US CPI has moved down from a peak of 9.1% last June to 6.4% in January. What's driving that decline? Lower rates of inflation in New/Used Cars, Gasoline, Medical Care, Apparel, Food at Home, Electricity, Gas Utilities, and Fuel Oil >>> inflation is not going up as quickly as it did, that's all, it's not about disinflation or lower inflation, having said this there has been a few positive developments last few months, clearly, and the data is also questionable in parts (old), specifically things like shelters, let's see whether U.S retail sales reinforce this view this afternoon
Dutch annual natural gas use drops to lowest for 50years, thank you mild winter, also shows when everyone is prepared to make an effort, it works.. and you cut costs to
UK's Michael Gove’s Brexit U-turn - At a “secret” meeting over the weekend, the Levelling Up Secretary was "very honest" about the shortcomings of Brexit (story below), and finally ! Brexit deal meets DUP's seven red lines, Downing Street to declare...There are hopes the move can pave the way for Northern Ireland power-sharing to return
With the 26 million barrels release confirmed last night (due to Congress mandated sales), the size of the US Strategic Petroleum Reserve will drop to ~345 million barrels by mid-year, the lowest level in 40 years
Fed's Barkin: There's going to be a lot more persistence to inflation than we want
Fed's Williams speech ''our work is not yet done'' & Fed's Harker says similar
Indian tycoon Gautam Adani dismisses market volatility as ‘temporary’
NATO members should spend a minimum of 2% of GDP on defense, Germany says, that's one sure thing for the next many many years : increase in defense spending
BlackRock downgrades Japan stocks on possible monetary policy shift
White House: No indication objects were part of China spy program, can we all calm down now please and, good news!, There are "no signs of ET" in British skies, the Defence Secretary says after unidentified flying objects were shot down in the US
Vanguard Value ETF VTV was a top buy among HF's last quarter as 39 hedge funds added about half a billion worth of shares while 18 exited, one of the highest buy/sell ratios of any equity
Markets :
Post U.S CPI, the message is clear, high(er) for longer in rates, rate hikes are being 'extended', new contracts lows in June, &Sep Fed meetings, the 200bps of cuts remain though slightly further out, basically the peak has moved/trended form March to July 2023 by now (ever since NFP in early Feb) >>> high (er) for longer... Market is data watching, stronger data, will push rate hikes further out again (similar picture in UK and Spanish CPI this morning-sticky!)
USD initially down & risk rallied, all got reversed pretty swiftly during the U.S session >>> in reality CROSSJPY's higher for now on higher yields, and as long as Ueda does not make any radical changes to policy (it will come, but not yet)
HSI : the furious rally topped in late Jan, down a good 10pct form highs then. Many market participants surprised relative equity strength vs UST yields/rates
Commodities all a little softer >>> sticky inflation, higher USD, recession risk etc
6months U.S Tbills 5%, 2year slowly getting back towards 4.75% which is definitely worth considering for some of this USDollar assets
Citi: "Details of January CPI that were different from our forecast leave us more confident that upcoming inflation prints will remain strong. Even as shelter prices eventually start to moderate...rebounds in components like used cars and airfares present upside risks"
Matthew Luzzetti, chief US economist at Deutsche Bank, forecasts the Fed will raise rates by 25 basis points at its next four meetings, reaching a peak of 5.5% to 5.75% in July
Damn lies! At least he admits (unlike many other fanatics) that it was bad idea, particularly a very bad delivery..
Still far too high
El-Erian, Rogoff Say It’s Too Late to Fix Too-Low Inflation Target. They both see higher US interest rates for some time to come. Higher real rates mean lower asset prices,’ says Rogoff
>>>> why do we have to have 2% inflation target ?? why cant iot ne changed ? to say 3% , who decided 2% is right, right for who anyway ?
this is a terrible terrible natural disaster - kept very quiet
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