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From Bloomberg macro commentator Chris Anstey

Currency moves can be "brutal," as the European Central Bank well knows, since then-ECB President Jean-Claude Trichet used that memorable adjective more than a decade ago. The problem for the ECB is it may be heading down a dark alley where two well-armed peers await.

Investors have reasonable clarity about the medium-term policy outlook for the U.S. Federal Reserve and Bank of Japan, with both central banks effectively anchoring long-term rates.

After this week's hawkish central banker whirlwind, traders and analysts were keenly looking forward to today's Eurozone June inflation print to see if it would validate Draghi's unexpected hawkish pivot; the data was released on Friday morning by Eurostat, and while dropping from May's 1.4% headline print to 1.3%, it beat the 1.2% consensus expectations, rising 1.3%. The core print of 1.1% excl. energy, food, alcohol and tobacco likewise beat estimates of 1.0%, and was above May's 0.9%.

Chart courtesy of Schuldensuehner

As the global equity research market continues to wrestle with how they will comply with the European Union's MiFID II regulations, we noted a new study from McKinsey & Co. last week which effectively predicted that investment banks will have no choice but to fire a ton of equity research analysts who write a bunch of stuff that no one ever reads...which seems like a reasonable guess.

Validating the recent surge in iron ore, which has jumped more than 18% from 2017 lows hit just two weeks ago on speculation the PBOC may be willing to flirt with another round of inflation, overnight Beijing reported an unexpectedly strong bounce in its manufacturing and service sectors. 

One of the recurring laments about the Fed's hiking cycle, most recently from Goldman, is that despite 2 rate hikes so far this year, financial conditions remain the loosest they have been in over two years.Whether that is due to the market being so drunk on the Fed's "punch bowl" it is unable to grasp the liquidity is being dragged away, or for some other unknown reason despite repeated warnings by FOMC members that stocks here are overvalued, markets simply refuse to concede that financial conditions should be tighter, in fact, as Goldman observed yesterday "so far, the Fed’s efforts to t