Powell, FED pivot-market friendly / 2y UST yields back to Dec 2022 level / Big opt exp tom / #JPY !

Powell, as friendly as he could be for markets, quick reaction with higher risk/equties, bonds ripped higher BIG time and USD down sharply particularly vs JPY, Gold etc, clear message they are done, only question is how far or how fast they cut in 2024, market already doing the job for them though, FED's dots show 75bps of cuts next year, the market as almost twice as much priced in, the market has 25's as the implied path, why not 50 ?
Powell on the last mile of getting inflation down: "we kind of assume it will get harder from here, but so far it hasn't."
Instead of pushing back against the rosy nature of the market’s 2024 forecast, Powell embraced it. Based on the market’s reaction, he might as well have screamed, “We did it!”
This is quite something : one FOMC member sees 6 rate cuts in 2024 (four see 4 cuts; six see 3 cuts, five see 2 cuts; one sees 1 cut, and two see 0 cuts) - pretty wide spreads of views
Norges hiked ! noting that policy rte is likely to be kept at 4.5% for some time ahead
U.S : based on the Nov CPI and PPI, headline PCE inflation likely declined last month >>> 30year breakeven inflation making new lows now nearer to 2.22%
Chapter 11 bankruptcy filings are trending higher, and Fed hikes continue to bite harder and harder on highly leveraged firms with little or no cash flows in tech, growth, and venture capital, Fed just helped!
The percentage of commodities trading above their 200-day moving average has fallen to the lowest level since the Covid crash, crude lower, NatGas collapse lately are all signs of low demand, recession like >>>> time to step in!
Global High Yield Bond ETFs saw an inflow of $11.6 billion in November, the highest monthly inflow ever recorded surpassing the previous best of $8.6 billion in April 2020, when everyone went 'all-in on the soft landing'
COP28 ''So much diplomatic gymnastics in Dubai that the statement really bends over. "... transitioning away from fossil fuels in a just, orderly and equitable manner..." BUT "... recognizes that transitional fuels [a.k.a., natural gas] can play a role ... "
Argentina has devalued its currency, the peso, by more than 50% (to 800 peso) as part of a package of large-scale spending cuts intended to address the country’s worst economic crisis in decades >>> that's not even where it is/was trading in the black market..
Pfizer is now below Covid panic lows, it's wiped out a decade of value and lost 50% since the vaccine peak
The Swiss National Bank keeps borrowing costs unchanged and dropped a reference to possible further hikes after inflation slowed below its ceiling

Markets :

2y UST yields are at same level they were 1y ago, 4.42%
Crude slightly higher, commods higher (lower USD), Uranium has now surged pas $85 per pound for the 1st time since Jan 2008
EU50stoxx now most overbought since 1999 - from 2023 lows to 2023 highs within 6weeks...and together with SPX500, QQQ, Mag 7 etc - all overbought by now - Fed helping clearly, markets 'may' be getting ahead of themselves with cuts in 2024, for now it's all good, but beware if FOMO goes to sleep, anything that had been battered by higher rates is rallying hard
S&P500 is now about 8% higher since the 1st Fed rate hike on March 17th 2022.. but going back to 1982, the SPX500 returned an average of nearky 20%... in the 12months after theFed funds peaked (GS). DJ 37K for 1st time ever, many 'all time highs' stories out there
Vix on 12 is lowest levels since Nov 2019, that's partly why FOMO and thank you Powell
EM markets should love Fed from here on

Fed's Powell Leans Into Rate Cuts, Stoking Party on Wall Street - Bloomberg

Yahoo Finance on X: "“We still have a ways to go,” Fed Chair Powell says on inflation. “No one is declaring victory. That would be premature.” https://t.co/mtaGUeuiLz " / X (twitter.com )

Federal Reserve Board - Federal Reserve Board and Federal Open Market Committee release economic projections from the December 12-13 FOMC meeting

Nr 7 of Saxo outrageous prediction (WHICH I actually love, JPY etc) Japan’s Lucky 7% GDP growth rate affects yield-curve-control | Saxo Markets (home.saxo )

Summary: Japan was an economic powerhouse for many years before the bubble burst in 1991 and a long period of stagnation began. Corporate profits and wages were depressed, and an aging society meant labour supply shortages and a drag on consumption. But a new bottom is found as deflation ends and wages and private capex pick up, bringing productivity gains and fast-paced economic growth.

Norway’s Final Hike Defying Global Shift Sparks Krone Surge (yahoo.com )

Swiss central bank holds interest rate steady as inflation eases | Euronews

Why are US stocks sluggish? Some blame a looming $5 trillion options expiration (yahoo.com )

Oil Market Signals Bearishness in All Key Global Price Hubs - Bloomberg

IEA says oil demand slowdown to persist in 2024 amid oversupply fears (cnbc.com )

indeed (and NatGas and other commods) Gas prices fell 6% in November, leading inflation’s cooldown (yahoo.com )

California orders spending freeze as deficit piles up (sjvsun.com )

EU at critical juncture over aid to Ukraine (cnbc.com )

With rate hikes likely done, Fed turns to timing of cuts | Reuters

The Fed - December 13, 2023: FOMC Projections materials, accessible version (federalreserve.gov )

Australia employment surges in November, jobless rate up as workforce grows | Reuters

Javier Blas on X: "#COP28 COMMUNIQUÉ: So much diplomatic gymnastics in Dubai that the statement really bends over. "... transitioning away from fossil fuels [...] in a just, orderly and equitable manner..." BUT "... recognizes that transitional fuels [a.k.a., natural gas] can play a role ... " https://t.co/6a79ErpaGR " / X (twitter.com )