Inside Markets — Busy Week
Yesterday’s recovery in US equities was primarily driven by short covering into a busy week of earnings.
Inside Markets — Oversold Rebound
Last week’s ~3% decline in the SPX followed a ~12bp backup in 10-year yields amid an upside retail sales print and more hawkish Fed messaging.
Inside Markets — New Phase
We entered a new phase in markets when 2-year Treasury yields broke above 4.80%. This was the level we identified as significant in our March 14th edition of Inside Markets.
Inside Markets — Hawkish Pivot
Monday’s upside retail sales number (proxy for GDP growth) combined with three consecutive hot CPI prints are now driving increased concern that the Fed will have to make a hawkish pivot sometime in Q3 or Q4.
Inside Markets — Commodities
The relatively muted reaction in commodities means that geopolitical headlines had little to do with yesterday’s sell off in equity markets.
Inside Markets — Realized Equity Volatility
US equities begin the week lower as investors digest the weekend’s geopolitical developments in the Middle East.
Inside Markets — Hotter-than-expected
US equities are broadly lower after a hotter-than-expected CPI print.
Inside Markets — CPI Print
Option pricing implies a 1.3% (+/-) move following tomorrow’s CPI print. Consensus is looking for a +0.3% MoM increase in headline and core CPI.
Inside Markets — CPI Scenarios
Wednesday’s CPI report is the most important near-term catalyst, with consensus is looking for headline MoM CPI to come in at +0.3%, which would put the YoY rate at +3.4%, up from +3.2% in February. The street is also looking for a core rate of
Inside Markets — Small Spike in Equity Volatility
The intraday sell-off in equity markets yesterday started with a spike in crude prices, which led to a small spike in equity volatility.