- After high US inflation hardened expectations for more aggressive federal reserve monetary tightening that could spark a recession, us equity futures declined along with markets in Europe and the dollar resumed its ascent on Thursday.
- In anticipation of the US second-quarter earnings season, which was launched on Thursday by JPMorgan and Morgan Stanley, the S&P 500 and NASDAQ 100 contracts declined by more than 1% apiece. The dollar increased and has been trading near its best level in more than two years. Treasury rates increased, with two-year maturities leading the way as they are more responsive to impending Fed moves. The two-year to 10-year yield inversion, a possible recession predictor, is at its deepest level since 2000.
- After the US consumer price gauge registered a 9.1% annual increase, traders have switched toward anticipating a historic one percentage point fed interest rate hike later this month. President of the Fed Bank of Atlanta Raphael Bostic stated that "everything is on the table" to counteract price pressures.
- Euro zone money markets price in 95 bps of hikes by September, up from 84 bps on Monday.
- Euro zone money markets now price in over 50% chance of 50 bps ECB rate hike in September.
- US Treasury Secretary Yellen: Price-cap plan would put downward pressure on CPI.
- Traders see 175bps BOE hikes by year-end, the first time in 3 weeks.
