Beyond Markets

The economy is evolving in a way that no one expected – none of the January real data hints at the recession lead indicators are showing; in fact the real data has been very strong. With the 2-year treasury back at 4.7%, just below its November high of 4.8%, risk free assets are giving stocks a run for their money.

If bond yields continue to rise, stocks will give up all their gains. If bond yields go down, stocks will go up. It all hinges on inflation. Gas prices down 50% tell us February’s inflation will be down over January. The Cleveland Fed’s CPI Nowcast predicts February CPI inflation at 6.2% year/year, down from 6.4% in January. But 3 weeks between now and the release of that number is a long time to wait for a market that’s becoming impatient.
 
Already in fact it looks like yields are close to turning back down, to judge by the benchmark, the 10 year yield, which tried to breach the 4% level yesterday and failed.

In this episode, Mark Matthews Head Research Asia at Julius Baer opines about Inflation, our take on it, and our outlook for markets.

What is Beyond Markets?

“Beyond Markets” by Julius Baer is a series featuring conversations with experts to share recent market developments, key insights, and strategic inputs from around the globe. In each episode, we cut through the noise to offer practical advice and macro research on today’s shifting economic and market landscape.
The information contained in this podcast is marketing material. Opinions expressed do not constitute independent financial/investment research, investment advice, or an offer to buy or sell securities by Julius Baer. Please refer to www.juliusbaer.com/legal/podcasts for important legal information prior to listening to this podcast.