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NFP was on highs but close to expectations, bond sold-off hard, equity markets responded and gave back nearly all of the big short-covering rally we saw earlier last week, rates were already moving higher with ‘ease’ in the middle of the week, Fed speakers stuck to their guns, US CPI, FOMC minutes and much more this week (see below) Fed minutes "May provide more insight into the central bank’s aggressive efforts to fight inflation. And there’s a key measure of US producer prices is due Wednesday, followed by the University of Michigan’s monthly consumer inflation expectations on Friday."-BBG, on U.S "CPI is forecast to have risen 8.1% in Sep from a year earlier vs. 8.3% in Aug, according to economists surveyed by Bloomberg. Core CPI is projected to rise 6.5% on a year-over-year basis and fall to 0.4% month over month."-BBG >>>> The FED is rising rates at the fastest pace ever into a bubble, on top of it all, they still saying that they want the housing market to crash, having failed to stop QE early enough, and failed to start to hike in 2021 when inflation started to pop its head Global margin call hits European debt markets - Hedges blow up after risk gauges in Germany’s government debt market exceeded those of the 2008 world crash EU gas drops below €150/MWh to a three-month low. Driven by strong LNG arrivals, mild autumn weather and demand destruction. Russia's ability to shock much reduced with flows down 78% YoY., welcome news! UK : The central bank announced on Monday that it would introduce further measures to ensure an “orderly end” to its purchase scheme on Oct. 14. China's services activity falls for first time since May (from 55 to 49.3) PayPal pulls plan to fine customers $2.5K for promoting ‘misinformation’ UKR-RU : The embassies of the EU countries received an evacuation order from Kiev Markets : BUND/BTP spread at 2022 widest levels 257bp, German ‘Pfandbrief’ highest since 2011 too at 3.255, 10y mortgage rate now around 4% Bonds hit hard again last week, 8th negative week in a row for FI.. Gold ‘failed’ to break higher post NFP last Friday USD higher again post NFP, now UKR/RU situation clearly not helping ‘euro’ per say, could eurjpy come under pressure with the added risk of BoJ doing something in USDJPY ? (chart below just to put things in perspective) Crude steadily higher since OPEC+ cut Equity markets hit hard again post NFP with higher rates, duration particularly hit hard, weak start to the week, ahead of FOMC minutes and U.S CPI later on This week we are to going to get : At least 5 Fed speakers lined up already U.S PPI tomorrow FED meeting minutes on Wed Sep U.S CPI on Thursday Retail sales and consumer sentiment survey on Friday Volatile we will have – either way The current situation in markets Higher rates forcing fastest pace of falling prices in housing for 10years Equity markets down, duration hit hardest with higher rates and risk of recession in 2023 Commodities down on ‘risk’ of deflation UST yields almost making/made their move to natural level of 4 to 4.5%?.. https://s357.podbean.com/pb/32d9c078a280ddd674cb49f1e0d9b122/6343d05b/data1/fs56/5709963/uploads/2022_10_10_MarketCall_Slides.pdf?pbss=de4a2363-0c18-5238-a3ee-815269cd71fc and https://saxostrats.podbean.com/e/the-unbearable-tightness-getting-us-closer-to-the-peak/ The unbearable tightness getting us closer to peak yields >>> not what many in markets are looking for in markets right now Today we look at an ugly close to last week for equity markets after the market read a mostly uneventful September jobs report as negative for risk sentiment because the unemployment rate dropped back to the cycle low of 3.5%, driving treasury yields back toward the cycle highs and sending the US dollar higher again. Sentiment failed to improve in Asia as the week gets under way, with higher oil prices weighing and amplified by the stronger US dollar, while geopolitical jitters are more uncomfortable than ever. Precious metals, wheat, pondering peak tightness, the important event risks on the economic calendar and more are also on today's pod, which features Ole Hansen on commodities and John J. Hardy hosting an on FX. https://www.newsweek.com/putin-meet-security-council-after-crimea-bridge-explosion-1750216?utm_medium=Social&utm_source=Twitter#Echobox=1665389591 