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Welcome to issue #37 of fx:macro!
As there hasn't been going on much during the last two weeks, this edition is also just the Review part. The next regular issue with the full macro analysis will be out on the coming weekend.
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Table of Contents
Summary (Playbook, Calendar, Levels, Downloads)Week in Review
Central Banks
Economic Data
Market AnalysisGrowth and InflationYieldsCentral BanksSectors and FlowsSentiment and PositioningMarket RisksVarious
Top 3 Macro Charts of the Week
Week in Review
Central Banks
BOJ Summary of Opinions (28.12.22)
Here are the highlights from the Summary of the last policy meeting:
Confab, Speakers, News
European Central Bank
Schnabel (Neutral). Sat: ECB must be prepared to take the heat and raise rates further including by more than the market expects, whether we still need to go higher will depend on the inflation outlook, focus is on medium-term inflation expectations rather than current readings, sees little risk of raising rates too far given real interest rates are still very low.
Knot (Hawk). Mon: The risk of us doing too little is still the bigger risk we are just at the beginning of the second half of the hiking cycle, the ECB will achieve quite a decent pace of tightening through half-percentage point hikes before a peak by the summer.
Bank of Japan
Kuroda. Mon: Must continue to support the economy with monetary easing, yield band has widened but we will continue with easy monetary policy, 2% inflation target has not yet been achieved sustainably accompanied by wage growth, the BOJ must scrutinize whether changes in corporate price-setting behaviour as seen recently becomes the new norm in Japan.
Kishida. Mon: It is premature to state now whether the joint statement will be revised, it is something for after the new BOJ governor has been decided.
Nakao (ex-MOF). Tue: The BOJ should alter the current easing policy framework as side effects mount, latest BOJ moves have been good and are seen as an effort to reduce burden on the next governor in unwinding monetary stimulus, 2% inflation target may be making monetary policy inflexible.
Economic Data
Monday, 26.12.22
Tuesday, 27.12.22
Wednesday, 28.12.22
Thursday, 29.12.22
Friday, 30.12.22
Top 3 Macro Charts of the Week
This section is brought to you by
:1. Equal- vs. cap-weighted. "It's unusual to see the equal-weighted S&P 500 index outperform the cap-weighted version for an extended period like it is now. The only similar analog is the Dotcom bust".
2. Volatility vs. strength. "Going back 5+ decades, few years have seen as many 1% daily swings as we have had in 2022 & none have seen fewer days with new highs > new lows. 2008 & 1974 were the most similar".
3. Buying conditions. "Buying conditions improved very marginally but home-buying attitudes remain near multi-decade record lows".
Links to relevant central bank releases in previous editions of this newsletter:
Fed
FOMC Statements: 50/2022 | 45/2022 | 39/2022 | 31/2022 FOMC Meeting Minutes: 47/2022 | 42/2022 | 34/2022 | 28/2022 | 25/2022 Crib Sheets: 50/2022 | 37/2022
ECB
Rate Statements: 50/2022 | 44/2022 | 37/2022 | 30/2022 Meeting Minutes: 47/2022 | 35/2022 | 28/2022 | 21/2022 Economic Forecasts: 21/2022 Crib Sheets: 50/2022 | 43/2022 | 36/2022
BOE
Rate Statements: 50/2022 | 45/2022 | 39/2022 | 32/2022 | 25/2022 Financial Stability Reports: 28/2022 Crib Sheets: 50/2022 | 37/2022
RBA
Rate Statements: 50/2022 | 45/2022 | 41/2022 |37/2022 | 32/2022 | 28/2022 Meeting Minutes: 47/2022 | 43/2022 | 39/2022 | 34/2022 | 30/2022 | 26/2022 | 21/2022 Statements on Monetary Policy: 45/2022 | 32/2022 Crib Sheets: 40/2022 Financial Stability Reports: 41/2022
RBNZ
Rate Statements: 47/2022 | 41/2022 | 34/2022 Crib Sheets: 40/2022
BOC
Rate Statements: 50/2022 | 44/2022 | 37/2022 Crib Sheets: 43/2022 | 36/2022
SNB
Rate Statements: 50/2022 | 44/2022 | 39/2022 | 25/2022 Crib Sheets: 50/2022 | 37/2022
BOJ
Rate Statements: 39/2022 | 30/2022 | 25/2022 Summary of Opinions: 46/2022 | 41/2022 | 31/2022 Crib Sheets: 43/2022
Photo credit: DALL-E 2 “End of year fireworks”