Jul 7, 20233 min read

Global yields : 15 y highs / G7 CB's combined balance-sheet down, QT / YCC tweak / HYG! / NFP next

G7 CB's combined balance-sheet : down again in June - this is definitely worth following, global liquidity pool reduced (and credit..)
U.S employment data stronger and ISM services bouncing higher, rates curve pushing further out again >>> USD no higher though, Equity markets have entered the summer (il) liquid time on pretty stretched valuations, and the usual S&P7's also showing toppy signs with AI related stocks, beware out there, the mood can change swiftly, FXland we focus (tactically) on lower CROSSJPY's from here
Fed's Logan says more rate hikes needed amid unexpected economic strength
ECB’s Nagel says rates to stay restrictive for extended period
BoJ Deputy Governor Uchida urged a "balanced decision" on yield curve control and said they will continue it for the time being, while he tempered expectations for a swift adjustment in policy and said there are no plans to change the 2% inflation target, but a tweak in July is possible (following various statements)
The copyright battles against OpenAI have begun. Two authors are suing OpenAI, claiming that ChatGPT has unlawfully digested their books as part of its training data
How Germany is turning to heat pumps to combat climate crisis
Partners Group Appoints New CFO, Executive Team Member
US National Debt has increased $935 billion since the debt ceiling was suspended last month
Goldman Sachs downgraded shares of several top Chinese lenders, citing the risk of losses and saying their exposure to local government debt threatens to weaken earnings growth and put capital accumulation and dividends under pressure
Twitter is threatening to sue Meta for hiring dozens of former Twitter employees to build a "copycat"

Markets :

QT (reduction of CB balance-sheet) and and super strong macro data in the U.S still. pushing global yields to 15 year highs, 10y UST +4% and 2y +5%, pushing those 'cuts' further down the curve
FXland, as mentioned yesterday both risk and CROSSJPY's took a little tumble, after a very strong rally in Q3, particularly June (into quarter-end), look to establish tactical shorts there
NQ : would seriously keep an exe on momentum there, ARKK, weak balance-sheets and so on - higher for longer rates will impact, expect pressure on PE multiples from here
HYG and credit are a MUST watch now, after the 'everything rally in Q2', credit is key, see chart below, it's been consolidating and suddenly sharply down last few days (chart)