Read on the Trading Floor - 16 Nov 2023
Today’s focus… US10s finding a new equilibrium?
Macro Themes At Play
Theme 1 - 4.5% the new equilibrium?
Since Tuesday's CPI print hit the tape, US10s have been consolidating in a 4.40-4.55% range. A day after better-than-expected retail sales, Walmart's outlook warning for the US consumer as well as a drop in US IP (-0.6% vs exp -0.3%) has us back testing the bottom of the range.
Will we see 5.0% before 4.0%? For now, we've found a new equilibrium around 4.5% as positioning re-balances and the opposing themes fight for supremacy
Pushing down from above - trend in inflation, recession watch, continuing claims surging to a 2year high, Walmart guidance, covid savings dwindling, landlocked home owners, credit tightening, lower bank lending.
And up from below - issuance, issuance and more issuance... resilient economy, higher for longer, real wage growth, YCC widening from BoJ, China demand dropping, deficits, election year fiscal give away, downgrade watch....
Source MarketWatch
This debate is playing out on Harkster.com…
WSJ - Wall Street Loves Washington’s New Debt Approach—for Now
Ashenden Finance - Soft landing? What does the street think
ZeroHedge - Employment Is Sending Signals: Recession Or Normalization?
The Capital Spectator - US Q4 GDP Outlook Appears On Track For Modest Growth
Calculated Risk - Industrial Production Decreased 0.6% in October
The Daily Spark - Residential Investment as a Share of GDP Is Low
In particular HarksterHQ would like highlight another excellent piece from
, Capital Flows and Asset Markets - TLT - THE NEW WIDOWMAKER. One incredible stat, although should we be surprised that governments find it easier to tax companies over voters... "US corporate tax take is still at 2006 levels, while individual and social insurance tax take has soared."Theme 2 - more CB speak...
Is it an issue that there are more CB speeches today than top tier data? We're grateful to our friends at Econostream who do a magnificent job capturing all that is said by the board members, especially those on the ECB.
Econostream Media - ECB Lagarde: Cannot Be Complacent About Financial Stability Risks
Econostream Media - ECB's Knot: Additional Reforms Needed for Greater Financial System Resilience
Econostream Media - ECB’s de Guindos Calls for Macroprudential Approach to Non-Banks
Bloomberg - Bank of England’s Megan Green Says UK Rates May Need to Stay Higher for Longer
Theme 3 - As F1 looks set to hit Vegas...
Ticket sales aren't living up to the initial hype but we're all still going to watch...
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