In the World


Market sees recession: 2/10 year US bond curve inverted by more than one percentage point for first time in 40 years

Ana Racionero (Intermoney) | A Fed rate hike to 6%, a level whose risks have long been hedged in the options market, is starting to look less and less far-fetched. Powell’s appearance before the Senate yesterday unleashed a tsunami that sent bonds on both sides of the Atlantic tumbling, causing traders to recalibrate rate levels. The swap market raised the interest rate for the Fed’s September meeting to 5.60% and,…

Bonds and pricing

Fixed income outlook: harnessing a higher for longer conviction

By Franck Dixmier, Global CIO Fixed Income, AllianzGI | A shifting outlook for inflation, interest rates and economic growth is creating a complex market environment. But we think investors may now be starting to come around to our belief that interest rates are likely to have to stay higher for longer to tame sticky inflation. With the prospect of further near-term market instability, investors may want to consider remaining flexible…

Xi Jinping

China’s 2023 Government Work Report: Safe growth target contrasts with bold employment objective

Alicia García Herrero (Natixis) | Against the backdrop of the recent reopening after three years of zero-Covid policies, the Chinese government, in the last government report of Prime Minister Li Keqiang during the Two Sessions, has set a GDP growth target of around 5% in 2023. Such a target is lower than our growth forecast of 5.5% for 2023, and lower than last year’s government target (5.5%). This is somewhat…

interest rates

Under the surface, the impact of higher rates is undeniable

Morgan Stanley | Despite the fastest tightening cycle in recent history, US macro has shown signs of strength, leading many investors to perceive the lack of a slowdown as a sign that the economy has been less affected by monetary policy than initially expected. In this sense, E. Z. acknowledges that activity has generally held up well, but under the surface, the impact of higher rates is undeniable. Although factors…

Hong Kong

Hong Kong’s new budget bets on growth to reduce ballooned fiscal deficit

Alicia García Herrero (Natixis) | Hong Kong has experienced three years of recession within the last four. The ripple effect is painful with a persistent fiscal deficit. The recent budget does not change the trend as the fiscal account (excluding bond issuance) will remain in deficit at 3.9% of GDP in FY 23/24, despite an improvement from -7.3% of GDP in FY 22/23. Hong Kong’s fiscal reserves also depleted from…


Danone €959m 2022 profit down 50% on 2021 due to higher raw material prices and partial withdrawal from Russia

Singular Bank : The world’s leading group in the dairy products segment (with a dominant position in Yogurt), in Water and in Infant and Medical Nutrition, has published its results for the last quarter of the year. Like-for-like sales (LFL) rose 7.0%, beating consensus on almost all measures, thanks to an 11.3% rise in prices and despite a 4.4% drop in volume. By business, EDP (Essential Dairy & Plant-based) grew…

eeuu capitolio

US GDP revised downward in Q4: growth came in at +2.7% quarter-on-quarter

Banca March : In the US, Q4 GDP was revised downwards: growth came in at +2.7% quarter-on-quarter annualised vs. +2.9% published in the first estimate. Although GDP continues to show sustained growth, the component reading was weak as this revision was mainly explained by a lower contribution from private consumption that grew by +1.4% quarterly annualised compared to +2.1% previously published. Moving on to other data, in the labour market,…

china central bank

PBOC continues to leave interest rates unchanged with January inflation at 2.1% – lower than other countries

Bankinter : The Central Bank keeps interest rates unchanged. The one-year benchmark stands at 3.65% and the five-year at 4.30%. OPINION: The PBOC is not making any changes, in line with expectations. It is one of the few central banks that maintains an accommodative monetary policy to mitigate the impact of the pandemic, the loss of global momentum, which impacts its exports, and the housing crisis. It is maintaining this…


US Yield curve inverted by almost one point

The unexpected US retail sales data triggered a sharp rise in yields, especially the 2-year UST, which reached almost 4.70%, pushing the inversion of the 2s10s curve above 90 bps for the first time since the early 1980s, and extending expectations of Fed tightening into the summer. The swap market was even discounting an interest rate peak of 5.30% in July.

inflation rises

One step forward, two steps backward for inflation: data starts to look more erratic after first big downward adjustments in late 2022

Santander Corporate & Investment | There are no divisions here, inflation data are undoubtedly starting to look more erratic after the first big downward adjustments at the end of 2022, falls that raised hopes of a pivotal moment for central banks and explained a large part of the unprecedented January rally in the markets. Base effects will be the main ally for much of 2023, but our economists believe that…