Read on the Trading Floor - 18 June 2024
Today’s focus… summer calm
Macro Themes At Play
Theme 1 - CB speak-athon
Theme 2 - Wages, inflation, consumption...
Theme 3 - OATs threading water
What else is being read on harkster.com
Theme 1 - CB speak-athon
RBA unchanged at 4.35%, discussed a rate hike and pledged vigilance on sticky inflation.
Bloomberg - RBA Discussed Rate Hike, Pledges Vigilance on Sticky Inflation
Westpac - RBA More Alert and Less Certain in its Inflation Fight
ECB message: French conditions are not disorderly. Prioritise price stability over financial stability.
Econostream - ECB’s Knot: Decisions Should Be Based on Data, Not on Future Developments
Econostream - ECB’s de Guindos: Urgently Need to Increase Investment in the EU
Fed speakers are expected to remain in-line with JPow
Harker in the one cut camp. (Bloomberg - One Rate Cut in 2024 Is Appropriate Based on Outlook)
Barkin data dependent. (MorningStar - More data is needed before any changes are made to interest rates)
Collins is remaining patient. (Bloomberg - Collins Says Fed Shouldn’t Overreact to Positive Price Data)
Up next from the Fed... Kugler (18:00), Logan (18:00), Musalem (18:20) and Goolsbee (19:00)
Theme 2 - Wages, inflation, consumption...
Mixed data set during a quiet summer session. Zew improved MoM but missed the mkt's lofty expectations whilst US retail sales disappointed. Shrinking household savings, dwindling consumer demand and softer housing starts are re-igniting the disinflation narrative. That is until one see's a 7% wage increase demand... The deceleration continues but at a glacier pace relative to expectations. Such wage increases will only serve to re-fuel price pressures.
FT - German union unleashes battle over pay by demanding 7% wage rise
Inflation Guy Blog - Inflation Deceleration Continues – But Not Enough
Steno Research - Trade Alert: Time to spend again
ING - Cooling US consumer spending points to weakening inflation threat
Theme 3 - OATs threading water
The storm clouds have dissipated and French assets continue to thread water following last week's VAR shock. The impending fiscal battle between Paris and Brussels is front and centre of the streets research.
Bloomberg - French Bonds Drift as Market Takes Stock After Sharp Selloff
Bloomberg - Le Pen’s Party Asks French Voters for an Absolute Majority
The Economist - France’s next prime minister faces a brutal fiscal crunch
FT - Brussels to chide France over deficit as spending clash looms
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Top Pieces
Discovered on Harkster.com
FT - Rich countries plan to buy more gold despite record price
Emerging Market Watch - Hungary: MPC slows pace of monetary easing with 25bps rate cut
Livesquawk - ZEW German Investor Outlook Edges Higher As Inflation Concerns Mute Optimism
Apollo Academy - Banking Sector Outlook
Steno Research - Great Game – Why Tesla is winning the EU-China trade war
NY Fed - Banks and Nonbanks Are Not Separate, but Interwoven
The Blind Squirrel - Pod: Career Risk and Sirens' Songs
Understanding AI - How consumer demand could limit AI-driven growth
The Capital Spectator - 10-Year US Treasury Yield ‘Fair Value’ Estimate
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