Inflation is Back

Ian Reynolds February 9, 2025

Photo Illustration by Elizabeth Brockway/The Daily Beast

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US Nonfarm Payroll January 2025

Just when you thought it was safe to get back in the water....

Nonfarm payroll lower than expected but previous revised higher. Unemployment rate ticked down despite all the anecdotal evidence of job losses. OMG average hourly earnings much higher than expected.

Let's try and brush that aside. But no...

University of Michigan Inflation Expectations February 2025

U.S. Michigan 1-Year Inflation Expectations

Inflation expectations, as much referenced by Comrade Powell, are a driver of consumer behaviour and if it's going to be more expensive next week, might as well buy it now. And that's a huge increase.

Breaking

Trump says he will announce reciprocal tariffs on many countries next week [Reuters]

Fed's Goolsbee warns of potential inflationary impact of tariffs [Reuters]

Bessent Says Fannie-Freddie Release Depends on Mortgage Rates [bloomberg]

China’s Central Bank Buys More Gold as Prices Hit Record [Bloomberg]

Gold

Massive movements of Gold into COMEX from London ahead of tariffs. 2 month queue at the Bank of England tells us more Gold is going out than in stock and the borrowing rates shooting up tell us that BoE / bullion banks are calling back their loan stock.

Gold entering the U.S. from Hong Kong (and China) will now have a 10% import tariff added.

And China buying bullion doesn't help liquidity.

Also see shorts in Gold and Silver ETFs being covered.

Gold at 3,000 USD imminently ?

Gold / USD Daily

London Gold Pool

Gold Dealers Sell BOE Bullion at Discount in Tariff Turmoil

Bitcoin (& Crypto)

Bitcoin decididly undecided

btc

Bitcoin / USD

United States

The USD goes into a bull flag as the tariff war gets started. Lots of "experts" calling for a top in the USD because the US wants a lower USD (they do) but right now a strong USD is the battering ram for tariff concessions.

dxy

DXY Daily

Canada

Positive employment numbers for Canada. The CAD doesn't care, as it's been whipped to pieces and market makers are enjoying a few weeks respite 'til the T word comes up again.

Don't forget BoC announced QE starting March.

Canada Unemployment January 2025

Canada Unemployment Rate January 2025

cad

USD / CAD Daily

China

Some strength in Chinese stock markets as retail investors concentrate on Gold and shares. Not real estate which is still falling.

hang seng

Hang Seng Daily

China’s new home prices in 70 cities dropped by 5.3% year-on-year in December 2024, slowing from a 5.7% decline in the previous month and marking the softest fall since August. This marked the 18th consecutive month of decreases, amid continued efforts from Beijing to reduce the impacts of a prolonged property weakness, such as lowering mortgage rate, cutting home buying costs, and enabling local governments to purchase unsold housing units and idle land using proceeds from special bonds.

China house prices fall for 18 consecutive months [Trading Economics]

China starts pilot project allowing insurance funds to invest in gold [The Business Times]

Japan

BoJ and MoF now talking the end of deflation so rates can rise further and the YEN has strengthened considerably in the last week. The authorities finally managed to get it away under the cover of Trump / tariffs.

USD / YEN Daily

Europe

Like China, Europe is still falling apart and Trump will have saved some special tariffs for his friends at the EU

Germany Industrial Production December 2024

CRE / Banks / CLOs

United Kingdom

The UK is building up to a forced change in government with Farage now winnng in popularity and the incumbent government thrashing about in agony. Cancelling elections is a sure way of enraging the British masses.

Local elections for millions postponed as Nigel Farage hits out at government [Sky News]

UK house prices rise to record high [FT]