US earnings

Arlan Suderman says that markets bounced on news of an anticipated 25 basis point rate hike, but the Fed will no doubt be criticized by some market observers for its caution if inflation takes hold. The central bank suggested an end to rate hikes is near by removing a line from its statement about "ongoing increases."

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Suderman Says that this may be one of the most pivotal meetings of Jerome Powell’s tenure as Chairman of the Federal Reserve. The Federal Open Market Committee (FOMC) will discuss whether to stay the course with its monetary tightening at a time when confidence in the nation’s banking system is being tested. On the other hand, policymakers don’t want to repeat mistakes made in the 1980’s when they cut interest rates too soon, allowing inflation to get a tighter grip on the economy that then required even larger rate hikes to get it under control.

Suderman Says that lingering uneasiness over bank solvency and this week’s Federal Reserve meeting worried traders overnight as Wall Street remains in an overall “risk-off” mode. Banking stocks largely led the way lower on fears of a broader contagion risk within the sector.

Natalie Scott-Gray highlights Indonesia's ‘grand strategy’ to support its domestic refining industries, limiting the export of unprocessed raw materials – most notably nickel – and increasing the shipment of refined products which benefit local industry.

The oil market has been extremely volatile, tracking a volatile equity market. Crude oil was down 5% today, with WTI at $66.45. WTI prices have dropped to their lowest price since December 2021, losing over $14 per barrel in 2 weeks. A long-term bull run is still on the cards. However, current market dynamics point to continued downward pressure on prices.

Suderman says that equity markets fell again today, with bank shares of First Republic and Credit Suisse leading the way lower. Investor focus remains on interest rates and the outside markets, especially now with the Fed meeting next week and expectations for rate hikes scaled back.

Natalie Scott-Gray discusses the importance of Peru’s reopening of key mining corridor after a period of significant political volatility: the countries mines are responsible for 12% of global copper output, or 2.8 million tons in 2023; in addition, Peru produces significant lead, zinc, tin, and silver.

Arlan Suderman argues that payroll numbers were stronger than expected and so bearish for rates, but rising unemployment and trimming wage gains were more encouraging. Tuesday’s CPI number now looks like a tie-breaker for rate hike doves and the hawks, both of which could take some ammunition from the jobs report to argue for rate moves. All eyes on Tuesday’s inflation report.

Analysts Bruno Santos and Isabela Garcia argue that the natural gas market has been one of the most impacted by the war in Ukraine, reshaping global trade flows of the commodity, and causing price volatility.

Arlan Suderman argues that jobs data and the inflation outlook are in focus, with financial markets hoping that today’s signs of weakness will lead the Fed more do be more dovish on interest rate rises. Labor market was weaker than expected, but all eyes are on tomorrow’s key non-farm payroll data – with markets in a jittery mood.

Arlan Suderman argues that Fed Chair Powell left market’s guessing on the path for rate hikes, citing data as the main determinant. Markets were weaker on his testimony, and the dollar continued to be strong, as jobs data continues to point to inflation risks.

Our oil team argue that traders grew cautious yesterday after Jerome Powell’s testimony in Congress triggered a selloff in energy futures. Benchmark West Texas Intermediate (WTI) crude oil price traded down to $76.6 per barrel this week and seem to be stuck in a $70-$80 range this year.

Interest rate fears hit the gold price, with Fed Chairman Powell ramping up rate hike expectations. It’s commonly believed that gold prices have an inverse relationship with interest rates,. On the other hand, continuing geopolitical tensions with respect to Russia and China are supportive of the gold price, a haven in uncertain times.

Arlan Suderman discusses how Testimony by Federal Reserve Chair Jerome Powell spooked financial markets, with stocks and bonds lower and the dollar higher, after he drove interest rate expectations higher for longer, with futures expectations now peaking at 5.75% to 6.00%, and staying high into next year.

Arlan Suderman describes how stocks rallied and Treasury yields held steady, as markets looked ahead to this week’s Congressional testimony from Federal Reserve Chair Jerome Powell for guidance on interest rate policy.

Arlan Suderman comments that bearish inflation data created an even stronger argument for a hawkish monetary policy, Treasury yields rose, the Tech sector was under specific selling pressure, and oil and commodity prices were higher. Generally, equity markets have remained remarkably sanguine in the face of this news.