CNY

With real yields storming higher, the dollar is extending its rally this morning, sending the pound, euro and yen tumbling toward multi-decade lows. Global financial conditions are tightening and traders are bailing out of risk-sensitive assets ahead of next week’s Federal Reserve meeting, where policymakers are expected to deliver 75 basis-point hike and guide terminal rate expectations firmly above the 4.25 percent mark. The British pound is plumbing levels last seen in 1985 after a weak retail sales report exacerbated fears of a deep and prolonged recession. The Office for National Statistics said receipts dropped 1.6 percent between July and...

Pondering the unbearable weight of massive rate increases, market participants are downgrading economic growth prospects this morning, lifting the dollar and sending the yield curve deeper into inverted territory. Short-term curves are flattening and the difference between 2- and 30-year Treasury rates — often seen as a measure of long-term growth expectations — has reached levels not seen since 2000 as Tuesday’s inflation data drives investors to ramp up bets on a policy-induced slowdown. American producers cut prices again in August, suggesting that consumer inflation could drop in the months ahead. The producer-price index, released yesterday by the Bureau of...

Markets are extending losses after a protracted August selloff. Hopes for a “soft landing” are fading as central bankers systematically lift terminal rate forecasts and rhetorically demolish odds on a 2023 policy pivot – pushing monetary policy expectations firmly into economically-restrictive territory. Ten-year yields are back at early-June levels, and the two-year Treasury briefly hit 3.5 percent for the first time since 2007 yesterday. Equity futures are down, energy commodities are dropping, and the dollar is grinding higher against its major rivals. The Japanese yen is knocking on levels not seen since 1998 as rising US yields diminish its attractiveness...