HALISTER1: U.S. ECO PREVIEW: Jobless Claims, PPI Due in 5 Minutes

U.S. ECO PREVIEW: Jobless Claims, PPI Due in 5 Minutes

(Bloomberg) -- Following are forecasts for today’s economic releases as compiled by Bloomberg News.
  • PPI 0.1% m/m; range 0% to 0.4% (60 estimates)
  • Core PPI 0.2% m/m; range 0.1% to 0.3% (52 estimates)
  • Ex trade PPI 0.2% m/m; range 0% to 0.2% (11 estimates)
  • PPI 2.2% y/y; range 2.2% to 2.4% (25 estimates)
  • Core PPI 2.1% y/y; range 1.9% to 2.2% (24 estimates)
    • “With the primary inflation gauges flattening or trending lower, policy makers may be rethinking their expectations for wages and the general price level. That moves all measures of inflation to the front burner, even the PPI, which tends to be quite volatile since it deals with raw materials and commodities”: Bloomberg Intelligence
    • The prior report showed the PPI rose 0.1 percent in June after showing no change in May
  • Initial Claims 240k; range 235k to 247k (41 estimates)
  • Cont. Claims 1960k; range 1940k to 1968k (7 estimates)
    • “Initial claims have a propensity to fluctuate in the summer months amid annual retooling in the auto industry, and that has been the case in recent weeks”: Bloomberg Intelligence
    • The prior report showed jobless claims declined by 5,000 in the week ended July 29 to 240,000, close to a four- decade low
To contact the reporters on this story: Jordan Yadoo in Washington at jyadoo@bloomberg.net ; Vincent Del Giudice in Denver at vdelgiudice@bloomberg.net To contact the editors responsible for this story: Alex Tanzi at atanzi@bloomberg.net Kristy Scheuble

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283

HALISTER1: South Korean Volatility Is Largely Resisting Geopolitical Risks

South Korean Volatility Is Largely Resisting Geopolitical Risks

(Bloomberg) -- Implied volatilities in South Korean financial markets remain below long-term averages, highlighting the pricing of an all-out conflict in the peninsula remains remote.
  • Political commentators may warn that this time may be different but markets only price a modest concern with tensions in the region having existed for decades and ultimately blow over
  • Historically, the market rallies back and it has usually rewarded investors to fade negative price moves, resulting in a market reluctant to price excessively, particularly when global volatility is hitting cycle lows
  • KOSPI2 3-month ATM implied volatility closed at 13.7% Thursday after hitting all-time lows of 10% on July 21, and still trades below the 5-year average of 14.1%, highlighting lack of pricing elevated North Korea fears
  • VNKY, short-dated Nikkei 225 volatility, rallied to 16.3% from a 12-year low of 12.2% hit last week while 30-day realized volatility is at 8% after falling to a multi-decade low of 6.8%
  • Downside NKY skew is at multi-year highs, see chart here of 3-month 90%-100% implied vol, which allow investors to structure more favorable downside hedges to take advantage of the steepness ahead of Jackson Hole and autumn U.S. fiscal deadlines
  • Flight-to-quality bid on global core bonds has driven bunds out of a recent trading range, but may ultimately be a short squeeze and see downside skew interest increase on any expectations of fading of tensions and limited near-term fundamental catalysts for further rally, see more here
  • NOTE: Tanvir Sandhu is an interest-rate and derivatives strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice
To contact the reporter on this story: Tanvir Sandhu in London at tsandhu17@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Keith Jenkins

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

To de-activate this alert, click here
To modify this alert, click here

UUID: 7947283