Putin to Meet With Security Council After Crimea Bridge Explosion https://twitter.com/Ole_S_Hansen/status/1579370314105966592 EU NatGas drops below €150/MWh to a three-month low. Driven by strong LNG arrivals, mild autumn weather and demand destruction. Russia's ability to shock much reduced with flows down 78% YoY. https://www.cnbc.com/2022/10/10/bank-of-england-announces-liquidity-measures-to-help-ease-pension-fund-issues.html Bank of England strengthens emergency stimulus to help ease market turmoil https://news.bitcoin.com/visa-partners-with-ftx-to-roll-out-crypto-debit-cards-in-40-countries/ Visa Partners with FTX to Roll Out Crypto Debit Cards in 40 Countries https://nypost.com/2022/10/09/paypal-pulls-plan-to-fine-customers-2-5k-for-promoting-misinformation/ PayPal pulls plan to fine customers $2.5K for promoting ‘misinformation’ https://www.bloomberg.com/news/articles/2022-10-09/gold-is-heading-east-as-a-falling-price-lures-asian-buyers The Gold Market’s Great Migration Sends Bullion Rushing East Western investors are dumping gold in response to rising rates. https://asiatimes.com/2022/10/global-margin-call-hits-european-debt-markets/ Global margin call hits European debt markets Hedges blow up after risk gauges in Germany’s government debt market exceeded those of the 2008 world crash The Government is still "thinking about" an energy-saving campaign, the Work and Pensions minister suggested this morning. Follow the latest on our politics liveblog: https://telegraph.co.uk/politics/2022/10/10/liz-truss-benefits-news-nicola-sturgeon-tories-kwarteng/?utm_content=telegraph&utm_medium=Social&utm_campaign=Echobox&utm_source=Twitter#Echobox=1665390472

GOLD – let’s see how goes after NFP >>>> could HIGHER VOLS and ILLIQUID blond market lead to a break up ion Gold safe heaven ? particularly as we approach 4 to 4.5% in UST which is very most likely going to be the top ? NFP – all about average earnings – any signs of them following JOLTS and markets should ‘like’ it (quite bizarre when markets look for bad data to push Eq higher, we are in one of those moments apparently..) Gold ‘breaking’ up on charts (clearly needs confirmation after NFP..) perhaps with the view UST 10year yields can do/go to 4-4.25 again but that being the top, XAU might be on to something from here OPEC+ move >>> the U.S and others are upset, in many ways, when you try to inflict a price cap on a commodity, the market usually finds a way to make you pay the ‘natural’ price Germany's relief plan could trigger UK-style bond meltdown in Euro nations. German Chancellor Scholz last week announced package worth €200bn designed to help w/soaring energy prices, including gas price brake & a cut in sales tax for fuel Fed must be 'singularly' focused on inflation, Mester says and Fed’s Waller Sees Additional Rate Hikes Into Early Next Year >>> overall message remains : it’s all about inflation Belarus bans consumer price rises in bid to tame inflation >>>> inflation is now illegal.. JPY : Japan’s top currency diplomate Kanda : making various efforts so as not to face a limit to ammunition in FX interventions Treasuries Liquidity Problem Exposes Fed to ‘Biggest Nightmare’. JPMorgan measure of Treasury-market depth continue to plunge >>> the UK’s issue the other day is the tip of the iceberg, and as we said should worry other countries in similar fiscal situation, so not surprising to read Scholz comments below and worries from the likes of JPM Markets : All about wage growth today, the actual number is quite irrelevant Equity markets rallied hard earlier in week (short covering), pausing last couple of days ahead of NFP Rates moved higher with relative ‘ease’ last few days, 10y say is 20bp higher, all petty much across markets, UK similarly etc >>> the main issue remain ‘liquidity’ or lack of, there is NO daily liquidity when mainstream large blocks of trades have to go through USD similar price action, weaker earlier in week, slightly higher last couple of days, awaiting payrolls Gold chart below Crude is up about 15% over last year (in USD terms), nothing dramatic ? maybe not, depending on which currency you look it can be up as much as nearly 50% for importers, such as Japan, and still about 25% in China, or 35% in Korea Electricity/gas prices slowly still heading lower in Europe VIX – a cheap punt, but nonetheless, 50K of the