Daily Agenda: Markets Gird for FOMC, Bank of Japan Decisions

The week will include rate announcements from the Federal Reserve and Bank of Japan, and the conclusion of the G-20 meeting in Beijing, making central bank policy a key topic in coming trading sessions. While there have been many calls for cooperation among policymakers, it’s clear that each central bank’s priorities remain firmly grounded in domestic considerations. In a research note issued today, economists at the European Central Bank concluded that the bank’s quantitative-easing program has worked to stabilize inflation expectations. To date, ECB president Mario Draghi has been tight-lipped about his response if regional growth suffers after theU.K.’s decision to exit the European Union. Separately, in comments to the media in China, Swiss National Bank President Thomas Jordan affirmed that his team is closely monitoring the impact of Bank of England and ECB actions on his economy and reiterated that the Swiss franc remains significantly overvalued.Bank of Japan governor Haruhiko Kurodareiterated to the media over the weekend his willingness to expand stimulus measures while continuing to dismiss the notion of “helicopter money” as a solution. For now, investors are left to ponder which bank will act first if Brexit does create a drag on global demand.

Verizon购买雅虎web assets.Multiple media outlets reported today that Verizon Communications will acquire Yahoo‘s core business units in a deal valued at nearly $5 billion. After the transaction, Yahoo will continue to hold stakes inAlibaba Groupand Yahoo Japan. The combined Verizon and Yahoo digital advertising platform will rank third behind Alphabet (Google) and Facebook.

Julius Baer earnings, assets rise.瑞士富裕经理Julius Baer集团今天发布的前半年财务业绩为期5％，盈利增长率为5％，并在管理层的资产中攀升4％。该期间的银行总收入达到3.62亿瑞士法郎（3.67亿美元）与调整与美国税务机关的规定调整后的3900万法郎。

German business confidence better than forecast.Ifo Institute sentiment data released today revealed a better-than-forecast mood among corporate leaders with the headline index at 108.3 versus a consensus forecast of 107.7. Both expectations and current assessment subindices also registered stronger than expected.

Portfolio Perspective: Equities Float on Global Demand for Yield —Sean Darby, Jefferies

The Standard & Poor’s 500 failed to close on Friday above its record high set in midweek with oil prices weakening but bond proxies firm. “The risk-free rally” stalled on the back of a softened $828 million injection into U.S. investment-grade corporate bonds and a $1.3 billion injection into U.S. non-investment grade high-yield bonds—自2004年以来最大的19周和第二个最重最大的最大值。达到的收益率仍然是贪得无厌的。

从美国股票中有47亿美元的流出，但金融部门继续吸引固体流入。股票市场内的内部动态是多云，波动率较高，同时标准普尔500指数从30年债券中断，但高收益债券价格未能在恒星集会后获得地面。vix曲线陡峭。

The Federal Open Market Committee will hold a two-day meeting on Tuesday and Wednesday. We do not expect the Fed to change rates in either direction. U.S. economic surprise indexes continue to blow off but economic releases remain mixed with July’s Philly Fed index weaker than expected but under the hood in July looks much improved from June, with new orders rising to 11 from -3 and shipments rising to 6.3 from –2.1.

The best analogy we can offer investors on U.S. equities is that they are “floating” like a ship on the global demand for yield, waiting for earnings and growth to reassert themselves. While positioning is skewed towards a deflation scenario, the biggest risk for markets in the short-term is a higher inflation scenario, which would mean much richer real-bond yields.

Sean Darby is chief global equity strategist atJefferiesin Hong Kong.