US Briefing - Monday 09.05
Headlines
  • Putin Blames West For War As UK Says Ukraine Could ‘Break’ Red Army
  • G7 To Phase Out Russian Oil; EU’s Russian Oil Ban Stalled By Hungary
  • Eurozone Investor Morale Slumps, Recession Becoming Visible: Sentix
  • Eurozone’s Long-Stagnating Wages Start To Rise As Cost Of Living Soars
  • ECB’s Rehn Wants A July Rate Hike As Second-Round Effects Seen
  • ECB’s Lagarde Spurns ECB Staff Plea For Pay Rises Linked To Inflation
  • Ex BoE Chief Economist: UK Inflation Crisis Will Last Years, Not Months
  • Treasury Five-Year Yield Climbs To Highest Since September 2008
  • Dollar Hits Two-Decade High Amid Rising US Rates, War, Lockdowns
  • Bitcoin Falls To Lowest Since January, In Line With Tumbling Stock Markets
  • Nasdaq Futures Slide 2% As Higher Yields Pressure Growth Stocks
Commentary
Putin Tries To Justify Ukraine Invasion In Victory Day Speech

Russian President Vladimir Putin railed against NATO as he spent much of his Victory Day speech in Moscow on Monday trying to justify his troops' invasion of Ukraine, per multiple reports.

 

What he's saying: In his speech for Victory Day, an annual commemoration of the Soviet Union's defeat of the Nazis in World War II, Putin did acknowledge the loss of Russian troops in Ukraine, the BBC reports. "The death of every soldier and officer is painful for us," he said, pledging to do "everything" to help bereaved families.

 

Putin also accused the West of "preparing for the invasion of our land, including Crimea," which his forces annexed from Ukraine in 2014, per Sky News.

(Axios - Continue Reading)

Markets Must Face Up To Tightening Financial Conditions

Already sitting on double-digit losses this year, stock market investors must brace for more, as the realisation sinks in that the U.S. Federal Reserve intends to tighten financial conditions to get on top of red-hot inflation.

 

Essentially, financial conditions measure how easily households and businesses can access credit, so are critical in showing how monetary policy transmits to the economy. Fed boss Jerome Powell repeated on Wednesday he will be keeping a close eye on them.

 

And they have a bearing on future growth - Goldman Sachs estimates a 100 basis-point tightening in its proprietary financial conditions index (FCI) - which factors in rates, credit and equity levels as well as the dollar - crimps growth by one percentage point over the following year.

(Reuters - Continue Reading)

Goldman Sees Stocks Downside Even If Recession Avoided

The outlook for US stocks isn’t particularly bright, even if an outright recession is avoided, according to Goldman Sachs Group Inc. strategists. 

 

“The best case scenario for the economy -- and, eventually, for equity prices -- probably involves a continued period of constrained equity market returns,” the strategists led by David Kostin wrote in a note to clients. “Risks around equity valuations are skewed to the downside even in our base-case, non-recessionary scenario.”

 

The S&P 500 capped its fifth week of declines on Friday, the longest such streak since June 2011, and US futures on Monday signalled the drop may extend. The benchmark has fallen more than 13% this year as record inflation readings, a slowing economy and aggressive tightening by the Federal Reserve to tame soaring prices have weighed on risk appetite and valuations. 

(Bloomberg - Continue Reading)

Majority Of FX Traders See Euro-Dollar Parity In Survey

Foreign-exchange traders are set to bludgeon the euro anew as the war in Ukraine and the supply-chain crisis ramp up stagflation risk -- driving the single currency to parity versus the dollar for the first time in nearly two decades.

 

In the view of 60% of respondents to the latest MLIV Pulse survey, the euro will eventually end up level with the greenback, with a small majority of more than 400 participants betting it will then recover to $1.15. It traded at about $1.05 on Friday, near its weakest since early 2017.

