U.S CPI has moved down from 9.1% last June to 4% in May 2023 - not bad! >>> June pause (most likely) confirmed >>> the question now is how explicitly or forcefully the Fed will commit to a July hike, ''hawkish skip being priced for 3weeks'' is most likely scenario tonight, been priced for 3weeks (anything else is a surprise) >>> over 80 bps of cuts in 2023 was priced just over a month ago, now virtually nothing (still 150bps or so of cuts priced in for 2024)
Shipping tax could yield $100 bln climate windfall
10% Of $4.2 Trillion US COVID Relief Was Lost To Fraud, Waste: Report >>> this IS STAGGERING, and it's only for the U.S, we know it happened everywhere!!
BARCLAYS: “.. there have only been two comparable instances of such narrow [stock] leadership over the last three decades .. the leaders collapsed in 2000 .. whereas in 2020 the leaders delivered on earnings .. we think the current episode will likely resemble 2020 ..” >> everyone saying the same thing >>> SPX500 is now above every single WallStreet estimate (pretty much)...BANKS are ALL rushing to raise their targets on SPX, GS just raised target to 4500 from 4000
Singapore Deputy Prime Minister: “Countries in ASEAN and around the world do not wish to choose sides. It's every country’s interest, especially the U.S. and China, to develop a new architecture that enables inclusive and sustainable development.”
Greenpeace activists on Wednesday scaled Deutsche Bank's headquarters in Frankfurt and strung a large yellow banner across part of the facade to protest the investment policies of the German lender and its asset management company DWS
China to cut gasoline, diesel retail prices
May ranked as the largest month of buying of US equities since 2010
Strong words. Chinese FM Qin Gang just had a call with Blinken and asked him to respect China's core concerns - especially on Taiwan - and to "stop damaging China's sovereignty, security and development interests in the name of competition" >>> China's government bond yield falling rapidly, 10-year bond yield now below 2.6%, soon to export deflation to RoW ..?
Brexit : What many forget is that the EU offered the UK an unconditional 12 month extension to the transition period so we could cope with covid without the distraction of Brexit. Brexit was the Tories priority, so the offer was turned down. Much of the mess can be put down to this
Markets :
We fully expect some sort of hawkish skip (is what market being expecting for 3weeks), anything else will be a surprise for markets. Core inflation remains sticky at 5.2% yoy (coming down int he right direction...but..), thus higher for longer, ie the FED wanted to correct and have managed to take out all the cuts that were price din for 2023, right now almost down to very little priced in from -80bps 2months ago (still 150bps priced in for 2024 though)
Equity markets been in FOMO mood (May saw largest inflows since 2010) etc
>>> We're in one of those weird moments in time when the S&P 500 has already topped the year-end target of strategists. What now?... they will all push year-end targets higher....
USDollar is a mix, USDCNH more influenced by China's problems (2.6% 10y yields..), USDJPY loves a BoJ on hold still (Friday decision), GBP could well 'have' to rally on possible 50bps next week and EURO 1.0650-1.1050 range for now, MXN continues to be favorite EMG
Bonds, all about the curve, all ears on Powell presser
May ranked as the largest month of buying of US equities since 2010. US L/S net leverage rose to 12 month highs as a result of the buying. Mega-Cap TMT drove the bulk of the buying in North America pushing net exposure to these names to decade highs. Traditional defensive continued to be bought with May being the 4th largest month of buying since 2018
This is an absolute hand grenade thrown at the Brexiter fundamentalists. So many reasonable people, even Leave voters, urged the gov’t to just take even a six-month, to not pile one crisis on top of another. But Brexit mattered to them more than people’s health, all going to come out now fwiw - clearly all out of their depth, with covid crisis on top, disastrous mismanagement etc etc - so many things they never saw coming, oh yes because well you know Bojo was a remainer! so he didn't have a f... clue about any of it, other than his own populist garbage, populist ideology over your own country-people-economy.... utter madness it was, always was
Fabulous, another one that was a remainer btw
never saw that one coming 🙂 ... that being the best at communicating in front of TVees doesn't necessarily make you good at running a government... cough!... everyone thought she was "progressive".... but what is least progressive thing you can do for your voters or country ?.... Run it badly
The Biden administration made $66 million in its oil trade (qz.com) >>> The Biden administration made $66 million in its first oil trade. The US sold 3 million barrels of oil from the Strategic Petroleum Reserve for $95 and repurchased them at $73
have a great FOMC day
Team PVM
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