Morning Note | Sept 27, 2022

Good Morning!

Markets are up strongly this a, as bond yields and the US dollar are lower.  The US 10-yr yield is off 10 bps following the UK gilts rally (lower British bond yields).  MegaCap Tech names are up more than 1% with strength in Energy and Transports. The day appears to be setting up for a squeezy type of trading session. Commodities are rallying after the Broadcom hit its lowest level in 6 months. Fed’s Evans introduces some dissent in the FOMC saying the Federal Reserve should pause after yields peak in March 2023; if inflation comes down they can adjust rates lower. Evans opens the door to less tightening if conditions improve.

Barclays is recommending not to buy this dip:

Central banks across the world are now having to defend their currencies in addition to fighting inflation. The macro environment this week remains very negative; it’s too early to buy this dip in risk assets.

For those that missed it, yesterday saw a strong reversal in Equities triggered by a spike in yields.