 

Yet it’s a close call. Some 48% of those polled, who include economists and portfolio managers, project fresh losses to $0.95 -- a notably more bearish outlook than Wall Street investment banks.

(Bloomberg - Continue Reading)

German ZEW Investor Confidence Expected To Fall Again

The latest poll of financial market experts conducted by Germany’s ZEW economics institute is forecast to show further concern about Europe’s largest economy. 

 

The forward-looking economic sentiment index – a gauge of the next six months – is projected to slip to -42.5 in May from -41.0 last month, according to economists. The current conditions index is expected to take more of a hit with a drop to -35.0 from -30.8. 

 

But the ZEW gauges of investor morale could be headed down even further than expected. The latest report from pollster Sentix released Monday showed its German economic index drop for a third straight month in April to its lowest level in more than two years. The expectations component of the index fell to its lowest mark on record. Sentix’s May expectations reading for the Eurozone dropped to its worst result since December 2008. 

(LiveSquawk - Continue Reading)

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} function join_publisher_channel(data) { var data_array = {}; data_array.type = 'join_publisher_channel'; data_array.publisher_channel = data.publisher_channel; data_array.username = data.username; data_array.subscriber_group = data.subscriber_group; data_array.display_name = data.display_name; data_array.single_sign_on = data.single_sign_on; data_array.remote_ip = data.remote_ip; data_array.http_referrer = data.http_referrer; data_array.current_page = data.current_page; data_array.php_session_id = data.php_session_id; var msg_string = JSON.stringify(data_array); if (socket.readyState == 1) { socket.send(msg_string); } postMessage({action: 'PublisherChannelJoined' }); } function session_static_info(msg) { set_static_session_info(msg.data); start_log(); } function connect_to_distributor(msg) { publisher_channel = msg.data.publisher_channel; remote_ip = msg.data.remote_ip; socket = new WebSocket("wss://ws.livesquawk.com/ws"+distributor_server); socket.onopen = function(event) { request_server_assignment(); }; socket.onmessage = function(event) { var msg_string = event.data.toString(); var data = JSON.parse(msg_string); switch(data.type) { case 'server_assignment_response': server_assignment_response(data); break; } }; } function session_info_interval() { postMessage({action: 'RequestSessionInfo' }); logging_interval = setTimeout(session_info_interval,logging_interval_time); } function server_assignment_response(data) { assigned_server = data.selected_server; socket.close(); connect_to_assigned_server(); } function request_server_assignment() { var data_array = {}; data_array.type = 'request_server_assignment'; var msg_string = JSON.stringify(data_array); if (socket.readyState == 1) { socket.send(msg_string); } } function connect_to_assigned_server() { socket = new WebSocket("wss://ws.livesquawk.com/ws"+assigned_server); socket.onopen = function(event) { postMessage({ action: 'VisibleConsole',console_string: "Connected to server "+assigned_server }); console.log("Connected to server "+assigned_server); 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var msg_string = JSON.stringify(data_array); if (socket.readyState == 1) { socket.send(msg_string); } postMessage({action: 'PlayerChannelJoined' }); playing = true; } function start_log_response(data) { session_info.session_id = data.log_record_id; session_info_interval(); } function application_refresh_start(data) { if (data.app_name == session_info.application_name) { postMessage({action: 'ApplicationRefreshStart' }); } } function application_refresh_stop(data) { if (data.app_name == session_info.application_name) { postMessage({action: 'ApplicationRefreshStop' }); } } function set_static_session_info(data) { session_info.browser_codename = data.browser_codename; session_info.browser_name = data.browser_name; session_info.user_agent = data.user_agent; session_info.browser_version = data.browser_version; session_info.cookies_enabled = data.cookies_enabled; session_info.platform = data.platform; session_info.player_version = data.player_version; session_info.stream = data.stream; session_info.connection_protocol = data.protocol; session_info.delay_target = data.delay_target; session_info.session_email = data.session_email; session_info.remote_ip = data.remote_ip; session_info.php_session_id = data.php_session_id; session_info.application_name = data.application_name; session_info.http_referrer = data.http_referrer; } function start_log() { var session_start_date = new Date(); session_start_time = session_start_date.getTime(); var months = ['Jan','Feb','Mar','Apr','May','Jun','Jul','Aug','Sep','Oct','Nov','Dec']; var session_start_date_string = session_start_date.getDate() + " " + months[session_start_date.getMonth()] + " " + session_start_date.getFullYear(); var data_array = {}; data_array.type = 'webrtc_start_log'; data_array.remote_ip = session_info.remote_ip; data_array.username = session_info.session_email; data_array.php_session_id = session_info.php_session_id; data_array.webrtc_protocol = ''; data_array.session_start_time = (session_start_time/1000).toFixed(0); data_array.stream_name = session_info.stream; data_array.session_start_date = session_start_date_string; var msg_string = JSON.stringify(data_array); if (socket.readyState == 1) { socket.send(msg_string); } } function update_session_info(data) { var data_array = {}; var msg_string = ''; var current_date = new Date(); var current_time = current_date.getTime(); session_info.protocol = data.protocol; session_info.curr_delay = (data.effective_latency / 1000).toFixed(2); session_info.session_length = current_time - session_start_time; session_info.ping_time = data.ping_time; session_info.jitter = data.jitter; session_info.packet_loss = data.packet_loss; session_info.effective_latency = data.effective_latency; session_info.mean_opinion_score = data.mean_opinion_score; session_info.restarts = data.restarts; if (socket_emits == 0) { data_array = {}; data_array.type = 'webrtc_log_data_full'; data_array.connection_protocol = session_info.protocol; data_array.threshold = 0; data_array.curr_delay = session_info.curr_delay; data_array.session_length = session_info.session_length; data_array.date = current_time; data_array.browser_codename = session_info.browser_codename; data_array.browser_name = session_info.browser_name; data_array.user_agent = session_info.user_agent; data_array.browser_version = session_info.browser_version; data_array.cookies_enabled = session_info.cookies_enabled; data_array.platform = session_info.platform; data_array.player_version = session_info.player_version; data_array.stream = session_info.stream; data_array.restarts = session_info.restarts; data_array.delay_target = 0; data_array.op_sys = ''; data_array.flash_version = ''; data_array.remote_ip = session_info.remote_ip; data_array.http_referrer = session_info.http_referrer; data_array.php_session_id = session_info.php_session_id; data_array.user_email = session_info.session_email; data_array.webrtc_protocol = session_info.protocol; data_array.ping_time = session_info.ping_time; data_array.jitter = session_info.jitter; data_array.packet_loss = session_info.packet_loss; data_array.effective_latency = session_info.effective_latency; data_array.mean_opinion_score = session_info.mean_opinion_score; data_array.session_id = session_info.session_id; msg_string = JSON.stringify(data_array); if (socket.readyState == 1) { socket.send(msg_string); } } else { data_array = {}; data_array.type = 'webrtc_log_data'; data_array.session_id = session_info.session_id; data_array.php_session_id = session_info.php_session_id; data_array.connection_protocol = session_info.protocol; data_array.restarts = session_info.restarts; data_array.threshold = 0; data_array.curr_delay = session_info.curr_delay; data_array.session_length = session_info.session_length; data_array.date = current_time; data_array.webrtc_protocol = session_info.protocol; data_array.ping_time = session_info.ping_time; data_array.jitter = session_info.jitter; data_array.packet_loss = session_info.packet_loss; data_array.effective_latency = session_info.effective_latency; data_array.mean_opinion_score = session_info.mean_opinion_score; data_array.stream = session_info.stream; msg_string = JSON.stringify(data_array); if (socket.readyState == 1) { socket.send(msg_string); } } socket_emits++; if (socket_emits == 100) { socket_emits = 0; } }