Americans, as they struggle with the meaning of the Fed’s terms “transitory” and “temporary,” expect that inflation one year from now will rise to 5.7%, The Fed keeps saying in its FOMC statements that it wants “longer‑term inflation expectations” to remain “well anchored” at 2%. And they’re now totally unanchored and spiking to high heaven.
Record number of people are quitting jobs, especially in the private sector. This has led to an overheated job market. Companies have to compete to fill positions by offering attractive bonuses, packages, and other perks. As many as 4.2 mn people left their jobs in September. Parallely we also have increasing job openings and vacant job profiles competing for top talent.
Recent central bank meetings show policymakers are having difficulty clarifying some of the confusion around their response to the powerful economic restart. The restart dynamics are distinct from a typical business cycle recovery – and supply/demand mismatches would lead to higher inflation. There are broadly 2 types of central banks right now: those that are comfortable with the recovery-led inflation and others that are confused about the inflation control mechanism and its thwarting impact on the ongoing pullback.
Chinese growth has hit lower bounds after an exquisite runup for consecutive quarters to outperform global peers. I expect loosening in monetary, fiscal, and regulatory policies. This makes Chinese equity and debt relatively attractive and poised to grow in the next couple of months.
Japan's Prime Minister Kishida has talked about a new capitalist model, and a report was released that may anticipate the large fiscal stimulus package expected before the end of the month. It will emphasize digital, green, and chip technology.
The divergence in volatility between Equity and Fixed Income markets has grown prominent in recent weeks, as stocks have powdered to fresh all-time highs. The ratio between The MOVE Index and the Chicago Board of Options Exchange (CBOE) Volatility Index (VIX) is now hovering near the lowest level since February 2020.
November 8th 2021 was the “SOFR First” initiative for interdealer markets in USD Swaptions. This means that USD Swaption traders have only been able to trade SOFR Swaptions as physically-settled products so far this week, which is different to previous market standards that were cash-settled.
Super low interest rates for such a long period in India has led to pent up demand and large scale domestic and foreign investments in the country. Analysts say that even after scaling back the pandemic support wouldn’t really thwart the current upswing in economic activity. Thus India is poised to lead the emerging nations and attract stockpiles in cash from foreign investors
A rising trend of share buybacks has made corporations the real whales of the Japanese stock market as the central bank continues to step back from its asset purchase program. Total share buybacks by Japanese companies are on track to top 7 trillion yen.
What were the major agenda highlights at Glasgow Pact Really Matter? Coal Target, China US Deal, Carbon Trading Rules, Methane Pledge, Scrutiny, Cash for Damage, Deforestation, and Banks.
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