Moving Markets

In just one week, the US Federal Reserve, the Bank of England and the Bank of Japan all chose to hold interest rates steady, yet none of the decisions were unanimous, and of course, the Fed's new Chair is now steering away from forward guidance altogether. With investors left to navigate rates without the usual signposts, what should they make of this week's decisions, and what comes next?
In this episode of The View Beyond, Bernadette Anderko sits down with David Kohl, Chief Economist at Julius Baer, to unpack the week's central bank decisions. They discuss why the Fed held rates despite markets anticipating a hike, the bond market volatility and dollar weakness that followed Kevin Warsh's press conference, and the outlook for Fed policy into year end. The conversation also covers the Bank of England's split vote and UK rate expectations amid a new political backdrop, as well as examining the Bank of Japan's decision to hold rates while signalling a more hawkish shift alongside yen intervention. Finally, David also offers his insights into why he believes that the ECB will not hike rates at their September meeting.

(00:00) - Introduction

(01:04) - The Fed's decision not to hike rates

(03:00) - Bond market reaction and Kevin Warsh's communication style

(05:34) - Outlook for Fed rate expectations

(07:46) - The Bank of England's split decision

(09:18) - UK rate expectations amid political change

(11:21) - The Bank of Japan holds rates and hints at hikes

(15:15) - Expectations for the ECB

(17:24) - Closing remarks

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US stocks staged a rally yesterday following Wednesday’s post-Fed sell-off. Microsoft and semiconductors definitely helped to drive the gains. And the pattern continued in Asia this morning with South Korea’s Kospi up 18% in its session. Central banks in the UK and Japan cemented a week of no moves – although their messaging about the future path of rates diverged. Tim Gagie, Head of FX Advisory in Geneva, joins today’s podcast to share why he thinks interventions in currency markets are a waste of money and time and he also provides some useful insights into this week’s dollar and yen moves.

(00:00) - Introduction: Helen Freer, Product & Investment Content

(00:28) - Markets wrap-up: Bernadette Anderko, Product & Investment Content

(06:36) - FX & metals update: Tim Gagie, Head of FX/PM PB Geneva

(10:30) - Closing remarks: Helen Freer, Product & Investment Content

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Markets reacted sharply after a divided US Federal Reserve opted to leave interest rates unchanged yesterday. The decision triggered a notable steepening of the Treasury yield curve, with 2-year yields edging lower while 30-year yields moved materially higher. US equities also came under pressure, with major stock indices posting significant declines. However, sentiment improved after the closing bell when despite Meta disappointing investors with weaker profit results, Microsoft reported stronger-than-expected earnings. In today's episode, Afonso Borges from our Fixed Income Research team unpacks the Fed's latest decision, explains the market reaction, and discusses what it could mean for investors in the months ahead.

(00:00) - Introduction: Bernadette Anderko, Product & Investment Content

(00:45) - Markets wrap-up: Roman Canziani, Head of Product & Investment Content

(06:29) - Analysis of FOMC meeting: Afonso Borges, Fixed Income Research

(12:24) - Closing remarks: Bernadette Anderko, Product & Investment Content

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A sharp market rotation took centre stage on Tuesday as investors moved out of chipmakers and into healthcare and financial stocks, pushing both sectors to fresh record highs. Even blockbuster results from AI memory leader SK Hynix failed to ease concerns, extending the sell-off in semiconductor stocks ahead of a crucial week for Big Tech earnings. With the Federal Reserve set to announce its latest interest rate decision today, markets are bracing for the next major catalyst. Dario Messi, Head of Fixed Income Research, shares his expectations for the Fed’s decision and what it could mean for investors. We also speak with Mathieu Racheter, Head of Equity Strategy Research, for the latest insights into the Q2 earnings season.

(00:00) - Introduction: Lucija Caculovic, Product & Investment Content

(00:38) - Markets wrap-up: Jan Bopp, Product & Investment Content

(07:20) - Fed preview: Dario Messi, Head of Fixed Income

(11:07) - Q2 earnings season: Mathieu Racheter, Head of Equity Strategy

(16:04) - Closing remarks: Lucija Caculovic, Product & Investment Content

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Middle East tensions remain elevated despite a pause in US air strikes on Iran, which seems to have held overnight. European markets were flat overall yesterday, with the German DAX outperforming the other major indices. US markets were mixed as falling oil prices supported sentiment, but concerns over geopolitics and tech valuations weighed on semiconductor stocks. Asian technology shares are sliding today; South Korea's Kospi is the worst-performing index in the region, down nearly 11%. Investors are now focused on the Fed meeting that concludes tomorrow and major earnings releases from Microsoft, Meta, Amazon, and Apple later this week. Dr. Damien Ng, Next Generation research analyst, also joins the show today to talk about what the growing focus on gut health means from an investment perspective.

(00:00) - Introduction: Roman Canziani, Head of Product & Investment Content

(00:38) - Markets wrap-up: Helen Freer, Product & Investment Content

(06:46) - Gut health matters: Damien Ng, Next Generation Research

(15:03) - Closing remarks: Roman Canziani, Head of Product & Investment Content

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