Westpac Institutional Bank’s Post

#Weekwatch Last week was packed with events that could have put a big dent in investors’ confidence. As it turned out, they cheered the news. UK inflation fell sharply in October to its lowest rate in two years. Consumer prices rose at an annual rate of 4.6%, down from 6.7% the month before. 👉️Read our complete insights here: https://lnkd.in/eG_NhNq6 #markets #financialeducation #financialwellbeing

Markets currently expect the first rate cut at the Fed’s March 19-20 meeting, but only 19% of economists surveyed agree. Roughly a third expect the first rate cut at the April 30-May 1 meeting, and just over a third at the June 11-12 gathering. (WSJ)

🌟 Prediction: Bond market yields have dropped to the lowest levels in more than 3 weeks amidst various market movers. With the upcoming ECB announcement and Friday's jobs report, we can expect continued modest improvements in the market. 📈 General Commentary: - Despite uneventful gains, the bond market saw a positive shift in yields on an interesting day shaped by various factors. - The market's reaction to data such as ADP Employment and Job Openings was subdued, with the most noticeable movement attributable to headlines surrounding NYCB, which ultimately nullified each other out. - Ahead of major announcements and reports, the market exhibited modest but crucial improvements. 🔍 Market Movement Recap: 1. Early gains initiated at 7 am despite sideways to slightly weaker overnight trends, with the 10-year yield down 2.8bps and MBS showing a slight uptick. 2. Minimal reaction to JOLTS data, with the 10-year yield down 4.7bps and MBS up 9 ticks, indicating steady progress. 3. Significant gains occurred post a NYCB circuit breaker, with MBS up 10 ticks and the 10-year yield down 6bps, highlighting unexpected positive momentum. 4. Volatility surrounding NYCB headlines led to fluctuations, although the overall market trend remained positive, with MBS showing a quarter point increase and the 10-year yield down 4.3bps. 🚀 Takeaway: As the bond market continues to navigate through dynamic shifts and external influences, staying informed and observing key market trends can provide valuable insights for investors and stakeholders. Prepare for upcoming announcements and reports, as they are likely to impact market movements and yield further opportunities for growth and investment strategies. #BondMarket #MarketOutlook #FinancialMarkets 📈🔍

JPMorgan Argues High Rates Drive Inflation https://lnkd.in/g4Pg3JVF JPMorgan economists argue that high interest rates are a major driver of inflation. When interest rates are high, people save more and borrow less, reducing economic growth & causing prices to fall. #jpmorgan #inflation #interestrates #economy American CEO Magazine

From our latest Market Outlook. The global monetary easing cycle has finally begun, albeit in a fairly limited and tentative way. The last month has seen both the ECB and Bank of Canada reduce policy rates by 25bps. The FOMC is widely expected to follow in coming months albeit with lingering uncertainty around inflation and growth still making it hard to pinpoint the timing. Inflation is now fundamentally lower, the main question for policy being around the confidence central banks have that it will make a sustained move back to targets over reasonable time frames. Economies are showing varied impacts from policy tightening, most recording slower growth. The US is the main exception here, although we continue to note the wide divergence between different measures of labour market conditions. There are other variations on this general theme as well. In Japan, policy-makers are looking to use the recent inflation burst to end its multi-decade problems with recurring deflation and demand weakness. For China, inflation challenges are minimal compared to the housing and trade-related issues although we remain relatively comfortable that it can deal with these and maintain growth. Australia and New Zealand are still some way from having a more confident view on the move to lower inflation. Both are facing an uncertain situation around productivity that could add a domestic aspect to inflation that takes longer to address. However, both are still expected to be firmly in the easing cycle club by this time next year. For more detailed information see the link below.

