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Back to the data with Ukraine distractions - Markets Weekly

Markets Key Themes

  • Fed not so hawkish – FOMC minutes
  • Markets are nervous – stock market correction and Ukraine tensions worsen
  • Bonds rally back to the top of the range snapping markets out of their lethargy
  • AUS employment solid but ignored
  • USD/JPY and Nasdaq sitting on important support levels after a bad week – will they bounce?

Post Payrolls Reversal - Markets Weekly

Markets Key Themes

 

  • ECB stands pat but plenty of QE discussion
  • Payrolls was pretty good but markets reverse – a sharp positioning move or a reversal?
  • RBA meeting not much has changed
  • Stevens doesn't count his chickens yet- message the market might be ahead of itself
  • China fiscal stimulus – no big dealChina data sigh of relief but not a big bounce after Chinese New Year
  • Range-bound markets frustrating those looking for range breaks.
  • AUS bonds trapped.

Bonds remain under pressure into US Payrolls - Weekly Charts

Bonds have been under pressure again this week amid expectations of a solid Payrolls release. The US curve is flatter but the AUS curve has bounced. Stevens said yesterday he isn't counting his chickens yet regarding the economic recovery which I think was a subtle way of reminding the market not to get ahead itself in regards to rate hikes. This helped the AUS-US bond spread to contract 5bp overnight and could be the medium term trade to have on. 

RBA, ECB and US payrolls - Markets Weekly

Markets Key Themes:

  • Upbeat RBA Stevens frustrates AUD bears – where's the jawboning gone?
  • China and Ukraine worries diminish again
  • China stimulus hopes
  • Quiet markets frustrating
  • Still no sign of inflation in the Northern Hemisphere

AUS curve bear flattens into and after Stevens speech

The front end of the market is under real pressure after Stevens speech but we haven't cracked yet. I wonder if the market is getting carried away by a few words (mostly related to housing) in a speech in HK in what is otherwise a very quiet market.

PMI's and Stevens speech this week to watch

Markets Key Themes

 

  • FOMC shock – slightly more hawkish Fed funds forecasts with rate hikes a bit sooner than previously expected
  • Front end of the US bond market is now on the back foot and investors now face a probable bounce in economic data
  • RBA high hurdle to cut again
  • China slow down fears simmer away
  • Ukraine/Russia crisis impact on markets diminishing (for now?); mkts reacting positively as nothing worse happens
  • Copper and Iron Ore stabilise
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