Fed is in the dark not just because it has no control over inflation, but also because the political situation remains very unclear with regards to fiscal stimulus and the presidential election in November.

So, there is a lot of uncertainty and all the Fed can really do is continue to stress its willingness to do whatever it takes and its willingness to overlook overshoots on inflation should they emerge. I’m in the camp that does expect inflation to feed through due to the massive increase in the money supply combined with supply chain disruption and the fiscal largesse.

The Fed’s policy shift also raises the prospect of inflation expectations becoming unanchored. However, we cannot ignore the fact that the pandemic has had a chilling effect on confidence and spending may be slow to reappear, pushing down on inflation for a while longer.

US data softens, focus switches to jobless claims and Bank of England

US retail sales lost momentum last month, with sales rising just 0.6% versus the 1.1% expected, signalling the effect of the expiration of $600 stimulus cheques that made many at the lower end of the income scale better off out of work than in.

US jobless claims later today will be closely watched for signs of any improvement after last week’s disappointment. Last week’s print of 884,000, which was flat on the previous week, signalled a slow down the recovery in the labour market and worried economists.

The Bank of England delivers its monetary policy statement at midday – will it surprise by going ‘big and fast’ with more QE – as governor Andrew Bailey suggested is the best approach for central banks in times of crisis last month?

There is also speculation that the Old Lady of Threadneedle St will turn to negative interest rates to stimulate the economy. Speaking to MPs recently, Bailey refused to rule out negative rates – a policy that has systematically failed to deliver the required inflation in the Eurozone – saying that it remains in the box of tools.

I’d expect the Bank to tee-up an increase in QE in November and not further rate cuts, but it may choose to fire first and ask questions later.

Snowflake surges on IPO

Snowflake (SNOW) shares made an astonishing stock market debut. After pricing the IPO at $120, the stock flew to almost $280 in the first few hours of trading before settling at $253. The price to sales multiple of about 360 is simply astounding – a lot of future growth was priced into the stock on its first day.  It’s the biggest software IPO ever and demand was exceptionally high, and the multiples being paid even loftier.

It seems to be a story of the scarcity value of growth. It also shows just how much wild, free-flowing money there is in the market right now chasing whatever’s seen as hot and whatever offers the most growth.

We’re almost into the territory of describing these tech stocks as Veblen goods, where demand rises with the price. The IPO market is getting very frothy. We can blame/thank the Fed for this situation with ultra-low rates assured for a very long time and massive liquidity needing to find a home at whatever price that is. It’s like 1999 all over again.

London sees biggest listing in years as The Hut Group IPOs

Even London is getting in on the action with The Hut Group getting its IPO off with a swagger and a close at more than £6 after listing at £5. As noted when the listing was announced at the end of August, the valuation it deserves depends very much on your point of view.

In 2019 THG achieved year-on-year revenue growth of 24.5% to reach £1.1 billion with adjusted EBITDA of £111.3 million. The float aimed to raise £920m at £4.5bn market cap, which at c40x last year’s EBITDA and x4 sales doesn’t seem like too much to pay for this kind of growth….or does it?! The answer rests surely on whether it deserves a techy or a retail multiple.

Management forecast overall revenue growth of 20-25% over the medium term, with its tech platform Ingenuity (the capital-light growth lever) forecast to grow at 40% primarily as a result of increasing mix of e-commerce revenues as global brand owners accelerate their adoption of D2C strategies.

But revenues from Ingenuity remain relatively small – £61m in the first half of 2020, which was flat on last year and less than 10% of total group revenues. As a percentage of group revenues, the contribution from Ingenuity is going down. Again it’s the promise of growth that is appealing to investors right now.

Oil softens after FOMC statement

Elsewhere, oil was a little softer overnight as risk sentiment came off the boil after the Fed, but this came after a couple of very solid days. WTI for Oct breached $40 on the upside before paring gains but the $39.50 area has held for the time being and offered a springboard in early European trade.

EIA data showed inventories fell 4.4m barrels, contrasting with forecasts for a build. Gasoline stocks were drawn down at twice the rate expected. However, we remain concerned about the demand pick-up through the rest of the year – as all the main agencies have recently revised their demand forecasts lower.

