U.S CPI coming up (expectations is +0.3%, core 4%) + sizeable UST bond auctions, FOMC next up , and both ECB and BoE, SNB all expected to be on hold >>> clearly there is a risk that the FED 'rebalances' expectations of rate cuts for 2024 as market focus has clearly shifted from UST supply to inflation. Stocks and bonds seeing dead inflation ahead >>> in many way, for the market to be right, you need most or every FOMC members to be wrong (based on their recent comments)
GOLDMAN: “.. Recent inflation data have been an encouraging surprise even to our optimistic expectations, and our forecast path for year-on-year core PCE inflation has fallen somewhat as a result. .. We are therefore pulling our forecast of the first cut forward to 2024Q3.”
Despite the reaction which was mostly due to the unemployment rate retreating to 3.7% last month, it is clear that job growth is slowing. 3-month moving average of private payrolls is now down to 145K
China's pork deflation is pretty stunning, with pork CPI falling 31.8% year-on-year and dragging down overall CPI in November by about 0.58 ppt
-Oil prices could crash 50% if OPEC+ lets output rise and doesn't extend cuts through 2024, Citi commodities research chief says, Oil forecasts have flipped. Forecasts now show a significantly oversupplied market for 2024
-Crunch time for Ukraine as the West wavers. The next week could be critical for the country’s future. Having promised open-ended support, the US and EU are struggling to provide new funding
-Occidental’s Debt Binge Leaves Investors Exposed to OPEC
-Germany cannot support COP28 draft deal, foreign minister says
-Stefanik Targets Harvard And MIT Presidents—‘Totally Unfit And Untenable’—As GOP Campaign Grows >> Universities shoudl focus on Research and teaching, not politics !
-"I've got some advice for the young: If you've got anything you really want to do, don't wait until you're 93" --- Charlie Munger
Markets :
Consenss if for equity markets to rally gently into January barring a major shock from today's CPI report anfd tomorrow's FOMC
VIX on the floor, realized vols on the lows, self-fulfiling in equity markets, the lower it goes the more systematic leverage is deployed, and buy-the-dip is automatic >>>>>>> as always beware when/IF it reverses..
USD pausing - CROSSJPY's higher again as BoJ ignals no move in Dec (was alsways goiong ot be the case that only Jan owas in play)
SPX500 grinding higher still, low vols, systematic buying etc (and/or reverse ! if-when vols tick higher on some sort of surprise highe CPI, if so the market will quickly speculate that Powell's tone will be hawkish on Wednesday
Natural Gas continues to get decimated and has declined by 33% since its October 27th high and has now fallen to a 6-month low, good news! so why are gas prices going up in the UK in Jan ???... can we assume the only reasons it must be coming from renewable costs?...yeps,but hang on politicians told us green energy woul dbring prices down ??
No.5 of Saxo's oputrageous predictions : Summary: The sustained and worsening divergence in current accounts between a group of surplus and deficit countries is a result of managed currencies and is not sustainable long-term. As the US debt situation has become uncontrollable, a group of six deficit countries form a ‘Rome Club’ to cooperate on reducing deficits by collectively negotiating new world trade terms with the surplus countries. We see gold, silver and cryptocurrencies doing very well in an unpredictable environment for the world’s reserve currency and the unsustainable current accounts among deficit countries
The Fed Doesn’t Need to Cut Rates. Treasury Debt Management Has the Same Effect. - Barron's (barrons.com) - must admit, fwiw! I tend to agree
Occidental’s Debt Binge Leaves Investors Exposed to OPEC - Bloomberg >>> “Occidental, which trades under the ‘OXY’ ticker, could well change its symbol to ‘OPEC’ — giving a more accurate reflection of what shareholders are buying”
I’ve spent 40 years making forecasts. My confidence in them is at rock-bottom (telegraph.co.uk) whats new? but good that someone said it ! '''I’ve spent 40 years making forecasts. My confidence in them is at rock-bottom, models can be amazingly reliable, or little better than a guess0'''
Stefanik Targets Harvard And MIT Presidents—‘Totally Unfit And Untenable’—As GOP Campaign Grows (forbes.com)
Rishi Sunak Covid inquiry live: Eat Out to Help Out was safe and designed to save jobs - Sunak - BBC News too many lies!
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