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Economic Indicators Released Friday
Bad news for the Bank of Japan with Tokyo Core CPI higher than expected. They really are stuck between a rock and a hard place.
In the UK things are definitely moving in the right direction, unlike in the US and Canada.
Zooming out 10 year rates are
Rising in the US and Japan as high debt levels force rates higher
Stable in UK and Canada, as UK economy is growing and it's the centre of global capital markets. Stable in Canada as it's economy is (maybe that should be was!) linked that of the US except much lower debt levels
Falling in EU, Australia and China. Falling in EU as leadership slashing rates as they understand tariffs are actually deflationary. Falling in China as the economy is being dismembered by the trade war. Falling in Australia because the economy is stagnant but virtually no debt.
Equity markets ended the week on a positive note.
US Equities
Trump says China's Xi called him amid ongoing confusion over trade talks [Yahoo! News]
Trump ‘Misjudged’ China on Trade War, Chinese Adviser Says [Bloomberg]
100 days+ of Trump and time for investors to reassess
Importantly in the last week we have seen
Rebuilding US manufacturing clearly isn't working when the poster child doesn't follow the instructions:
Apple aims to source all US iPhones from India in pivot away from China [FT]
In fact not much has changed
But
When the equity markets collapsed on 4th April, US Govt bonds and the USD were the problem not the solution.
Time for a decision.
Good for investors as Gold didn't get out of control and the much needed pull-back has occurred. Don't expect the relentless demand for bullion to wane so that dip may not last long.
GOLD / USD Daily
China considers setting up overseas warehouses for Shanghai Gold Exchange [Reuters]
Bitcoin is looking good. The backdrop is super positive for once and if FED etc forced to flood markets with liquidity, we know what that means for price.
BITCOIN / USD Daily
Cryptocurrency campaigners call for Swiss central bank to hold bitcoin [Reuters]
Bargains abound but no takers?
US Economic Indicators
Nothing data wise, just US consumers loading up in front of tariffs.
10 year rates have been going up since the world economy came out of COVID and particularly since the FED cut rates by 100bps.
Bessent is trying to force rates lower to save a US default, but so far he's failed. Would the FED cutting actually bring down 10 year yields? Trump should be careful what he wishes for.
US 10 Year Government Bond Yield Daily
China Economic Indicators
Still no rate cuts but those 10 year yields are pushing the all time lows again.
China 10 Year Government Bond Yield Daily
Japan Economic Indicators
Higher inflation seems to be the view on the Japanese economy, although it's a patchy story.
The strength in the YEN recently (USD weakness) pushed the authorities to want to weaken it, so they can't hike rates.
The markets are in control anyway.
USD / YEN Daily
EU Economic Indicators
A lot of press regarding Europeans not wanting to go to the US, and if they do they want to take burner phones. Even employees of US companies in Europe don't want to go.
Although this might seem to be a lighthearted story, it actually clearly reflects how much the rest of the world has turned on the US and startling is how quickly the change happened.
This won't be reversed.
Europeans Boycott United States
Those German funding rates keep falling and more debt with a lower yield, reflects markets that believe in the EU leadership more than the US leadership. Credibility is everything particularly if you're insolvent.
Germany10 Year Government Bond Yield Daily
ECB’s Holzmann Sees Disinflationary Impact From US Tariffs [Bloomberg]
United Kingdom
UK Economic Indicators
UK is doing better and taking it's chances to negotiate better outcomes than most.
UK must pay to join EU defence fund, says Brussels [FT]
Canada Economic Indicators
All over the place. Those inflation numbers don't look great. Canada's future is firmly in someone else's hands. Election on Monday shouldn't make any difference.
Australia Economic Indicators
A nothing burger of a week in Australia. The results of the election won't change a thing. Economy is in the quicksand and lower rates won't help.
Australia 10 Year Government Bond Yield Daily
Australia's Albanese pledges to set up critical minerals strategic reserve [Reuters]
RBA says interest rates don’t hit households as hard as you’d think [AFR]
Bank of Japan won't do anything on Thursday as markets have firm control of currency and rates.
Nonfarm Payroll and PCE. We'd better hope for a deflationary bust and a really negative NFP because the opposite would cause a massive meltdown in bond prices.