In the US, inflation is still running hot, the debt ceiling has been raised, regional banks have been ringfenced, and the labour market is still strong. NFP saw a solid headline (4 sigma) beat, but the underlying details were worrisome as accompanied by a rise in EUR. Headline has beaten 12 of the last 13 prints, but the losses came from the household survey. Are the Fed being too cute with a June pause and indicating a July hike?
With US issuance set to rise as TGA is rebuilt but investors still sitting short equities, it feels like we’re at a crossroads between holding cash over the summer or chasing the AI narrative. 5% yield with limited duration or credit risk has been the trade YTD, but with Nasdaq a keen benefactor of the AI narrative .. if everyone is long cash, standing on the sidelines, where is the bad news coming from . . . could we see a FOMO summer rally?
Key pieces that capture last week's defining narratives...
WSJ: Nick Timarios Fed pause in June
JPM Podcast: What the debt ceiling resolution means for rates markets
The Last Bear Standing: Re-Funding the Treasury
UniCredit US Jobs Report: Mixed and unlikely to stop the Fed pausing in June
Zerohedge: China Property Bailout Rumors Send Global Markets Higher
FT: Erdogan signals economic shift for Turkey as he revamps cabinet
ScotiaBank: Macklem's Chance to Prove He's Serious
Tic Toc Trading: Weekly Plan
Marc to Market: Australia and Canada Hawkish Holds, US bill issuance jumps
The MacroTourist: Maybe it’s just the fantastic gifs/memes that The MacroTourist opens with in each piece, but Harkster HQ always enjoy Kevin Muir's newsletter. His extremely honest approach is well defined by his favourite tagline... "all I bring to the party is 25 years of mistakes". He delivers a concise synopsis on cross-asset topics alongside open-minded analysis of current market conditions without a bearish or bullish slant. He also looks to highlight his best risk/reward trading and investing opportunities. Check out his latest below . . .
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Thanks for the kind words. Much appreciated.
History for sure rhymes, doesn't it?
I'd like to know your sophisticated take on our opinion:
https://www.amazon.com/dp/B0C6V6J7KD