We note also a report suggesting that OPEC is not about to panic by further cutting production – however that would depend on prices; WTI at $30 again might induce action. OPEC+ members are holding an online meeting today to assess compliance and whether additional cuts may be necessary – I would think for now they will stand pat, with the focus chiefly on compliance with current targets, which currently stands at 101%, according to sources reported yesterday.

But if prices come a lot more pressure there would likely be an OPEC+ response.

Markets steady before Fed meeting, Hut Group pops as IPO market shines

It’s Fed day: risk sentiment remains broadly positive but the big-ticket event is the Fed policy meeting. US stocks rose Tuesday as the two-day Fed policy meeting kicked off.

Whilst there is relative calm in markets again after the tech-led sell-off produced a correction in the Nasdaq and a 7% decline in the S&P 500, the expectation on the Fed to be very dovish may lead to volatility should the market think the FOMC isn’t offering enough detail on the future path of monetary policy.

The S&P 500 added 0.52% and managed to close above the psychologically significant 3,400 level after running into resistance at the 38.2% retracement of the early September pullback, with the 21-day SMA sitting around 3,426, which may offer a further test for bulls. The Nasdaq added 1.2% as Tesla shares rose a further 7%, extending the rally from Monday’s 12% gain.

Overnight, Tokyo was flat as Yoshihide Suga was elected as Japan’s new prime minister, replacing Shinzo Abe. European equity markets were slightly higher in early trade, though the FTSE 100 dropped.

FOMC preview: what to look for from today’s Fed announcements

There are several things to look out for from the Federal Reserve today, not least some firming up of the details around the new average inflation targeting regime.  After Jackson Hole, there were some unanswered questions for the FOMC.

There was not much in the way of detail of how the Fed plans to deliver the new AIT framework, for instance. And Powell’s speech lacked in any real specifics on the nature of forward guidance that the FOMC is clearly leaning towards – this will be an important lever of the AIT approach, so it needs to be clarified at this meeting.

Should forward guidance be based on a time horizon or specific economic data? Yield curve control has been shelved as an idea by the FOMC but remains an option should it desire. Today’s statement and press conference with Powell will be of great importance to iron out how AIT will be delivered.

Powell stressed that if ‘excessive inflationary pressures’ were to build, or inflation expectations were to rise above levels consistent with its mandate, the Fed ‘would not hesitate to act’. This gives it a degree of latitude down the line should there be a major inflation overshoot, which as noted on several occasions, is a very real possibly if expectations become unanchored.

So far, after rising sharply post the March trough in financial markets, US 10-year breakevens have levelled off, whilst benchmark bond yields have barely budged.

Fiscal stimulus in focus ahead of Fed statement

The Fed is also likely to lean heavily on the need for Congress to come up with fresh stimulus – it cannot do all the lifting here. Whilst a fifth package remains elusive, Nancy Pelosi has signalled that Democrats could delay the October recess in order to get a deal done, with the White House saying the $1.5tn package floated by the ‘Problem Solvers Caucus’ was worthy of discussion.

The Fed has not quite exhausted all its ammunition, but it’s very much in a position where it needs to wait for the fiscal support. Several Fed officials have been talking up the need for fiscal support.

There will also be updated economic projections to watch out for along with the tone the Fed strikes on the economic outlook  – we know the Fed has taken a pretty cautious view of the economy and the loss of momentum in initial jobless claims may be a concern.

Looking ahead to today’s session, US retail sales will also be closely watched and may well show a sharp slowdown after Americans’ $600 stimulus cheques stopped. UK inflation figures earlier this morning showed a sharp drop in CPI inflation to 0.5% in August from 1.1% in July, as the Eat Out to Help Out scheme and the VAT cut on the hospitality industry bit into prices.

Hut Group IPO

Elsewhere, Hut Group shares got off to a lively start on their stock market debut, rising to 650p in what is the biggest IPO in London this year and for several years. As noted when the filing was lodged, after a considerable ramp in tech valuations this year – eg, Ocado +100% in the last 12 months – this IPO looked like a well-timed move, at least on the part of the founder who is due a bumper £700m pay-out should all go well, whilst still remaining very much in control of the business.

The question is whether this 10% margin business deserves a tech rating. A standard listing makes it ineligible for inclusion on the FTSE index although its mooted market cap would be enough just to make the FTSE 100. Any standard listing raises eyebrows as it means no index inclusion and lower governance standards. Arcane incentive schemes and a founder share model are also suspect.

