U.S PPI down / China macro weak / FED : higher for longer, Powell : 'up to 2years before a cut'

FED would love a few months to 'ponder'... Powell : ''A rate cut this year won’t be appropriate, inflation hasn’t moved down, hasn’t reacted to existing rate hikes, so we’re going to have to keep at it.”, added "talking about a couple of years out’ for rate cuts, suib par growth for a while may be necessary to bring down inflation'' >>Markets disagree, price first cut for Jan 2024 at the moment (remember the 80bps of cuts priced in 2023...gone) >> so as expected, #hawkishskip, higher , the significant increase of the median dot for 2024 likely has the biggest impact (even though pencilling in -2- additional rate hikes for 2023 is also pretty impressive). It means that the odds of a large decline in the #FED Target Rate next year are (way) down >>>BUT towards the end, on the soft side of things, Powell said 'The conditions we need to see in place to get inflation down are coming into place, including lower growth and labor slack, we get closer & closer to the destination.”...assessing additional information and its implications

U.S May PPI : +1.1% vs. +1.5% est. & +2.3% prior; core PPI +2.8% vs. +2.9% est. & +3.2% prior - freefalling! but for Powell it's all about core inflation and employment

Bank of Canada's Beaudry : higher for longer (full speech below)

Pence says he can’t defend alleged Trump crimes in classified documents indictment

Turkish President Recep Tayyip Erdogan blusters that "terrorists were holding demos on the streets of Sweden" as he blocks the Scandinavian nation from joining NATO

China trims key lending rate as new data shows flagging recovery. Property investment down 7.2% in first five months, youth joblessness rises, same old action, not having much impact anymore..rate curts giving 'hopes', but economy still losing momentum, does NOT bode well for next few quarters

US Companies Scramble to Cuts Costs, Pay Down Debt as Interest Rates Surge (as you would expect) - BBG article

S&P 500 will finish the year at 3900 warns Morgan Stanley's CIO Mike Wilson. Wilson says that inflation cooling will be bad for stocks as that is where most of the recent earnings strength has come from >> he is persistent in his view! long way to go to 31.Dec

BIDEN: "I signed an executive order to make 'environmental justice' the responsibility of every single federal department"...ok what does this mean exactly ?..

UK : Nicholas Watt, "I was told it takes two hours to read the contents of the report. It is damning. And it is damning on page after page."

FX land : USD mixed, more about CROSSJPY's higher on higher yields (higher for longer) and risk, ECB will do 25bps today, SNB 25bps next week and BoE 25bps (small risk of 50bps), BoJ will be 'concerned' about renewed JPY weakness (PPI etc..)

Bonds all about the curve, dec 2023/dec 2024 etc, rate cuts pushed further out, higher for longer etc. No more cuts priced for 2023 (was 80bps 2months ago..), first cut priced in Jan 2024 ish, which is not what FED is saying still..

Equity markets not too bothered, until we actually see unemployment higher, thus hit some sort of recession >>> sentiment/RSI etc : Extreme greed trading at levels last seen at February highs...but of course, back then we had no AI

Crude stays low, good for consumers