Interestingly, the easing cycle started in South America and then Chile, while Brazil also cut 50 bps yesterday, more than expected. Later we will also have the BOE’s decision, which is expected to make a difficult choice between a 50 bps increase or perhaps 25 bps with a focus on more quantitative tightening. ![]() Overnight the BOJ implemented its second unscheduled bond buying intervention as the JPY sank again. +189k expected) but let’s not be under any illusions about the NFP: it has long proved to be a poor forecaster. Admittedly, a much higher than expected ADP figure helped the selling pressure on bonds (+324k vs. Currently only Moody’s retains the AAA qualification. Rates were sold, especially on the long end (the 10y) which led to a steepening of the curve again (the 2y10y is now at -77 bps): this is a classic where the movement comes not from a change in the outlook for growth, inflation etc but from a (minimal) ”increase” in country risk. Fitch’s downgrade was a good excuse to sell a probably expensive market and the US100 fell 2.21%. ![]() Market Update – August 3 – 48 sessions later, the BOJ’s weak heart, BOE, AAPL & AMZN await.Ĥ8 sessions: this is how long it has been since the last time the US500 was down more than 1%, on 23 May.
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