Founder Matt Moulding is also selling £54m of stock despite previously indicating he would retain all his shares. Heavy demand indicates what a tech multiple, zero per cent interest rates and a premium on growth can do for your stock.

Indeed, the IPO market continues to show considerable strength, which does not indicate significant signs of stress in capital markets. Snowflake, a cloud software business backed by Warren Buffett, got its IPO off cleanly at a price of $120, valuing the company at $33bn.

Apple unveiled new products, but investors were underwhelmed by products like the new iPad Air and new watches, with the shares flat on the day and ticking lower by 0.67% in after-hours trading. All investors really care about is the 5G iPhone launch, when it comes.

Oil climbs on back of large inventory draw

Crude oil prices rose after a surprisingly large draw on inventories and have now bounced over 8% from last week’s lows. API figures showed stocks fell 9.5m barrels in the week ending September 11th, much more than the narrow 1.27m barrel draw expected.

EIA figures today are expected to show a build of 2m barrels, which seems rather unlikely in light of the API report. Oil prices firmed despite OPEC and IEA reports this week indicating a slower recovery in demand in 2020 than previously forecast.

Nevertheless, prices look vulnerable to a further pullback as the near-term uptrend runs out of steam and the longer-term downtrend re-asserts itself.

Stocks open higher ahead of busy central bank week

It looks like a second wave, but not as we know it. Even if cases are starting to rise in Britain and elsewhere, deaths are not picking up in the same way as before – younger, less vulnerable people are getting the virus this time it seems.

The World Health Organization (WHO) recorded a record one-day rise in cases globally. France recorded a record number of new infections – some 10k over the weekend. There is not the appetite for blanket shutdowns of the economy again – this is good, but the ongoing fear factor will keep a lid on animal spirits.

And governments could be spooked into heavy-handed responses, even if they don’t want to kneecap the economy.

AstraZeneca resumes vaccine trial

Fear can be vanquished with a vaccine, so it’s good news that AstraZeneca and Oxford University are resuming trial of their vaccine candidate, after it was paused a week ago. News on a vaccine – good or bad- is set to emerge in October, it seems.

Pfizer says there is a good chance it will deliver data from its late stage trials of its candidate vaccine, developed with German drug maker BioNTech. If approved, it could be available to Americans by the end of the year. The question is whether this may be needed – Sweden seems to be showing the way towards herd immunity.

With vaccines and herd immunity, unemployment becomes a much bigger problem. The end of the furlough scheme raises the prospect of employment rates reaching a cliff-edge. Unemployment could spiral and redundancies are taking place at twice the rate of the last recession. US initial jobless claims last week indicated the recovery is slow, even if job openings are more encouraging.

BoE to signal more stimulus this week?

This could make this week’s Bank of England meeting interesting. It has enough ammo in the quantitative easing quiver to last until the end of the year, but with only two more scheduled before 2020 is over, the Bank will need to lay the ground for more stimulus. Governor Andrew Bailey said central banks should go “big and fast” with QE and other stimulus at times of crisis.

If there an explosion in unemployment, this line will be tested. I’d expect the Bank to sound more dovish this week, although it is unlikely to alter policy so far in advance of the November Budget, in which the government show its fiscal hand.

Of course, there is still time for Rishi Sunak, the Chancellor, to extend furlough, as many are urging him to do. UK 2-year gilt yields hit fresh record lows this morning with the market seemingly convinced the BoE will give a very strong signal it is preparing to deliver additional stimulus – most likely in the form of increased asset purchases rather than a descent into a vortex of negative rates.

The problem of furlough schemes and extending them is of course one of productivity and the opportunity cost of maintaining people in a kind of output stasis. Zombie workers and zombie companies are a growing problem. Indeed, new research shows the number of zombie companies in the US is near the 2000 record.

European stocks build on decent week

European markets opened higher on Monday, with the FTSE 100 solidifying above 6,000 and the DAX ticked up to 13,300. This comes after a decent week for European markets that contrasted with Wall Street weakness.

The Nasdaq finished last week down –4%, with the S&P 500 dropping –2.5% over the five days. The Nasdaq broke under its 50-day simple moving average, whilst the S&P 500 traded through it at the lows but held it at the close.

European markets fared better as they were much less exposed to the sell-off in tech – some rotation taking place as investors look to ‘reopening’ stocks over the Covid-19 winners, but it was far from anything significant.

