Inside Markets — Wall of Worry
Yesterday’s hotter than expected core CPI print resulted in higher bond yields, which may have temporarily interrupted the unwinding of a very crowded momentum trade.
Yesterday’s hotter than expected core CPI print resulted in higher bond yields, which may have temporarily interrupted the unwinding of a very crowded momentum trade.
Position squaring and hedging coming into today’s data are being unwound this morning as the CPI print came in ‘no worse than feared.’
The most significant events of the week are still to come with: 1) Powell’s testimony tomorrow and Thursday; 2) ECB policy decision on Thursday; 3) AVGO and MRVL earnings (check on AI optimism) Thursday after the close and; 4) the February Jobs Report on Friday.
The most significant events of the week are still to come with: 1) Powell’s testimony tomorrow and Thursday; 2) ECB policy decision on Thursday; 3) AVGO and MRVL earnings (check on AI optimism) Thursday after the close and; 4) the February Jobs Report on Friday.
On Friday, the cyclically-sensitive RTY managed to close above our technical resistance number of 2070.
US equities are mostly higher with the small cap Russell 2000 (RTY) outperforming large cap indices for a second day.
Markets remain in a holding pattern ahead of tomorrow’s January core PCE print and Friday’s ISM report.
The small-cap, cyclically-sensitive Russell 2000 (RTY) continues to trade beneath key range resistance near ~2070.
OIS markets are now priced for 70bp of rate cuts in CY’24, which is now lower than the 75bp from the Fed’s dot plot
There were no major surprises in yesterday’s release of FOMC meeting minutes, although some note dovish implications from advanced discussions on slowing the pace of QT.