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U.S claims still strong / #XAUUSD / Copper / UST inversion / Davos ends / JPN inflation 41y highs





  • Year of the rabbit coming up!

  • Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 190,000 for the week ended Jan. 14, the Labor Department said on Thursday, this is astonishing really..when you think the 5y trend average is 245K... >>> hence FED member remain fairly hawkish, ''higher for longer'' (yes we've peaked clearly, yes inflation will fall relatively rapidly from 7 to 4% (not 2%), but the BIG question is about all those cuts (over 200bps) priced in already for 2023 and '24 some. We know overall macro data has been super weak (hence the 100bps plunge in 10y rates since Dec..!!..) but employment remains strong, so long this picture remains, 'mild recession-slowdown' for now is most likely scenario IMHO

  • Trafigura : “If we want to reach net zero by 2050, we need to have two-thirds of energy from renewable sources by 2030. In that scenario, we need a 20% increase in production per annum of copper."

  • Japan trade minister Nishimura says will ask businesses to hike wages by 5% and more >> must be the only? country in the world (strong coalition..) where the Trade Minister is telling the Unions to go and get a 5pct pay rise, Japan's consumer inflation hits fresh 41-year high, at 4%, keeping BOJ in focus

  • KB Homes, a large home builder, just reported a 68% 'cancel' rate. Meaning that over 2/3 of Homebuyers walked away from their contracts in the quarter. Leaving KB Homes with a massive pile-up of inventory

  • European Central Bank member says market is mispricing rate hikes, expects more to come (Knot)

  • Fed's Williams says Fed needs more rate rises to cool inflation, ''to bring down inflation it will require a period of below-trend growth and some softening of labour conditions''

  • Federal Reserve Vice Chair Lael Brainard said Thursday that high inflation in the United States is easing and suggested it was possible that the Fed’s interest rate hikes could slow price acceleration without causing significant job losses

  • JPM's Marko Kolanovic negates market optimism, goes full bear. We think "markets that are heading towards recession are being further aggravated by central bank tightening. We think that recession is currently not priced in equity markets.''

  • The U.S. could be in the middle of a fiscal crisis in a few months as the government hit its $31.4 trillion borrowing limit

  • Genesis (not the band) files for bankruptcy

  • The 30y US mortgage rate has moved from over 7%% to 6.10% over the last 2months, the largest 2months decline in rates since 2008/09

  • European gas prices are on track for their longest run of weekly losses in almost three years

 

Markets :
  • USDollar remains soft (ish) overall but near key supports. USDJPY 127-28 support though for now, CABLE near Dec highs around 1.2400, AUDUSD needs 'risk' to do okay to rally .7000+ again. EURUSD 1.08-1.0900 long-term resistance too

  • GOLD above cluster of resistance 1915/25$, sustained break above $1935+ and the bulls will love it, XAGUSD needs $24.50+ >>> US debt $31trn+, risk usd losing it's dominance long-term - FT article below - all interesting long-term stuff...

  • Equity markets 'struggling/peaked near resistance levels', on still pretty hawkish Fed and ECB. SPX500, we all know about resistance levels 4K+, the bulls want to hold 3850+ overall - ''early 2023 euphoria-momentum-short-covering'' clearly stalled...

  • UST's, we've seen a near 100bp drop in 10y yields since Dec, can we really go any lower/more inversion ?

  • Fears of US default grow as politicians squabble over raising the debt ceiling. Existing borrowing limits to be reached this week but ‘extraordinary measures’ will hold back the crisis until late summer >>> 1y CDS near 2013 highs

 

Financial Markets Today: Quick Take – January 20, 2023 | Saxo Group (home.saxo)

Summary: Somewhat muddled action across markets, as yields rebounded on hawkish ECB talk and strong US jobless claims data, halting the latest advance in the US dollar and Japanese yen. Equities traded on the weak side again, with Netflix reporting stronger than expected subscriber growth after hours, while its CEO is set to leave after twenty years in the position. Asian stocks advanced ahead of the week-long holiday for greater China to mark the Lunar New Year. US jobless claims, hawkish ECB halt the slide in yields | Saxo Market Call (podbean.com)


Fears of US default grow as politicians squabble over raising the debt ceiling – The Irish Times

Great power conflict puts the dollar’s exorbitant privilege under threat | Financial Times

Helen Robertson on Twitter: "European gas prices are on track for their longest run of weekly losses in almost three years ⤵️https://t.co/soZz113MhO #ONGT #EnergyCrisis" / Twitter


U.S. hits debt ceiling as partisan standoff sparks economic worries (yahoo.com)


Trafigura on Twitter: "“If we want to reach net zero by 2050, we need to have two-thirds of energy from renewable sources by 2030. In that scenario, we need a 20% increase in production per annum of copper." Our CEO Jeremy Weir speaking today at #WEF2023 about the clean energy economy. https://t.co/mL2yhcp4ip" / Twitter

.....most estimates say we need to double copper supply by 2030. HOWEVER, humanity has never doubled the globally available volume of any material in a decade. Ever.


CONCODA 🥷🔥 on Twitter: "Fears of another liquidity crisis have entered the mainstream, with many people guessing what will cause the next financial upheaval. Right now, all triggers have been suppressed, but not for long. The Great Liquidity Squeeze™ is upon us... 1/" / Twitter long Thread, well documented


Dairy Giant Vows To Cut Cow Farts By 30% Using Questionable Methods | The Daily Caller

'''The elites in power all flew to Switzerland in their private jets to talk about climate change dur to air pollution. It's okay for the elites to pollute the air, God forbid if a cow farts'' :-) brilliant and its true some some -600- private jets at least...have landed so far last few days..


European Central Bank member says market is mispricing rate hikes, expects more to come (cnbc.com)


Medvedev warns of nuclear war if Russia is defeated in Ukraine | World | The Times


U.S. weekly jobless claims unexpectedly fall (cnbc.com)


Crypto broker Genesis files for Chapter 11 bankruptcy – The Irish Times


St Jacinda’s global cheerleaders can’t acknowledge the truth about her fall (telegraph.co.uk)


Ambulance workers to stage 10 further strikes as row over pay and staffing escalates | UK News | Sky News


The New German Defense Minister’s Biggest Challenge Isn’t Ukraine - Carnegie Europe - Carnegie Endowment for International Peace



XAUUSD : 3months ago we talked a lot about #peakusdollar #peakworries , #FED hiking cycle continued, inversion etc...





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