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Writer's pictureStéphan
Apr 224 min read

SNB ups reserve requirements for banks / U.S houses approves military aid / FED : persistent inflation risk / Huge U.S earnings week coming up




  • China (been) stockpiling all commodities from gold, to iron ore, copper, oil, nickel, is this in preparation of a local currency malaise..?

  • The week ahead : ECB, BoE speakers (today) and BoC quarterly, more ECB and BoE speakers (Tuesday), German IFO and yet more ECB speakers (Wed) + BoC minutes and US data, SNB quarterly results (Thursday) and BoJ meeting on Friday + March PCE and SNB's Jordan speech in Bern >> as usual far too many CB speakers, stick to facts, data and UST's and a HUGE earnings week (last week showed a bit of a 'digestion problem' with earnings)

  • Persistent inflation and higher-for-longer interest rates were cited as key risks to financial stability in the Federal Reserve's latest survey of U.S. central bank contacts, with geopolitical troubles and the 2024 U.S. presidential election also mentioned as "a potentially significant source of shocks." >>> bonds are a good hedge for equity folks for as long as core inflation is embedded down near 2.5% (below 3% say), if not they don't work as diversification/hedge

  • The European Central Bank won’t be swayed from a first interest-rate cut in June by oil price uncertainty, Governing Council member Francois Villeroy de Galhau said

  • The SNB raises minimum reserve requirement for banks from 2.5% to 4%. and will therefore amend the National Bank Ordinance as of July 1

  • The US House of Representatives on Saturday approved long-delayed military aid to Ukraine in a rare show of bipartisan unity, while also bolstering Israel and Taiwan defences and threatening to ban Chinese-owned Tikotok

  • Re-vote on Elon Musk’s pay could expose Tesla to even more legal trouble

  • Gold has acted as a discipline enforcer on profligate government spending for generations. Once the gold standard era was ended in 1971, it needed to be replaced by some other enforcement mechanism to deal with inflation and government deficits. CB's were supposed to this, they don't anymore / Thread

  • Markets : the previously hot 'chip' sector for slammed last week, NVDA had its 2nd highest loss in history (down 10% Friday alone), Netflix, AMD down hard too (those who missed the rally 'may' start to consider), SPX, QQQ, DAX hit our first targets around 4925, 17K and 17750 respectively >> A decent correction done in a few things in the short-term (chip sector, NVDA (1st time below 50dma since last October etc), Netflix, TSLA, APPL, AMD ( AMD is now down on the year after being up over 43% YTD) were all way overdone, as discussed recently, and here we are), having said that #highforlonger will persist, and probably hurt few more of these hot names, avoid still non-profitable and weak balance-sheets, stick to quality!... the debt sustainability issue is not going away ...!

 










JPM's excellent Positioning Intelligence team thinks that there’s quite a few similarities observed so far in April to the dynamics of August last year:

1. A market pull-back post almost 30% gains

2. A similar magnitude of declines by this point MTD

3. Rising yields / resurfacing inflation concerns

4. HFs starting to add shorts

5. Positioning declines as highlighted by their TPM. 



well worth a read





EURUSD - divergence should continue to put pressure and eventually test 1.05 - huge area of support #EURJPY though is still bid



#TLT 20+y UST's - still look s a bit ugly - debt sustainability etc etc


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