This is a major hurdle for the Fed to look dovish (making a possible December rate cut important again)

Via a Macquarie note Monday, views on what it will take to bring a Federal Open Market Committee (FOMC) rate back to the table, and more.

The bank’s analysts say that given that three consecutive consumer price index reports have shown an upward trend, it will take a significant lack of data this week in the United States to reverse the more hawkish sentiment of the Fed and put an end to the more hawkish attitude of the Fed. The December rate cut is in play:

• Thursday’s US GDP data
• Friday’s US PCE inflation index

One or both must be missing:

• “The hurdle for the Fed to change its tone and be dovish again is a big one, for now”

On stocks, Macquarie highlights “two dynamics at work behind the better tone of global stock markets”

• drop in gold and oil prices
• stability of the dollar rather than a continuous rise

“On the one hand, concern over a regional war spilling over into the Middle East has faded. The move away from a broader conflagration and a return to a shadow war likely explains why U.S. bond yields are higher today.

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There isn’t much respite from the strength of the dollar, but this is what we have: