Spring finally!
FED remains pretty tolerant!.. increased inflation and growth forecasts slightly, and keep dots in place, reflate !... risk took off, usd weakened, metals and commodities higher >>> BoE, SNB (exp signal rate cut in June), Norges (unch) and then US claims, Philly Fed and US PMI
The US has $6trn in MM funds + $3trn in cash, JAPAN has near $7trn worth of CASH in JPY to put to work - big picture, there is a lot of debt, but there is also tons of cash around to be put to work!... and while Powell keeps the system awash with liquidities, the bubbly markets will continue to do what they do, FED going to be in trouble next year if inflation is not lower, commodities, crude all higher meanwhile...
Bernanke (2008): QE is temporary and the Fed’s balance sheet ($2trn) will soon be lower than when we started. Powell (2024): It’s appropriate to slow the pace of QT fairly soon ($7.5trn)
“One of the challenges here is while society wants to see emissions reduced, nobody wants to pay for it,”
US immigration inflow of 2.5m for 2023 was significantly higher than the long-term trend of 1m. This is a key factor behind the combination of still high non-farm payroll addition, slowing wage growth, and rising unemployment. Slowing wage growth also leads Goldman Sachs to believe core services CPI ex-shelter can continue to come down
Zimbabwe, the poster child of hyperinflation, is allowing a free fall in its currency that it’s no longer keen to defend and is instead working on a new exchange rate potentially backed by gold >>>> #XAUUSD trend higher to continue, particularly as the World Gold council found that 62% of CB's around their world want to increase their share of XAU reserves (from 45% in 2022)...and since Gold is only 5% of overall reserves (on average)...demand should last for years...
'Mr Yen' says Japan could intervene if yen falls to 155 - the market will go and test them!
Intel prepares for $100 billion spending spree across four US states
Saudi Arabia to Take a Huge Step into AI with A $40 Billion Investment Fund
Panic mode sets in for Trump as he faces deadline for massive bond
The UK government borrowed more than expected in February, but borrowing in the financial year was still on track to be its lowest for four years
France March services PMI falls to 47.8.. (forecast 48.8), manufacturing PMI 45.8 (exp 47.5) - pretty dreadful set of data
Goldman: “Our interpretation is that Chair Powell and a narrow majority of the Committee feel strongly about not delaying cuts for too long and are targeting the June FOMC meeting for the first cut”
Read the FED message, one of the line reads differently than the others ! :
- growth stable/remains above potential
- unemployment levels at secular lows
- Core PCE remains above mandate for years
- FED is going to cut 175bps or more over next years
'Nobody wants to pay for it' | ExxonMobil and Aramco CEOs say green hydrogen is too expensive to replace fossil fuels | Hydrogen news and intelligence (hydrogeninsight.com)
“One of the challenges here is while society wants to see emissions reduced, nobody wants to pay for it,” Woods said. “There’s a hesitancy for people to sign up for low-carbon hydrogen.” Aramco CEO Amin Nasser told delegates that, in energy terms, the cost of green H2 amounted to the equivalent of $400 per barrel of oil — roughly five times the current price.
Otavio (Tavi) Costa on X: "I'm old enough to remember when The Wall Street Journal said that gold was losing its reserve status in September 2022. Instead, what we've witnessed is a record pace of accumulation of the metal, primarily driven by central banks. https://t.co/l0SncORsaI" / X (twitter.com)