Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Morning Brew July 22 2021
Erik Schafhauser
Senior Relationship Manager
Summary: Drivers today should be the ECB, earnings, the initial jobless claims and of course sentiment.
Good Morning,
Drivers today should be the ECB, earnings, the initial jobless claims and of course sentiment.
Yesterday, the reversal of Mondays sharp move continued with equities and yields rising, the USD gives up ground. The USD Index recedes to 92.75, EURUSD trades 1.1793, Cable rose back aboe the 1.37 to trade 1.3720, Gold lost some ground to 1800 and Silver fell to 25.13 after 25.33.
The three US Indexes rose close to 1% helped by strong earnings. Based on Reuters Data, 88% of the S&P 500 companies that reported so far this season beat expectations. Highlight yesterday was Chipotle Mexican Grill., rising 11% after strong numbers.
Key expectation for the ECB assessed by Christopher Dembik:
- The ECB should maintain a cautiously optimistic outlook for the economic recovery in the eurozone, with the acknowledgement of downside risks posed by the spread of the Delta variant. Our baseline is unchanged: growth and inflation will likely surprise the ECB to the upside in late 2021 and in 2022, as it has done so far this year.
- The ECB could potentially draw a more explicit link between the Asset Purchase Programme (APP), and the new inflation target set at “2%”.
- The ECB should confirm once more that the unconventional monetary measures are becoming conventional
- We think there is a broad agreement the PEPP will run until March 2022. But it is unclear how much support Lagarde will be able to gather to replace the PEPP by a new program whose format, duration and objective have yet to be clearly defined.
U.S. Senate Republicans blocked a move to open debate on Wednesday on a $1.2 trillion bipartisan infrastructure measure
Germany and the US have resolved their disagreement over the Northstream 2 project
The UK wants to change the Brexit agreement with regards to northern Ireland.
Bitcoin gains to 32k after Elon Must said Tesla would most likely restart accepting it as payment.
Local Start Date | Local Time | Country/Region | Relevance | Indicator Name | Period | Reuters Poll |
22 Jul 2021 | 08:00 | Denmark | High | Consumer Confidence | Jul | |
22 Jul 2021 | 08:45 | France | High | Business Climate Mfg | Jul | |
22 Jul 2021 | 13:45 | Euro Zone | High | ECB Refinancing Rate | Jul | 0.00% |
22 Jul 2021 | 13:45 | Euro Zone | High | ECB Deposit Rate | Jul | -0.50% |
22 Jul 2021 | 14:30 | United States | High | Initial Jobless Clm | 12 Jul, w/e | |
22 Jul 2021 | 16:00 | United States | High | Existing Home Sales | Jun | 5.90M |
22 Jul 2021 | 16:00 | Euro Zone | High | Consumer Confid. Flash | Jul | -2.5 |
23 Jul 2021 | 01:00 | Australia | High | Mfg PMI Flash | Jul | |
23 Jul 2021 | 01:00 | Australia | High | Services PMI Flash | Jul | |
23 Jul 2021 | 01:00 | Australia | High | Comp PMI Flash | Jul | |
23 Jul 2021 | 08:00 | United Kingdom | High | Retail Sales MM | Jun | |
23 Jul 2021 | 08:00 | United Kingdom | High | Retail Sales Ex-Fuel MM | Jun | |
23 Jul 2021 | 08:00 | United Kingdom | High | Retail Sales YY | Jun | |
23 Jul 2021 | 09:15 | France | High | Markit Mfg Flash PMI | Jul | |
23 Jul 2021 | 09:15 | France | High | Markit Serv Flash PMI | Jul | |
23 Jul 2021 | 09:15 | France | High | Markit Comp Flash PMI | Jul | |
23 Jul 2021 | 09:30 | Germany | High | Markit Mfg Flash PMI | Jul | 64.2 |
23 Jul 2021 | 09:30 | Germany | High | Markit Service Flash PMI | Jul | 59.5 |
23 Jul 2021 | 09:30 | Germany | High | Markit Comp Flash PMI | Jul | |
23 Jul 2021 | 10:00 | Euro Zone | High | Markit Mfg Flash PMI | Jul | 62.5 |
23 Jul 2021 | 10:00 | Euro Zone | High | Markit Serv Flash PMI | Jul | 59.5 |
23 Jul 2021 | 10:00 | Euro Zone | High | Markit Comp Flash PMI | Jul | 60.1 |
23 Jul 2021 | 10:30 | United Kingdom | High | Flash Composite PMI | Jul | |
23 Jul 2021 | 10:30 | United Kingdom | High | Flash Manufacturing PMI | Jul | |
23 Jul 2021 | 10:30 | United Kingdom | High | Flash Services PMI | Jul | |
23 Jul 2021 | 14:00 | Brazil | High | IPCA-15 Mid-Month CPI | Jul | |
23 Jul 2021 | 14:30 | Canada | High | Retail Sales MM | May | |
23 Jul 2021 | 15:45 | United States | High | Markit Comp Flash PMI | Jul | |
23 Jul 2021 | 15:45 | United States | High | Markit Mfg PMI Flash | Jul | |
23 Jul 2021 | 15:45 | United States | High | Markit Svcs PMI Flash | Jul |
(Refinitiv)
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