Debt ceiling negotiations turned out to be a lot less dramatic than many had anticipated – still to come are congressional votes – but once the smoke clears we’re left facing down the back half of the year with many of the questions investors had in January not much closer to being answered – it looks like we have seen peak headline inflation but core is proving to be stickier than many had anticipated. That has led to a reassessment of the policy outlook for the back half of the year – we discuss updated views on the Fed, BoE, ECB, BoC and RBA. The other side of the story is a buoyant equity market, seemingly impervious to hikes getting priced out. That may be puzzling or frustrating for macro investors but we discuss how the under-owned right tail in equities may signal more pain to come.

Participants:

• Peter Schaffrik (Desk Strategy), Head of UK/European Rates & Economics
• Izaac Brook (Desk Strategy), US Rates Strategy Analyst
• Simon Deeley (Desk Strategy), Canada Rates Strategist
• Robert Thompson (Research), Macro Rates Strategist
• Elsa Lignos (Desk Strategy), Head of FX Strategy
• Amy Wu Silverman (Desk Strategy), Head of Equity Derivatives Strategy

* Research Analyst opinions are their published views, independent of those expressed by Desk Analysts