Back to school

There have been two weeks this year that have reminded me of the Dallas TV series in 1986 where Pam Ewing wakes up from a dream at the end of a ratings flop of a series to find Bobby Ewing in the shower and that his death (and the death of the entire series) was just a bad dream. The first such week was the one immediately after the GameStop saga. After being the most talked about financial story in the world for a few days it was hardly mentioned the week after. Fast forward to last week, a furor over rising yields and weak equity markets, risk exploded higher and forgot all possible troubles. I can’t help but think these big events will be a regular feature of this year as the forces in both directions continue to be huge and prone to sparking volatility.

By the way, all UK schools will re-open from today. Fingers crossed for a steady journey towards normality.


Everything points to a policy hike on March 18 in my view – 90% probability. •nly question whether Agbal just does 100bps or goes full Monty to 20%. Nice round number. I think this because: Since the last hike on Dec 24, inflation is 160bps higher. Inflation in the last two prints has come out at the top end of the CBRT forecast control range, so might only peak at 17-18%, not 14% on the current monetary policy setting. Most inflation drivers seem to be heading higher: food, energy, metals and commodity imports, durable goods…Interest rates are simply not high enough to compensate for people’s actual inflation perceptions. Agbal tried forward guidance at the last two MPC meetings, but that does not really work when Erdogan can fire him at any moment. He has to deliver up front policy tightening, and hold policy tight for an extended period of time, to change expectations.

– Timothy Ash, strategist, Bluebay, March 3

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