Stéphan
Sep 11, 20234 min
Ueda first interview since becoming BoJ Governor : 'ending negative interest rates ‘ with guidance how, pretty explicit, not just talks anymore, 10y JGB yields decade high around 71bps..>>> The BoJ bought time for other CB's to curb inflation without shocks, Ueda may well have signalled that easy extra time is over
India forges compromise among divided world powers at the G20 summit in a diplomatic win for Modi
China blindsided by Historic Challenge to Belt and Road Project at G20
China's official gold reserves rose to 69.62 million ounces at the end of August, up from 68.69 million ounces a month earlier, marking the tenth consecutive month of incline
Fed speakers : Goolsbee 'overall inflation is above where they want it and there are risks', Logan 'appropriate to skit int rate in Sep, skipping does to imply stopping hikes', Williams 'policy in a good place and data dependent' and finally Bostic 'still plenty of work to do to get inflation back to 2%' >>> pretty tough trade off, but overall Sep was never in play, all about Nov Fed meeting and data dependent..
Saudi Arabia has sold more than 40% of its U.S. Treasury holdings since 2020 and its total position has fallen to the lowest level since 2016. The U.S has $7.5trn of debt maturing over the next 12months, debt that was issued near Zero, around 4.5% now, it till add 300bn$ per year in interest payments
OPEC+ pushing for $100 oil is a new headache for the U.S admin, rising energy prices going into an election year would not be welcome for Biden, particularly since he used almost all of the SPR reserves..
A strike against GM., Ford and Stellantis of just 10 days would reduce the nation's GDP by $5.6 billion, Crunch time for Biden and US economy as auto industry strike looms
The debt-to-income ratio for all homebuyers in the US just hit 40% for the first time in history, during the 2008 financial crisis, this ratio peaked at just under 40%
GS : The economic cost of obesity is expected to soar to $4 trillion by 2035. Weight loss drugs like Ozempic could change that
"Companies spent much time on AI during earnings calls/analyst days, and now it's time to start putting up results. Anecdotally, the experience of these products has underwhelmed users, and the novelty could wear off quickly" - JPM trading desk
Markets :
A lot of economic data this week : UK data, German ZES, 10y UST auction tomorrow, with U.S CPI focus on Wed, 30yUST auction, ECB rate decision, U.S PPI and retail sales on Thursday, AUD PMI, China data and U.S Ind prod on Friday
BoJ's Ueda taking steam out of JPY shorts, no real drama unless/until USDJPY trades below 145 for potential turnaround (chart below), CROSSJPY's a little softer in tandem, nothing dramatic, yet anyway. Helping USDCNH, which is well off 7.36 highs on Friday
Equity markets firmer overall, ahead of pretty key macro week
Crude TWI firmer, looks to be slowly heading towards $90-100
This week's economic calendar : Economic Calendar (tradingeconomics.com)
Macro and FX: King Dollar, pressures on China, and will ECB hike? | Saxo Market Call (podbean.com)
G20 India: Modi Vs Xi, Who Won and Lost, Top Things From Leaders' Summit - Bloomberg
African Union made permanent member of G20 at Delhi summit | G20 | The Guardian
China's gold reserves rise in August - Chinadaily.com.cn
Summing it up pretty well, JPM's tech trader, Ron Adler: "The AI hype continues to wane. Companies spent much time on AI during earnings calls/analyst days, and now it's time to start putting up results. Anecdotally, the experience of these products has underwhelmed users, and the novelty could wear off quickly. Yes, there's a "cool" factor and real-world use cases, but aside from executives in leather jackets, it's unclear how most will monetize and implement. That will take place in the next 12 months, but investors are already growing a bit anxious."
SNB foreign exchange reserves fall further - SWI swissinfo.ch
Why the U.S. is struggling to modernize its power grid (cnbc.com)
Crunch time for Biden and US economy as auto industry strike looms | Financial Times (ft.com)
The U.S. has spent over a trillion dollars fighting war on drugs (cnbc.com)
Obesity's Economic Cost Is Expected to Soar to $4 Trillion by 2035 (businessinsider.com)
BMW, Mercedes, BYD and Porsche: Cars on display at IAA motor show (cnbc.com)
Laura Kuenssberg: Inside the high-stakes soap opera that led to political chaos - BBC News
USDJPY - would suggest a close below 145 is needed for decent unwinding of the JPY shorts/carry trade - Very similar picture in the CROSSJPY's