-
Week 15
Macro This week, risk assets came under pressure as Wednesday’s CPI report exceeded expectations, marking 3rd increase in a row. Since the FED is facing three reports now, it will be easier to argue for the rate cuts before the fall if significant CPI improvements are in the upcoming April and May reports. The increases,…
-
Week 14
Macro The US labour market remains very strong, with this week’s payroll report reflecting 303,000 jobs added in March (vs 214k estimated), with the unemployment rate and average hourly earnings (MoM) as expected at 3.8% and 0.3%, respectively. Such a report suggested that the economy is still booming and that in this economic environment, the…
-
Week 12
Macro The FED evaluates the optimal inflation rate and the policy path to achieve it. It is trying to prioritize the labour market over the noisy inflation data, as it didn’t change its December projections and committed to 3 rate cuts over the remaining 6 meetings this year. This is despite its now forecast of…
-
Week 11
Macro Last week, we discussed hot payroll numbers with cool wages and a strong but perhaps moderating economy. This week, we have received another hotter-than-expected inflation print, but investors still expect three rate cuts this year, with the first one starting in either June or July. As the outlook on the US economy is relatively…
-
Week 10
Macro On Friday, we had the latest US job numbers with a downward revision for February to 275k (ahead of the 200k estimate). However, the unemployment rate jumped to 3.9% (expected 3.7%), a new two-year high. Average hourly earnings increased by just 0.1% MoM or 4.3% YoY. These numbers indicate that the US labour market…
-
Week 9
Macro The US economy is not slowing down, and most point to the increases in budget deficit and fiscal stimulus from debt overlay, which kept going for the last four years. Some go as far as to say that since the pandemic, the government is spending so much money that it’s hard to have a…
-
Week 8
Macro After every major economic shock or recession, people tend to become more conservative, more price-sensitive and economically cautious, and they tend to save more. However, after the COVID, it was the opposite. People locked at home increased their good consumption and started speculating in financial markets; later, when they were allowed to socialize and…
-
Week 7
Macro Based on all upcoming macro data, the FED is highly unlikely to cut rates as much as the market expects. CPI and PCE reported this week that they are falling but above expectations. Most of the resilience in inflation comes from the services sector, which is mostly a post-COVID catch-up. The overall mosaic of…
-
Week 6
Macro There are worries that “the last mile will be the hardest” in the inflation battle and that, historically, inflation spikes are coming in wavers. We have to be cognizant of the inflation acceleration risks, but the fear that inflation will spike again significantly might be overblown. Except for the “unknown unknowns”, such as unforeseen…
-
Week 5
Macro Blockbuster US Jobs Report gives a surprisingly strong start to 2024, showing that the labour market remains remarkably resilient. The payroll report nearly doubled economists’ forecast (185k), adding 353k jobs in January, and significantly revised December’s number from 216k to 333k. Hourly earnings jumped 0.6% in January (faster than December and November gains of…