Indeed, in dollar terms, the moves in the FTSE 100 for example were far less impressive. Investors in the US may also be paying attention to the presidential race – Biden’s tax plans would knock earnings, although it’s far tighter race than the national polls indicate. US futures are higher and have cleared the Friday peak struck during the London morning session.

Abenomics safe as Suga elected new leader?

Suga-high for Japanese equities? In Japan, Yoshihide Suga, the former chief cabinet secretary, looks set to replace Shinzo Abe as prime minister after being elected to the lead the country’s ruling Liberal Democrat Party. Suga has pledged to maintain Abenomics and seems to be causing few ripples in the market.

He will only have a year to make an impact though before the next elections are scheduled – he could choose to call a snap election to shore up his support, but the coronavirus might get in the way.

The Nikkei 225 edged up 0.65%, while the yen was steady against the dollar at 106.

M&A activity is rising and there are deals aplenty – TikTok seems to be heading the way of Oracle, whose chairman is a Trump support, whilst SoftBank is offloading Cambridge-based Arm to Nvidia.

Meanwhile Gilead, whose remdesivir antiviral is treating Covid-19 patients, is buying Immunomedics for $21bn. With vast sums of private equity to be deployed, there may be a slew of deals and takeovers as we head into the autumn.

Brexit and Federal Reserve to weigh on cable, gold rangebound

In FX, ongoing talks between the UK and EU look set to be the chief driver for GBP crosses. However, a Federal Reserve meeting this week will impact the USD side of cable. There is not a new to say about the Brexit talks after last week – we await to see whether the discussions can get any further.

Usual headline risks to cable, but GBPUSD could get squeezed higher absent of any negative news. GBPUSD traded at 1.2840 in early trade having made a firm near-term base at the 200-day EMA at 1.2750. Downtrend still in force until the 1.30 handle is recovered.

Elsewhere, gold is still trading in a very narrow range around the $1940 level. US breakevens have come down a bit, US 10s are hunkered in around 0.66% and real rates (10-year TIPS) have just come down a touch.

Remember it’s Fed week. The Federal Reserve convenes on September 15th and 16th for the first time since Jerome Powell signalled that the central bank would be prepared to tolerate higher inflation as a trade-off for a swifter economic recovery and jobs growth.

Unemployment has fallen since the pandemic peak but is not improving quickly enough. The Fed is not expected to announce any fresh policy change but will reinforce Powell’s message from Jackson Hole on the policy shift.

Indeed the main focus for the Fed right now is actually not monetary policy but fiscal as members await any move in Washington to deliver a fresh stimulus package.

Fed minutes waltz away with risk appetite

FOMC minutes are casting a shadow over markets and underline that any recovery is not going to be a straight line of advances. The Fed layered on the risks and caution thick, but didn’t come up with any sweeteners for the market in the shape of more easing.

The US dollar roared back, gold tanked, and stocks are wobbling after minutes from the Federal Reserve’s July meeting left investors a little disappointed. Members clearly backed away from yield curve control and seemed to be in less of a hurry to push for clearer forward guidance.

‘With regard to the outlook for monetary policy beyond this meeting, a number of participants noted that providing greater clarity regarding the likely path of the target range for the federal funds rate would be appropriate at some point,” the minutes said. This use of the phrase ‘at some point’ indicated members are not in a rush to tie rate hikes to specific economic goals. The Fed also noted that most members judged yield curve control ‘would likely provide only modest benefits in the current environment’.

The FOMC meets again in mid-September and will be reviewing the recent economic progress. For now it seems the Fed doesn’t feel the need to go quickly on more explicit forward guidance as the economy is still ‘in’ the pandemic – as long as cases rage we know what the Fed will do. The question comes on the exit – how quickly does the economy need to recover into the autumn for the Fed to feel the need to tie tightening to specific economic goals – the purpose of which would be to keep markets on an even keel.

Equities trip on FOMC minutes

The S&P 500 flirted with 3,400 in the early part of Wednesday’s session but shot 50pts lower after the minutes were released, ending down 0.44% to 3,374.85. The Dow and Nasdaq both tripped up as well. Asian markets fell overnight. European equity indices are taking their cue from this weak handover and dropped over 1% in early trade, before stocks pulled off the lows after China’s ministry of commerce said this morning that US-China trade talks would resume in the coming days. Vix futures are still pointing to increased volatility as we head towards the US election in November.

