Luca Paolini, chief strategist at Pictet Asset Management, flags up the big events this week which might impact investment and trading events , including a misjudgement on inflation; the property market in China; leverage in aspects of the government bond market, and a misalignment of housing data expectations in the US; plus the timing of weakening economic data.
• Equities ticking up. cost of liquidity is range bound.
• Fixed income volumes up on last year and up on last month
• Data: US Inflation, PPI and retail data, with big quarterly reports in retail and tech/telco.
• Primary Equities: 6 IPOs expected at $92.6 million. The biggest deal expected is DDC Enterprises.
• US axe data saw a very slight shift towards dealers asking more than bidding.
Europe and the UK
• Equities volumes still subdued for the year and down relative to November 2022. Euro investment grade volumes still up, and bid-ask spreads are tight relative to this period last year.
• Data: EU and Germany sentiment data, inflation figures across several countries including France, Italy and UK, UK unemployment and retail figures released.
• Primary equities: No IPOs expected.
• EU axe data showed a 13% shift from bids to asks last week, but within normal ranges.
• GBP axe data showed slight increase in net buying versus selling of credit.