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Writer's pictureStéphan

FED's sticky inflation / GS possible July cut, if / Taiwan, US & China / NVDA earnings in focus tom / Commods (ideally) in need of a pause-consolidation / VIX 12 handle



  • VIX ended last week around 12, still there, its lowest close since November 2019, markets all very calm, FX vols on the floor too, still.. 1week EURUSD straddle is total of 50 usdpips :-) >>> if you wanted to buy a equity hedge, now is the time

  • Overall U.S economic data is coming in slightly softer, inflation remains sticky though and Fed officials are being careful to call for early cuts, June and/or Jul yin play, with an asymmetric FED, things can swing quickly (either way). Few arguments for a short-term #copperpeak #commods overall need some sort of consolidation (see below comments)

  • Fed's Mester: Previously, I expected three rate cuts this year. I do not think that's still appropriate. Inflation risks are tilted to the upside

  • Fed staff expect core PCE rose 2.75% in April from a year earlier. Most analysts likewise have core PCE rising by 0.24% in April. That would put the 6-month annualized rate of core PCE inflation at 3.2%

  • Two brothers who studied at the MIT were arrested on Wednesday on US charges that they carried out a cutting-edge scheme to exploit the Ethereum blockchain’s integrity and steal $25 million worth of cryptocurrency - just like that

  • FT-A war over Taiwan between the US and China would trigger the biggest international crisis since the second world war, this is a very good article

  • Saxo summary on China's housing policies (below)

  • Summer interest rate cut ‘possible’ as inflation eases, Bank of England boss says

  • RBA was on the ‘path to reducing rates’ but not anymore/minutes

  • Commods, precious, industrial metals need some sort of consolidation after huge rallies YTD

  • Kolanovic reiterated his view in a note to clients late Monday, urging them not to buy stocks, while acknowledging that this negative outlook has hurt JPMorgan’s model portfolio .

  • GOLDMAN: “.. The Federal Reserve will not be in the first wave of cutters because of the pickup in sequential core inflation during Q1. .. However, we also estimate that the market-based core PCE index .. rose just 0.18%, a pace that would be quite consistent with a July cut if maintained.”

  • 71% of US advisors have little to no gold allocation, i.e. it is less than 1% of their portfolio

 

Summary:  The Chinese housing market is undergoing a significant policy shift, as evidenced by the April 30 Politburo meeting which shifted focus from affordable housing to addressing housing inventory overhang. This was followed by the State Council's May 17 conference, unveiling policies to boost demand, including the PBOC funding SOEs to buy unsold properties. As the Third Plenary Session approaches, further policies are anticipated to boost sentiment and ensure stability, but the market faces risks if reforms focus solely on state-driven initiatives, potentially leading to a summer setback.

















It's not just in the U.S.... to a certain extent it's everywhere you look Spanish debt hits record €1.6 trillion, 109% of GDP, and grows at 5,1%, twice rate of GDP, 2% | The Corner



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