The optimism about the health of the global and US economy appears unbroken. A Fed rate cut in September is fully priced in with a split of 25%/75% for 50bps/25bps, the CME FedWatch tool implies. Equities are rallying. The Nasdaq Composite Index gained 14% since the early August low including yesterday’s advance of 1.39%.
Last week was something of topsy turvy one. Eventually, and unlike the wider suite, the oil market was not able to extract itself from being besotted by the Middle East, at times pushed on by the hope in equities, only to be finally sat down in an unchanged fashion by China.
The last of the week's most important data yesterday was good news and greeted as so. Unlike most contemporary readings in which data that miss expectations are happily seized upon as bullish mana, as all investor tourists believe time and again that this will be 'the one' that the Fed will not be able to ignore and impelled to cut interest rates.
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