Apple hits $2tn market cap

Apple advanced to a new record high and became the world’s first $2tn company as it rose above $467 but closed flat at $462.83. There is a lot going on here – some of which is driven by Apple’s business and some of which is due to external factors. Apple has created a brand with immense power, and investors have really bought into the pivot towards Services to generate more sustainable revenues than being a pure play hardware manufacturer.

The upcoming rollout of 5G iPhones is a prime factor, as is its very strong balance sheet. I also think we could throw in the upcoming stock split as a factor as despite the fact it ought not to matter to the share price, it will undoubtedly make it easier for retail investors – a growing crop of US day traders – to buy the shares. Cf Tesla. And it’s a Covid-winner – the thirst for high quality growth has been well documented.

Dollar up, Brexit headline risks could weigh on sterling

The dollar caught a strong bid after the minutes. EURUSD fell from 1.1940 to 1.1840 where it has found support and is pushing off this level to pare some of the losses this morning. Cable also shipped two big figures in the last day and is now under 1.31 with near-term horizontal support at 1.3050. Brexit headline risks remain as trade talks continue this week – update coming tomorrow but we could get wire reports to knock the stuffing out of sterling. Overall if this is a cyclical dollar bear market then we would see this as a temporary blip.

Delivery Hero – a beneficiary of an increase in orders due to the pandemic – has been named the replacement for the disastrous, scandal ridden Wirecard on the DAX. The food delivery company will join the German blue-chip index on Monday. Delivery Hero is on course to deliver one billion orders this year, thanks in large part to the lockdowns.

Another sub-1m print for US jobless figures?

US initial jobless claims today are expected to come in under 1m again, with continuing claims at 15m. Last week’s report showed jobless claims fell under 1m for the first time since the pandemic, but unemployment levels remain exceptionally high and the concern is that temporary layoffs become permanent. The rate of change is not going to improve – the easy wins are behind us and the hard slog lies in front.

EIA crude oil inventories showed a draw of 1.6m barrels last week, while gasoline stocks declined by 3.3m barrels. WTI crude prices nudged up to $43.20 before pulling back as risk assets came under pressure from the Fed minutes. Copper prices broke above $3 for the first time in over two years but failed to sustain the move after the minutes and pared gains.

Tomorrow morning watch for Eurozone PMIs (ignore) and UK retail sales. Sales rebounded 13.9% in June after May’s 12.3% jump, which almost took total sales back to where they were before the pandemic. We know however that these masks huge shifts in how people spend their money. We also know that when furlough schemes end and we get a real increase in unemployment, people will be tightening their belts.

US EIA Oil Inventories Preview: Crude edges higher on surprise API draw

Crude and Brent oil continue to trade sideways today, with crude adding $0.38 and Brent up $0.40 to reclaim around half of yesterday’s losses.

While crude oil has managed to rise above previous long-term resistance at $41, a new ceiling at $42 has quickly been established, and WTI continues to trade within a narrow range. It is the same story for Brent – a break above $44 early last week couldn’t be sustained.

API data surprises with large crude draw

Today’s gains have been prompted by the latest American Petroleum Institute’s crude oil inventories data, which has surprised with a sizeable 6.829 million barrel draw. Analysts had expected to see a mild increase of 357,000 barrels.

While this points to better-than-expected demand, it’s worth noting that last week’s figures revealed a shock build of 7.544 million barrels against expectations of a draw.

Stimulus talk, FOMC meeting limit upside for oil

Also capping gains are delays to the next US stimulus bill. Republicans and Democrats are still debating the measures – Democrats claim they don’t go far enough, but President Trump also has criticisms of the bill.

Oil gains could accelerate on this afternoon’s US crude oil inventories data from the Energy Information Administration. Analysts predict a build, but after the API’s figures we could see the data confirm a large, unexpected draw instead.

Market focus on tonight’s announcement from the Federal Open Market Committee could keep a lid on price action. Traders are expecting the FOMC to reaffirm its commitment to stimulus – the Federal Reserve has already announced that its lending programmes will continue until the end of the year, beyond the original September end date.

However, if policymakers don’t sound as dovish as markets expect this could fuel a rebound for the dollar, which this week hit two-year lows. Dollar strength would put downside pressure on crude and Brent even if the latest inventories data is positive.

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