Last week was super-busy, and it ended in dramatic fashion, with a strong jobs report and a major market rally.
This week should be quieter, but there are some big stories coming up.
SocGen’s Kit Juckes has the quick preview:
The weekend has been dominated by sport and weather. Four issues stand out for the week ahead: Ben Bernanke’s speech on Wednesday, the UK fall-out from the MPC; China’s teetering economy; and the possibility of a scotch-tape solution to Portugal’s economic crisis.
Ben has a chance of putting a cap on Treasury yields. He must be feeling like the cat who got the cream, with equities holding up while the air comes out of the carry-bubble and Treasuries normalise. But he’s also a very cautious and dovish man. I reckon he will try and perhaps even succeed to calm things down.
If it weren’t for the dramatic spike in rates, then everything would look perfect right now for the Fed. But rising interest rates will matter (or at least seem likely to), at least on the housing recovery front.
Not only are US rates spiking, but the spike comes at a time when both the ECB and the Bank of England are talking about commitments to keep rates low in the future, so the US yield spike sticks out like a sore thumb.
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