There are developments that we need to keep an eye on if inflation stops being a threat — It is interesting to note that China is now making a big push to boost their growth and stop the rise of unemployment. News that Covid restrictions are being eased could be part of the policy package that is geared towards achieving these objectives. If trade barriers start to be…

Tread carefully — The unravelling of the Terra-Luna stablecoin ecosystem caused a panic sell-off in the cryptocurrency market and even dragged down the stock markets when investors were getting spooked. This may not be the last episode of panic and drama that we will see in the weeks ahead. Typically, when the US…

Stay cautious, and reduce risk until more clarity is achieved — The US April inflation data showed that prices rose at +8.3% when measured against the prices last year, a slower pace than the +8.5% of March, but still higher than market expectations of 8.1%. What this means is that though we may have seen the peak in inflation, it is…

If price pressures should be stronger than feared, then markets will be in for more turbulence and selling pressure — The market is currently in a state of flux. Worries that the US Federal Reserve’s resolve to hike interest rates by 0.50% increments will not be enough to hold price pressures at bay are spooking investors. As such, the US inflation data tonight will determine the direction of markets for…

The key to trading success is survival — The market is now in the grips of a fear and confusion yet to be experienced in many years. What is an investor to do when the US Federal Reserve is hiking interest rates aggressively in an environment of persistently high inflation? For now, the possible cause for a reprieve…

Risk reduction is the order of the day till the dust settles. — After the US Federal Reserve’s decision to raise policy interest by 0.50% …

Risk assets and bonds all rose as risk sentiment improved — With the market fearing the worst, the US Federal Reserve’s interest rate hike of 0.50%, the start of balance sheet reduction and the promise of the possibility of more 0.50% hikes in the “next couple of meetings” provided a much-needed boost of relief for investors. As we wrote yesterday, the…

the Fed may possibly want to strike more cautiously — The market is now priced for a 0.50% interest rate hike in today’s US Federal Reserve’s policy meeting, 3 more consecutive hikes of 0.50% in the next 3 meetings and a 0.25% hike in the remaining 2 meetings this year. This gives a total of 2.50% rise in policy interest…

The Fed may have to choose a path of cautious tightening — Although the White House has dismissed yesterday’s weak economic data (US GDP Annualised Quarter-on-quarter shrinking -1.4% vs expectations of a rise of +1.0%) as due to “technical factors”, it is what it is. You can be sure they would be running a celebratory lap of victory if it was a…