Daily Digest:
1 December: Global bonds and USTs backed up to higher yields Thursday, as US stock index futures were mixed, despite US PCE data showing inflationary pressures cooling. Friday's focus is on US and global PMI data, plus Powell speaks as the Fed go into its blackout period

Global Stocks Hesitant with Earnings Caution, Global Yields Rise


Macroeconomic/ geopolitical developments

  • Four weeks now since the March banking crisis without any notable contagion, as fears of a more protracted, deeper financial meltdown continue to ease.
  • But, as the banking crisis has eased, this has subsequently pulled yields higher across the US Treasury curve, notably at the front end
  • Interest rate markets as highlighted by the CME FedWatch tool are shifting closer to views implied by Fed speakers, which is for “one and done”, another rate hike in May and then a pause, with no further hikes for the year.
  • However, the interest rate markets continue to price in rate cuts later in 2023.
  • Key data last week were the global Flash PMIs from S&P Global, which continue to show an improving trend, with April Service data surprising to the upside, although Manufacturing data disappointed.
S&P global pmi
  • On the earnings side, initial optimism from the banks has waned, as last week saw some significant companies disappointing, notably Tesla, announcing a sixth price cut already this year.

Global financial market developments

  • US and European Bond pushed to higher yield territory, sustaining a higher yield bias.
  • The US Dollar Index was sideways but remains vulnerable after hitting a multi-month low in mid-April.
  • Gold sold off from another new 2023 and multi-month high in mid-month, rejecting an immediate challenge to record levels.
  • Oil prices sold off from a multi-month high in mid-April, pushing into the bull gap from the early April surge, after the announcement of supply cuts by OPEC+.

Key this week

  • Central Bank Watch: The Fed moves into its blackout period, the Bank of Japan (BoJ) interest rate decision Friday is the only significant central bank event this week.
  • Macroeconomic data: US data focus is on Consumer Confidence and Durable Goods Tuesday and Wednesday, then GDP and Personal Consumption Expenditure (PCE) Thursday and Friday.
  • Earnings Season: US earnings season continues to unfold with standouts being GE, Alphabet, Microsoft, Boeing, Meta, Caterpillar and Intel.
DateKey Macroeconomic Events
24/04/2023German IFO Survey
25/04/2023US Consumer Confidence, US New Homes Sales
26/04/2023Australian CPI, US Durable Goods
27/04/2023EU Consumer Confidence, US Advance GDP and PCE
28/04/2023Bank of Japan interest rate decision and statement, German Unemployment, GDP and HICP (inflation), US Core PCE, Canada GDP

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

Comments on this analysis

Your email address will not be published. Required fields are marked *