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Writer's pictureStéphan

UST curve un-inverting : recession signs ? / SPX 4200 lev / GOLD most oversold / NFP next up



  • Solar industry warns of hurdles to EU’s green tech drive: ‘Europe isn’t profitable’ Europe’s bid to expand its green tech industry faces a host of challenges, including high energy costs and supply chain issues, solar industry representatives gathered in Madrid warned on Thursday

  • IMF chief Georgieva: soft landing possible, but fiscal, debt risks abound

  • U.S yield curve 'un-inverting', textbook recession behaviour ? hence why the FED would appear to have 'leaked' a pause in Nov, due to 'financial conditions tightening'.. quite possible! employment data which remains key for Powell

  • JOLTS were much stronger, ADP a little softer in mid week, now time for NFP : payrolls expected to fall to 150K from 187K, U rate expected to hold at 3.8%. Average hourly earnings forecast to rise 0.3% MoM and 4.1% YoY, from 0.2% and 4.3% respectively

  • EV maker Rivian plans $1.5 bln convertible bond sale

  • Australia concludes China decoupling ‘impossible’ after carrying out series of classified studies

  • Developed nations pledge $9.3 billion to global climate fund at gathering in Germany

  • Alibaba accused of ‘possible espionage’ at European hub

  • The 30-Year Mortgage Rate in the US has moved up to 7.49%, the highest level since December 2000. U.S. Bank losses on held-to-maturity assets have soared to an all-time high of $400 Billion. US small banks’ credit card delinquency rates hit a multi-decade high

 

Markets :

  • GOLD most oversold since 2015/Thread

  • UST 10's just above 4.7% ahead of NFP, bonds oversold, but.. long-term yields could drop towards 4.4/4.5% and the long-term picture wouldn't change technically, and with supply coming it's hard to think of much more of a correction than this, Yellen going on a UST selling spree in a holiday shortened 3 day window next week.. total of nearly $550bn in gross issuance (bills and bonds) with $85bn of net issuance of which $61bn comes from 3s/10s/30s

  • USDollar similar, overbought slightly, as bonds and equity got a little oversold too, one NFP data is quite irrelevant, but decent swing possible in short-term sentiment

  • SPX500 200dma key for 'medium-term' direction into Q4, so far so good, we held this week! yet underneath it has been pretty terrible for rates sensitive stocks, take #BAC and #Citi stocks hitting 1y lows

  • Crude steadying $82 area after a huge liquidation of leveraged CTA/Spec positions, though long-term no real evidence of weak aggregate demand for crude, so soon a buy again.. bar a nasty recession call of course

  • #HYG also had its largest 10day sell.-off since banking crisis in March 2023, when 10's UST yields reached 4%

 















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HYG - high yield credit



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