Markets Wrap (9–23 August) 

Stocks
Resilient earnings and bets on peaking inflation contributed to an improvement of investor sentiment, but things quickly turned around after several FED official pushed back against the notion that the monetary policy tightening cycle is approaching the end and that interest rates may be cut already in 2023.
S&P 500 July-August 13% advance marks one of the best summer streaks for stocks, but a sharp reversal of market mood and the return of FED hike expectations to June level are signs that this may have been a bear market rally.  

Central Banks 
The Norges Bank, as expected, hiked the key rate by 50 bps (from 1.25% to 1.75%), which had been fully discounted by the market after July inflation figures exceeded expectations by a wide margin (y-o-y CPI 6.8%, core CPI 4.5% versus Bloomberg median forecasts of 6.3% and 3.8%); the Monetary Policy Committee indicated that another increase is likely in September, but did not provide any hints for its size, whereas interest rate futures indicate that 50 bps hike is again in the cards. 

FX
EUR/USD dropped below parity and trades at the lowest level in 20 years (0.993 at the time of writing) amid fears that the European energy crunch may cause a deep economic downturn which will limit the ECB's ability to deliver quantitative tightening given the central bank's recent promise to support peripheral bond markets. 

Macro
Euro area preliminary August PMI indices broadly fell in line with expectations – the industry figure (49.7) settled a tad below the 50 points threshold, whereas services sector metric (50.2) remained slightly above it.
Swedish inflation figures in July were among few downward surprises globally – the y-o-y CPI of 8.5% and CPIF (price growth assuming fixed interest rates) of 8.0% were respectively 0.2 and 0.3 pps below the consensus forecast, with a resulting upside pressure on EUR/SEK. 

Commodities 
The price of natural gas climbed to another end-of-day record level (EUR 276.75/MWh) as the Russian giant Gazprom halted deliveries to Germany for three days citing maintenance works before the supply can resume at 20% of normal capacity; despite Germany's storage sites being 75% full well ahead of the schedule, it is estimated that consumption may need to be cut by 20% in order to avoid rationing in the upcoming winter.  
Saudi officials recently announced that OPEC+ may soon cut the output to address recent price drop driven by macroeconomic risks. 
EU diplomacy chief J. Borrell noted that there are positive things in Iran's proposal on the renewal of the nuclear treaty – the offer is currently being analysed by the US; removal of sanctions on Iran's oil exports would provide a boost to global supply.