Read our market review and find out all about our theme of the week in MyStratWeekly and its podcast with our experts Stéphane Déo, Axel Botte, Aline Goupil-Raguénès and Zouhoure Bousbih.
Summary
Topic of the week: Who will stop the dollar? (Or heading to a Plaza 2.0?)
- The strength of the dollar reflects a significant structural change for energy-dependent economies;
- A global monetary tightening has begun trying to tame the dollar;
- Without China, this new form of coordinated intervention seems futile;
- As long as the energy crisis lasts, the greenback will benefit by penalizing asset classes outside the United States.
Market review: Dust settles at last in the UK
- Kwasi Kwarteng ousted, UK budget to be revamped;
- US inflation still above 8%;
- T-note yields fail to keep above 4%;
- Equity bounce despite mixed bank earnings releases.
Stéphane Déo's podcast
- Inflation seems to be falling in the United States, a good sign?
- Is the rebound in European industrial production in August sustainable?
Chart of the week
The vast majority of the inflation data are pointing to high and persistent inflation. The recent prints in the US and Europe are very much in that vein.
The chart of the week tells a different story. Producer prices inflation in China have declined very quickly. The good news is that this Chinese PPI tends to be a leading indicator of the US one which itself tends to lead the CPI. Patience will be needed, we’re very far from a significant downturn in CPI inflation. But we could see in the next few months, eventually, some pressures on goods starting to recede.
Figure of the week
The Chancellor of the Exchequer Kwasi Kwarteng served in his office during 38 days. The shortest time span in nearly 190 years for a finance minister to leave office alive.
