Dorothy

While global equity indices are at or close to all-time highs, DB's Peter Sidorov writes that we’re seeing more challenging August crosswinds playing out in bond markets. Expectations for an imminent Fed rate hike have been pulled back, but this has been accompanied by a significant US curve steepening, with the backdrop of higher oil prices, elevated fiscal deficits, and demand for capital from the AI investment boom putting upward pressure on yields. The resulting long-end sell-off has also been a global affair, with 10yr OAT yields ending last week at their highest level since 2009 and the 30yr bund yields reaching a post-2011 high of 3.73% (see the full weekly recap at the end).

Earnings reports from the two major retailers will show how shoppers are holding up in an era of persistent inflation

Futures are mixed ahead of a big week for major retailers as new questions emerge about the state of the U.S. consumer, a major engine powering the American economy.

The S&P 500 climbed to a fresh record high this week, powered by new data showing inflation is cooling—developments that, together with the previous week’s weak jobs report, further raise the odds the Federal Reserve holds interest rates steady at its next meeting.