March’2023 150 calls! Traded last few days, at 20cents, in fact the highest strike in there is 180 Germany's relief plan could trigger UK-style bond meltdown in Euro nations. German Chancellor Scholz last week announced package worth €200bn designed to help w/soaring energy prices, including gas price brake & a cut in sales tax for fuel. https://cnb.cx/3ekWK2i https://tradingeconomics.com/commodity/eu-natural-gasTTF natgas https://www.bloomberg.com/news/articles/2022-10-06/energy-crisis-people-in-poland-burn-trash-to-keep-warm-in-coal-shortage?leadSource=uverify%20wallPeople in Poland Are Burning Trash to Stay Warm This Winter Russia’s war in Ukraine has exposed the vulnerability of Europe’s fuel supplies. In Poland, some households are hoarding garbage to replace their coal. https://www.ft.com/content/2ad6558d-57fb-41ad-be0b-477506c48cfa?segmentId=114a04fe-353d-37db-f705-204c9a0a157b Market jitters spur September flight to Treasury ETFs Government bonds including Treasuries accounted for 60 per cent of inflows, up from 20 per cent in August https://www.chicagofed.org/publications/speeches/2022/october-06-il-chamber-of-commerce Illinois Chamber of Commerce Annual Luncheon President Charles Evans joined the Illinois Chamber of Commerce for a moderated Q&A on the U.S. economy followed by an audience Q&A >>> rates like to peak 4.5% in Q1 2023 https://www.bbc.co.uk/news/business-63167922 Samsung warns of 32% hit to profits on chip slump https://www.finews.asia/finance/37792-credit-suisse-announces-debt-repurchase-offers?utm_source=newsletter_1773&utm_medium=email&utm_campaign=finews-asia-newsletter-07-10-2022 Credit Suisse Announces Debt Repurchase Offers Amid concerns about its financial health, Switzerland’s most troubled lender has announced offers to repurchase debt securities totalling billions of dollars…..long way to go in reducing debt… https://www.ft.com/content/c85e0afa-fdf4-499c-bb0d-6c106336ef0c Goldman Sachs pursues asset purchases in UK pensions fire sale US bank’s asset management arm targets retirement schemes’ illiquid holdings…“We’re seeing discounts of 20 to 30 per cent for a high quality portfolio [of stakes in private equity funds],” said Gabriel Möllerberg, a managing director at Goldman Sachs Asset Management. “It’s absolutely an opportunity.”…of course it is! https://uk.investing.com/news/economic-indicators/belarus-bans-consumer-price-rises-in-bid-to-tame-inflation-2773157 Belarus bans consumer price rises in bid to tame inflation VIX surge to 150 is day’s biggest options bet for ‘fear gauge.’ Trader pays $950,000 for 50,000 options wagering on VIX spike. Bet could be ‘cheap way to hedge’ against a market crash. https://bloomberg.com/news/articles/2022-10-06/vix-surge-to-150-is-day-s-biggest-options-bet-for-fear-gauge?sref=R17xFhjo https://www.bbc.co.uk/news/science-environment-63149957?xtor=AL-72-%5Bpartner%5D-%5Bbbc.news.twitter%5D-%5Bheadline%5D-%5Bnews%5D-%5Bbizdev%5D-%5Bisapi%5D&at_campaign=64&at_custom4=B277D272-4534-11ED-BAEC-A0EA4744363C&at_custom2=twitter&at_custom1=%5Bpost+type%5D&at_custom3=%40BBCNews&at_medium=custom7 New oil and gas at odds with green goals – report https://www.news18.com/news/business/germany-expects-recession-next-year-as-gas-crisis-bites-report-6114061.html Germany Expects Recession Next Year as Gas Crisis Bites: Report https://www.bloomberg.com/news/articles/2022-10-06/us-treasuries-liquidity-problem-exposes-fed-to-biggest-nightmare?sref=ZVajCYcV&leadSource=uverify%20wall Treasuries Liquidity Problem Exposes Fed to ‘Biggest Nightmare’ JPMorgan measure of Treasury-market depth continue to plunge - Bloomberg’s gauge of how far yields are from fair value rising Jan. 6 panel to hold rescheduled hearing next Thursday https://trib.al/ZoAj6sZ https://www.indy100.com/politics/nadhim-zahawi-question-time-putin?utm_content=Echobox&utm_medium=Social&utm_campaign=Main&utm_source=Twitter#Echobox=1665126896 Nadhim Zahawi laughed at for blaming Tories budget fiasco on Putin

PVM discusses "Growth vs Value", Single Stocks and our systematic approach to finding deep sustainable long term Value for our Client Portfolios.

In this interview with Bloomberg TV, PVM discusses our thoughts on Global Macroeconomics and how it drives our quest to build investment portfolios for our Clients with Better Metrics. We also discuss our latest single stock investments.