Read on the Trading Floor - 18 April 2024
Today’s focus… Ccy wars, the Halving, AI and much more
Macro Themes At Play
Theme 1 - Currency Wars
Theme 2 - The Halving
Theme 3 - AI in the headlines
Further reading and listening of note
Theme 1 - Currency Wars
Trump takes the headlines back from Biden's steel tariffs with Robert Lighthizer, one of his key advisors floating the idea of "dollar devaluation". That is certainly one way to inflate away the covid debt payments and rebalance the US trade balance with China and the RoW. However, it seems like a classic Trumpism, something that grabs the headlines but is very unlikely to come into practice given the checks and balances within the US political system.
Furthermore, given how many dollars JPow has printed since 2020 as part of the Fed's response to covid, isn't the US already running a weak USD policy????? Gold isn't trading at 2400 because of a strong USD policy. Those who traded FX in the years post the GFC, will remember trading the currency wars as FX markets navigated a wave of global CB's (BoJ, SNB, CNB, ACB's etc) that implemented policies to weaken their ccy to boost growth, trade and fight deflation.
GoldFix Substack - Politico says "Trump trade advisers plot dollar devaluation"
Institutional Economics by Stephen Kirchner - Trump versus the impossible trinity
Politico - Trump trade advisers plot dollar devaluation
Bloomberg - G-7 Reaffirms View That Disorderly FX Moves Can Harm Economy
Theme 2 - The Halving
It's been interesting to watch the lack of momentum in XBT despite the passing of the April 15th tax date and the relative consolidation/bounce in correlated assets e.g. QQQ. The ETF story has dwindled along with the price in recent days and
makes an excellent point in today's piece "Because of inflation resulting from unchecked token creation, crypto needs constant inflow of capital for prices to continue rising." How scarce is the crypto universe if there is a never-ending supply of altcoins? Elsewhere the halving is finally upon us and below there are some good articles on what to expect next.Fidenza Macro by Geo Chen - Bitcoin ETF flows are bearish
Steno Research - Crypto Moves #24 - Bitcoin Is A Safe Haven When There’s Nothing to Worry About
VanEck - Bitcoin Halving Explained: History, Impact, & 2024 Predictions
Unchained - Is the ETH Spot ETF Denial Priced In?
CoinDesk - Bitcoin (BTC) Reward Halving Partially Priced, No Big Rally Expected After the Event: Deutsche Bank
Source Daily Chartbook
Theme 3 - AI in the headlines
We've had Obama's Facebook election, Trump's twitter election, will this year be the AI (deepfake) election....? Elsewhere Biden continues to invest big in AI chip infrastructure, spending billions on chip manufacturing plants. With such a fiscal impulse, will the Fed need to hike next not cut...? After all both Trump and Biden plan to spend if they come into power....
Fortune - AI deepfakes could decide U.S election, experts warn
Business Insider - Microsoft Targets 1.8 Million GPUs by End of 2024: Document
Bloomberg - TSMC Lowers Chip Market Outlook as Consumer Weakness Persists
Bloomberg - Micron (MU) to Get Over $6 Billion in Chips Act Grants in Announcement Next Week
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Top Pieces
Discovered on Harkster.com
Fortune - Nancy Pelosi to reveal ‘The Art of Power’ in memoir
Bloomberg's Simon White via ZeroHedge - It's Time To Pay Attention To Funding Risks Again
St Louis Fed Blog - Tracking inflation with sugar and sweets?
Credit from Macro to Micro - The new-old regime
Brent Donnelly am/FX - Dead Zone
Compounding Quality - 🏆15 Quality stocks
MS Wealth Management - Two Paths for the Fed
FT - Christine Lagarde says US plan to raise debt against Russian assets carries legal risk
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