-Gridlock in the House speaker election is not really fully priced in U.S CDS markets, however default swaps a little higher than during 2016 election for example or covid period >>> bottom line there will be bigger political tensions in the U.S going forward, can't keep printing money and spend for any populist occasions to calm folks locally..!
-China may ease ‘three red lines’ property rules, reopening with HK as of next week
-BoJ actively protecting the new 50bps level >>> ''higher for longer'' will force BoJ's hands again in March/April (probably after their financial year-end), once Kuroda is gone, 1% anyone?
-Fed's Esther George sees rates staying high at least into 2024
-Inflation "is way too high here in the United States....I and the Federal Open Market Committee remain determined to use our policy tools to bring inflation back toward our objective," Bostic said in brief remarks prepared for delivery at the start of a conference at the New Orleans branch of the Atlanta Fed
-U.S homes haven't been this unaffordable since 2007 (when looking at mortgage payments as % of joint medium disposable income) >> similar picture elsewhere
-China will reopen its border with Hong Kong after three years. Beijing will gradually allow cross-border travel beginning on Monday, as it continues to unwind strict covid controls
-Tesla’s sales in China slumped. The EV maker sold 56,000 cars in December, marking a 21% decline from the year prior, as domestic brands like BYD have seen an uptick in business..
-Mercedes is launching a global EV-charging network. The German carmaker plans to build 10,000 charging points spanning across North America, Europe, and China by 2030
-Silvergate plunges after crypto meltdown triggered deposit run
-Citigroup cuts U.S. stocks to ‘underweight’, favours European equities in 2023
Markets :
-NASDAQ struggling still (ARKK and low quality names in particular..), commodities, energy, China/HK doing great, FTSE (mining etc), Europe outperforming vs U.S (FAANG's mainly..) - that's the theme of late 2022 and still the case as we kick-off 2023, BBY is another classic example of the kind of casualties 'higher for longer' will bring in 2023/24
-BOJ Faces Renewed Pressure to Defend New Yield Ceiling. New benchmark note fetched a yield of 0.5% on Thursday. BOJ increased its bond-purchase operations on Friday >>> ''higher for longer''...they will have to go higher by March/April again, when Kuroda goes
-EURO awaiting that CPI data, leaked earlier in the week, meant to be pretty low, lots priced in this view by now, it better be low! Similarly U.S NFP expected to be higher following this week's data
-Week 1 in the new year often/always is week of squeeze of a few consensus trades in place, bonds, USD shorts, USDJPY did not like life sub 130JPY etc (BoJ will go higher but not yet..), commods, CHINA reopening impact is/can be huge, particularly as China keeps swinging with short-term policy U-turn's.. trying to micro manage such a huge economy might not be all that such a great idea ! but markets will swing that's for sure
....essentially they cannot afford higher debt financing anymore... this IS going to be a massive theme in 2023 and 2024 >>> #higherforlonger in rates will impact the weakest balance-sheets
can reshuffle all you want... #higherforlonger matters, debt financing costs !!
have a wonderful Friday and weekend
Team PVM
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