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JPN election : no majority / Moody's on France / Huge week ahead for markets + U.S election next week

Writer's picture: StéphanStéphan

  • Week ahead : Crude lower #brent here (big picture chart) - big 5 Techs earnings week (APPL, AMZN MSFT, Meta and Google), UST 10y yields jumped another 15-20bps last week, 4.25%+, mainly driven by stronger growth expectations (as often debated, FED didn't need to do 50bps..and that's what the bond market has been saying since..yields up 50+bps since Fed 'pivoted'), not inflation exp (higher real yields) >>> U.S house prices, JOLTS, GDP data, China PMI, PCE, and BoJ decision, U.S payrolls and ISM...and UK budget

  • Donald Trump holds rally at iconic New York venue - as Kamala Harris hits must-win state, Elon seemed a little 'high' yesterday?

  • Saxo : Red sweep? 10y UST yields could hit 5% Blue sweep? Yields may dip to 3.6% but climb above 4% long-term amid fiscal woes >>> Blue sweep is pretty unlikely (Senate) so the probability distribution very skewed overall

  • Moody's on France "The fiscal deterioration that we have already seen is beyond our expectations and stands in contrast w/govts in similarly rated countries that are tending to consolidate their public finances in the current environment

  • GS: High market concentration (near a 100-year peak) adds idiosyncratic risk, with a projected 10-year annualized return of 3% (baseline)

  • Healthcare just closed at the lowest levels since 2011 relative to S&Ps, value there finally

  • Elon Musk could (eee...will) reap a whopping tax break if he joins a Trump administration

  • Russia raises interest rate to 21%, the highest level in more than 2 decades. South Korea's president raised the possibility of supplying Ukraine with weapons as North Korea allegedly sends troops to support Russia’s aggression. Alleging ‘Russian special operation,’ Georgian president calls for protests over disputed election

  • SCMP: "China is recording an early surge in parcel shipments as the Singles’ Day shopping season – the country’s largest annual consumer event – kicked off earlier than usual." possibly good news for consumption!

  • Volkswagen AG workers in Germany will pause production on Monday to join rallies about the automaker’s plans for unprecedented factory closures in the country

  • Iran weighs its options after Israeli strike exposes military vulnerabilities


 

The problem with the Trump trade (ft.com) the risk is that a fair bit of the Trump trade is priced in (but...very hard to tell-quantify.. UK Gilts moved 100bps on Truss..) anything goes really, best go low in risk into elections and use extremes to fade, no clear outcome, too close, market focuses on Dec fed meeting instead





Mercedes, BMW and Porsche have suffered sliding sales in China and now face a fight to defend their home turf in Europe from ambitious Chinese rivals





Can silver become more precious than gold? Here's what Vedanta's Anil Agarwal thinks - The Economic Times (indiatimes.com) >>> Only 0.5% of global financial assets are invested in gold—approx. $ 3.6 trillion, representing 43,000T. If gold investments were to return to the 1980 level of 2.7% of financial assets (as shown in the table below), it would require 230,000 tonnes of gold at today’s prices







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