In today’s briefing:
- CX Daily: Four Things to Know About China’s Plan to Go ‘All-Out’ on Infrastructure
- Stop Fooling Around, J-Pow
- BoE: Carried to Hawkish Rodeo
- M.E.N.A Momentum
CX Daily: Four Things to Know About China’s Plan to Go ‘All-Out’ on Infrastructure
Four things to know about China’s plan to go ‘all-out’ on infrastructure
Did Henan authorities abuse virus controls to stymie swindled bank depositors?
Chart of the Day: China’s record high youth unemployment rate
Stop Fooling Around, J-Pow
- Heading into yesterday’s Fed meeting, the bond market asked a tough question to Powell: do you mean business?
- Powell took a ‘’Bad Cop, Good Cop’’ stance: he answered with a firm ‘’Yes’’ at first, and then tried to soften the message during the press conference.
- This spurred a relief rally in risk assets, but it won’t last.
Bond markets hate half-hearted stances, and they will keep testing the Fed and risk assets until they get what they want: clarity.
BoE: Carried to Hawkish Rodeo
- As widely expected, the BoE delivered a fifth consecutive rate hike to 1.25% in June. Three members dissented for a 50bp move again, despite disappointing activity data.
- Aggressive action elsewhere is hitting GBP, raising UK inflation pressure and pushing the BoE to get more hawkish, albeit less than some market participants expected.
- It no longer looks like the MPC will want to skip a September hike, so we now see the policy rate 25bps higher by Nov-22 at 2%.
M.E.N.A Momentum
- EM Fund managers continue to add to MENA allocations, yet underweights have increased to near record levels.
- Saudi Arabia has been the driver of the recent allocation spike, with the average GEM fund allocation now at 1%
- Fund activity over the last 6-months has favoured Qatar National Bank and Saudi Tadawul Group, with both seeing the percentage of funds invested increase.
Before it’s here, it’s on Smartkarma
