060 - Market and central banks at odds

<ul> <li>Fed raised by 50bps. Less aggressive, but higher TR upped to 5.1 (4.6). Fed chair was hawkish.</li> <li>ECB even more hawkish than Fed. 50bps ongoing and QT announced. Hawkish ECB is a more convincing case — more ground to cover, but more difficult to deliver because of the fractious nature of the bank.</li> <li>BoE delivered 50 bps and was the least hawkish of the three. There was a three-way split: 0, 50bps, 75bps.</li> <li>There is a disconnect between the banks and the market. Market’s expect cuts in H2 2023. Fed dismisses this.</li> <li>Data is confusing and ambiguous. Services PMI beat to the upside, but industrial production and retail sales were both down (weak). CPI also showed signs of moderating.</li> </ul> <p>This week:</p> <ul> <li>BoJ — some reports suggesting an announcement regarding the 2% inflation target. CPI out as well (Fri).</li> <li>CPI Canada - Wed.</li> <li>US PCE data on Friday. May take lead from CPI and moderate.</li> <li>Final GDP on Thurs q/q 2.9% (US), -0.2% (UK).</li> </ul>