- ?We have 13 Central Bank meetings this week and most CBs are expected to hike rates. Undoubtedly the marquee event would be the FOMC from 20th -21st Sep with the rate decision coming on 21st Sep 2 pm EST where consensus is for a 75 bps hike which will take the lower bound of the Fed Funds rate to 3%. This time we will also see the updated Dot Plot from Fed officials. The current median projection for 2022 and 2023 are 3.38% and 3.8% respectively which will most probably be revised upwards. Other major Central Banks that meet this week are Bank of England, Bank of Japan and Swiss National bank.
- Last week on Friday we saw another leg down in equity markets and only 2 of 11 sectors ended in green with consumer staples (+0.22%) leading and energy (-2.20%) lagging. SPX Index also broke below the important technical level of 3900 and was down 0.72% on the day as investors grappled with FedEx’s bombshell earnings announcement where officials cited softness in the global volume of shipments as the driver of the weakness. Fed ex CEO also noted that the speed at which macroeconomic conditions deteriorated surprised the company. On a weekly basis, SPX was down 4.8% and Nasdaq Index more than 5.5% thus making this the worst week for both the indices since June 2022.
- US 2-year Treasury yields briefly touched cycle highs of 3.92% on an intraday basis but retreated slightly in the 2nd half of the session to close almost unchanged on the day at 3.86%. 2s10s part of the curve continues to trade at extreme levels and is currently sitting at -ve 42bps. Gold continues to suffer as well with rising real yields and strong dollar both acting as headwinds for the yellow metal.
Be nimble! Have a great week ahead.
