Read on the Trading Floor - 14 May 2024
Today’s focus… Still waiting for US CPI to print
Macro Themes At Play
Theme 1 - Roaring Bore
Theme 2 - CPI Previews dominate the literature (Can HarksterAI help?)
Theme 3 - Geopolitics and campaign moves overshadow the news cycle.
Further reading and listening of note
Theme 1 - Roaring Bore
"Roaring Kitty maybe back, but markets are a Roaring Bore"... h/t my colleague and publisher of The Morning Hark - 14 May.
These are energy sapping markets, as the bar to trade remains extremely high ahead of tomorrow's CPI print. The whiplash price action post PPI will do little to encourage new trends even if JPow loves to lead the mkt down a dovish path.
#1. UK Labour data: strong wage growth pushes back on BoE pricing... #higherforlonger
#2. ZEW: 47.1 vs previous 42.9 and expected 46.1
#3. Pill: BoE's Chief Economist continued to talk up the possibility of rate cuts
#4. US PPI: fleeting impact from the hotter data set as revisions were softer. EUR boomeranged as a result, 1.0770 given off 1.0825 paid (surely we could have made better life choices)
#5. JPow on the April PPI: "I wouldn’t call it hot. I would call it sort of mixed."
ING - Cooling UK jobs market bolsters chances of near-term rate cut
Saxo Bank - UK labor data and Huw Pill's comments are not enough for a bond bull rally
WSJ - Fed Chair Jerome Powell Maintains Wait-and-See Posture on Inflation and Rates
Theme 2 - CPI Previews dominate the literature (Can HarksterAI help?)
Claudia Sahm (Stay At Home Marco) - Confidence is the name of the Fed game
Fidenza Macro - Thoughts going into this week's data, and a new podcast
The Capital Spectator - Disinflation Expected To Resume In April CPI Report
Calculated Risk - CPI Previews
Livesquawk - TWO MEASURES OF US HOUSEHOLD ACTIVITY SHOULD PROVIDE FRESH EVIDENCE FOR THE FED
James Picerno - Disinflation Expected To Resume In April CPI Report
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Theme 3 - Geopolitics and campaign moves overshadow the news cycle.
As data slows down, CB speak becomes repetitive, carry is king, FCI running hot and with little new news to get the mkt excited.... politicians on the campaign trail are delivering the clickbait, whilst other world leaders are making geopolitical plays.
Macron (looking for his next job in M&A advisory?) has opened the door to a French/German bank merger, Hunt wants a $1trillion corp in UK (who doesn't?), Sunak declares UK will be safer under Conservative party leadership (another campaign pivot???), Putin is set to visit China, Blinken is in Ukraine as Russia pushes ahead on the northern front and finally Mexico is stuck between China and the US as BYD launches 'Shark' truck that will be built on the southern border.
Steno Research Great Game - WHY PUTIN FIRED SHOIGU AND WHY BIDEN IS GOING TOUGH ON CHINA
Bloomberg - Macron Puts French Banks in Play With Plan to Transform Europe
FT - Jeremy Hunt bets on creating a $1tn ‘British Microsoft’
The Guardian - ‘Who do you trust to keep you safe?’: Sunak to fight next election on UK’s security
The NY Times - How Biden’s Trade War With China Differs From Trump’s
Mish Talk - BYD Unveils the “Shark” a Plug-in Hybrid Pickup Truck Built in Mexico
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Top Pieces
Discovered on Harkster.com
Bloomberg - OpenAI Launches Faster and Cheaper AI Model With GPT-4o
American Economy Daily - Rise of the Memes. GME
FT - GameStop and AMC shares surge for second day in ‘meme stock’ revival
The Overshoot - Fed Balance Sheet Shrinkage May Be Smaller Than It Seems
VanEck - Trends with Benefits #118: AI-Powered Investing with Doug Clinton
Steno Research - 5 KEY CHARTS FROM THE BEST SURVEY ON THE US ECONOMY
The MacroTourist - TIME TO LEAN INTO THE CANADA SHORT
Axios - Biden’s polling denial: Why he doesn't believe he's behind
BlockScholes - Crypto Derivatives 14th May 24
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