Paul Donovan from UBS - this morning's analysis well worth a read/share: The publication of US consumer price inflation forces economists to become used car salespeople and real estate fantasists. Part of the disinflationary trends come from used cars (which most US households will not buy this year) and the fictional owners’ equivalent rent (which no one pays). Disinflation in these categories does not improve the spending power of most consumers. Federal Reserve Chair Powell’s two big policy errors were to elevate the importance of consumer price data, and to stress data dependency. Market expectations about rate cuts in September will thus be influenced by today’s data. Real interest rates justify rate cuts—but a broad range of inflation measures should be used to calculate real rates. Repressive real rates is why the Fed is late, but not disastrously late in cutting rates. UK inflation was a little lower than expected. Energy base effects added to the year-over-year price change, but hotel prices increased more slowly. Household durable goods remain in deflation, and food price inflation is restrained as customers refuse to accept profit-led inflation. Eurozone second quarter economic growth is not normally market moving, as we know the regional data already. French final consumer price inflation is almost never different from the preliminary number.

The franc’s recent surge hasn’t changed economists’ views on the Swiss National Bank’s interest-rate path, even after traders pivoted bets toward more aggressive easing. A majority of respondents in a Bloomberg survey expect just one more quarter-point cut this year, bringing the key rate to 1% next month — an outlook unchanged from July. Eight out of the 21 economists surveyed predict another reduction after that. by Bastian Benrath-Wright Harumi Ichikura #Switzerland

Markets currently expect the first rate cut at the Fed’s March 19-20 meeting, but only 19% of economists surveyed agree. Roughly a third expect the first rate cut at the April 30-May 1 meeting, and just over a third at the June 11-12 gathering. (WSJ)

Welcome to this week’s edition of The Weekly Market Watch, where we give you a quick rundown of last week’s market news in just 7 minutes: 📈 November saw global markets surge on optimism about economic conditions, potential central bank actions, and persistent inflation. Despite midweek hints from the US Federal Reserve, signs of tempered demand led markets to expect unchanged interest rates. Economic challenges persist in Europe, with Germany's low consumer sentiment and a 0.1% contraction in Q3. Eurozone inflation unexpectedly dropped to 2.4%, challenging expectations. Bank of England Governor Andrew Bailey remains cautious, committing to keeping policy restrictive until late 2025. Amid uncertainties and revised growth forecasts, caution is advised in navigating potential market challenges, according to experts. 💲 Facing the cost-of-living crunch? TSB research reveals challenges for young adults and parents supporting their children. As winter approaches, explore tax-free gifting options in the UK—up to £3,000 annually per individual. Discover ways to financially assist your loved ones and navigate tax implications. Read more here: https://lnkd.in/gkTT5Kfa #marketupdate #inflation #interestrates #financialsupport

US consumer confidence fell in February for the first time in four months as Americans’ views deteriorated about the outlook for the economy, the job market and financial conditions. The Conference Board’s gauge of sentiment decreased to 106.7 from a downwardly revised 110.9 a month earlier, data published Tuesday showed. The February reading trailed all estimates in a Bloomberg survey of economists. A measure of expectations dropped to a three-month low, while the gauge of current conditions also slipped. This month’s decline in sentiment interrupts a recent upswing in optimism tied to more sanguine inflation views and a solid job market that have bolstered consumer spending. That resilience is helping to sustain the economic expansion at the same time price pressures ease. To read the full article, visit the link in bio, highlights, or below: https://lnkd.in/gDmxMeva •⁣⁣ •⁣⁣ •⁣⁣ •⁣⁣ •⁣⁣ #CommercialRealEstate #Glendalerealesstate #Lacrascentrealestate #GharibianRealEstateandFinance #SBAloan #MortgagehomeLoan #commercialloans #ResidentialRealEstate #RealestateInvestment #BurbankRealestate #Southerncaliforniarealestate #Sanfernandovalleyrealestate #Sangabrielvalleyrealestate #Glendalehomeloans #Pasadenahomeloans #southercaliforniahomeloans #Ronniegharibian #blueinvestmentcorporation #firsttimehomebuyer #mortgageloanapproval