The QT show started less than a year ago. German home prices -11%, ECB assets -19%.
But motor fuel prices plunge, and inflation in durable goods and food cools – same as everywhere.
“The drivers of inflation are changing…. Domestic price pressures, including from rising wages and robust profit margins,” are increasingly important: ECB
All eyes are now on underlying inflation. Forget the collapsing energy prices that pushed down overall CPI.
As China unloaded Treasury securities and Japan propped up the yen, other countries loaded up.
An important thing to keep our eyes on these days.
In other words, after a spike, the dollar dropped back to the higher end of the normal 20-year range. But the yen is a sloppy mess.
Spooked by relentlessly raging inflation in services, ECB puts QT into higher gear.
Bond yields jump as they begin to price in more BOE rate hikes, and higher for longer than previously imagined.
Food Inflation Raged at 19%. But energy prices plunged. In response, UK government bond yields spiked, pricing in higher BOE policy rates.