Investors were watching for ripple effects from the aborted mutiny in Russia, with some expecting a move into safe havens such as US government bonds and the dollar.

Heavily armed Russian mercenaries withdrew from the southern Russian city of Rostov on Saturday under a deal that halted their rapid advance on Moscow but left unanswered questions about President Vladimir Putin's grip on power.

Early trade in Asia saw oil firmer on the instability in Russia, but currencies and stock and bond futures steady. "(The mutiny) started and stopped when markets were closed, so there's been no instant reaction," said Commonwealth Bank of Australia strategist Joe Capurso in Sydney. (RTRS - Continue Reading) 

On Monday, German managers’ outlook is expected to weaken in line with recent Sentix and ZEW prints. Especially as businesses have had to contend with slow growth and rising borrowing costs.

Economists said the headline business climate index for Germany due Monday from the country’s Ifo economics institute is expected to slip to 90.7 points from 91.7 last month. The expectations component of the index, a measure of the coming six months, is forecast to have weakened slightly to 88.0. This month’s current assessment component is expected to fall to 93.5 from 94.8.

Last month saw both components used to calculate the main reading weaken, with the expectations measure for the coming half year – the main support for the headline rate in recent months – falling for the first time since October. (LiveSquawk - Continue Reading) 

Recession alarms are ringing around Europe’s bond markets, replacing the previous panic over inflation as investors come to terms with the threat to economic growth of increasingly tight monetary policy.

Yield curves from Germany to the UK are now the most inverted in decades as investors pile into long-dated bonds for cover. The euro had its worst week since May and the pound fell on concern the Bank of England risks triggering a contraction. Traders rushed to the safety of the dollar.

A swathe of weak economic data from Germany to France on Friday sealed the shift in focus after the UK’s brutal inflation print and surprise half-point interest rate hike earlier broadcast the threat of stagflation. (BBG - Continue Reading) 

The world’s central banks raced at an extraordinary pace over the past year to cool inflation, but it hasn’t proved enough—yet. Economic growth remains mostly solid and price pressures strong across affluent countries despite sharply higher interest rates.

Why haven’t growth and inflation slowed more? Much of the explanation lies in the pandemic’s weird effects and the time it takes for central-bank rate increases to curb economic activity. Additionally, historically tight labour markets have fuelled wage gains and consumer spending.

First, the unusual nature of the pandemic-induced 2020 recession and the ensuing recovery blunted the normal impacts of rate hikes. In 2020 and 2021, the US and other governments provided trillions of dollars in financial assistance to households that were also saving money as the pandemic interrupted normal spending patterns. (WSJ - Continue Reading)