sellside observations and a couple economic calendars to help prepare for the week ahead
Good afternoon. I was out Friday — Thursday afternoon ‘Thing 2’ graduated HS and the festivities continuing along thru the weekend into Monday. Posting shall remain light, if at all.
Did I miss anything?
Bad news as good (here and here), all noted before, here’s a visual from BBG
The next Federal Reserve rate cut is less than a year away. That's the takeaway from Eurodollar pricing as traders consider the consequences of a central bank willing to hike the US economy into recession. The spread between March and June 2023 contracts -- a gauge of the expected movement of rates over that time period -- has fallen into negative territory. Fed Chair Jerome Powell nailed down his “unconditional'' commitment to tackling sky-high inflation in his second day of testimony to US lawmakers Thursday. He had acknowledged it was going to be tough to achieve a soft landing the previous day. But traders remember Powell is quick to pivot, such in early 2019 when he signaled the Fed could pause interest-rate increases if the US economy weakened. The bond market continued its recent rebound Thursday as US purchasing manager data came in below expectations. If a trend of weaker-than-forecast economic data establishes itself, expect bets on the next Fed rate cut to continue to mount.
That said, a few items and links of interest
Global Wall Street’s inbox — a few observations from the sellside HERE
Macro ALF asks, Time To Buy Bonds?
… Summing up: in the Senate Banking Committee hearing, Powell told us he isn’t gonna dial back his hawkish stance despite clear signs of demand destruction emerging in both forward-looking indicators and now also in several macro asset classes.
As time goes by, this is going to increase the probability of a recession and the attractiveness of long-term bonds.
For short-term bonds to convincingly rally too, we’ll instead need Central Banks to fully capitulate to the demand destruction narrative - it’s going to take a bit longer.Hence, ladies and gentlemen: it’s time for some (bond) trades!
How do we structure those? …
Kimble: Are Commodities Double Topping After Historic Run?
(lets hope?)
Federal Open Market Committee announces its tentative meeting schedule for 2023
Plan your vacation and celebratory days off accordingly …
And for those attempting to plan your trades and trade your plans in / around FUNduhMENTALs — INCLUDING 2 TSY AUCTIONS MONDAY — here are a couple economic calendars and LINKS I used when I was closer to and IN ‘the game’. First, this from the best in the strategy biz is a LINK thru TO this calendar,
Wells FARGOs version, if you prefer …
… and lets NOT forget EconOday links (among the best available and most useful IMO), GLOBALLY HERE and as far as US domestically (only) HERE …
Finally, in closing — where I typically leave some space for ‘comedy’, somehow and for some reason, I’m seeing this as a good fit
… THAT is all for now. Back TO what is left of the weekend … Out tomorrow so, just in case something else / more crazy happens in mkts …