Market Insights Podcast (Episode 349)

Recession watch

Senior Market Analyst Jeffrey Halley talks about news impacting the market and the week ahead.

In this week’s episode, Jeffrey Halley is filling in for a holidaying Craig Erlam. Market volatility continues to percolate at boiling point as asset markets try to price in a recession, or not! We start with the political situation in London with Tory ministers resigning in droves. Will Prime Minister Johnson survive and has it affected the pound, or does it even matter. Jeffrey looks at the technical picture before moving to the Euro which plummeted yesterday on recession fears. The sell-off continues today and the technical picture suggests parity to the US Dollar is upon us. In contract European equities are rallying impressively, unwinding the sell-off of yesterday. The culprit? Norwegian oil workers. Jeff explains.

From there it’s over to the United States where markets are very noisy as well. Recession is the word on everyone’s lips, and US bond yields toppled overnight, with the yield curve slightly inverted and US 10-year yields back to 2.80%. Meanwhile, the US Dollar is seeing massive haven inflows allowing it to trample across the forex markets. Meanwhile, oil prices continue to fall, down over 5.0% today and Brent crude is officially below $100 a barrel!

Still, the US data remains contradictory. We look at tonight’s JOLTs Job openings and S&P Global and ISM Non-Manufacturing PMIs, which have surprised to the upside. Is a recession locked and loaded? Jeffrey isn’t so sure yet, but oil markets are saying that today as well. Perhaps the US Non-Farm Payrolls can help answer the question on Friday, and a discussion of that data rounds out today’s podcast.

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