Crunch Time
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Overnight
Economic Indicators Released Friday
Nothing from the US data-wise and a market determined not to react to headlines, saw a calm session with global equities flat.
Something big's coming.
Global Equities
Breaking
Trump Strikes Iran Nuclear Sites, Threatens More Hits
- US jets hit Iran’s three key nuclear sites: Fordow, Natanz, Isfahan
- Trump says key nuclear sites “completely and totally obliterated
- Trump warns US will go after other targets if peace doesn’t come
- Sirens, explosions heard in Israel as Iran strikes back
- Iran says it reserves all options to defend itself
- No signs of radioactive contamination, IAEA says
U.S. Prepares Action Targeting Allies’ Chip Plants in China [Wall St Journal]
Crunch Time
Markets will be following FED Chair Powell's Semiannual Monetary Policy Report to Congress before the U.S. House Financial Services Committee on Tuesday and Wednesday this week very carefully.
It's the culmination of months of argument with Mr Trump, and now seemingly a split in the FED Open Market Committee's view on interest rates. On Friday Trump continued the war on social media.
Trump: ‘Maybe I’ll have to change my mind’ about firing Powell [The Hill]
But now there is clear dissension in the ranks.
Waller Says Fed Could Cut Interest Rates as Soon as July [Bloomberg]
Federal Reserve starts to split on when to begin cutting US interest rates [FT]
Powell's determination for his legacy to be like Paul Volcker is risking a colossal error in monetary policy. Recent FED mistakes have been keeping rates way too low since the GFC and not hiking until it was too late post COVID. There's no room for error and being data dependent is passing the buck. He has led a FED without a strategy. His day might have come.
Precious Metals / Commodities
Brent consolidating above resistance with that shooting star looks very bullish and all the news should support this.
Bitcoin (& Crypto)
Crypto is the only market open to hedge risk assets with over the weekend so price discovery will show up here. Looks like the second attempt at a new all time high has failed so that leaves only one to come.
CRE / Banks / CLOs
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The liquidations continue. Soon this capital destruction will show up in financial markets.
United States

US Economic Indicators
Not so much data this week but what there was screamed rate cuts.
The USD seems to be consolidating, at least for now and bond yields are reaching a point where a move is going to happen this week one way or another.
US 10 Year Government Bond Yield Daily
U.S. Prepares Action Targeting Allies’ Chip Plants in China [Wall St Journal]
Why Florida’s Condo Owners Are So Desperate to Sell [Wall St Journal]
China
China Economic Indicators
Stronger than expected retail sales was a surpise but otherwise a continuing weakening of the economy. No rate cut as some expected. Xi is happy that China is under the radar right now. Surely even more stimulus is on it's way.
China’s property sector has been in an extended slump. Shrinking population is making it worse [CNBC]
Japan Economic Indicators
Regulators finally tried to address the 30 year problems with the Japanese Government Bond market, as inflation picks up strongly.
Japan issues rare warnings on bond market in policy roadmap [Reuters]
Japan to promote domestic ownership of JGBs, policy draft shows [Reuters]
Why This Matters- Unusual tone: It’s rare for Japan’s government to openly flag bond-market risks in its roadmap.
- Shifting roles: With BOJ and insurers scaling back, ensuring stable domestic holders has become a priority to prevent volatile swings in long-term rates.
- Policy toolkit adjustments: New bond types and buybacks are tactical moves to maintain liquidity and control of the yield curve.
And it seems to be working albeit with a very small sample of data. 30 year rates have gone from 2.2% to 3.2% recently along with failed bond auctions and massive haircuts for domestic buyers. Too little, too late?
Japan 30 Year Government Bond Yield Daily
Japan scraps US meeting after Washington demands more defence spending [FT]
Rice prices in Japan more than double in May — core inflation jumps to highest levels since 2023 [CNBC]
Europe
EU Economic Indicators
CPI at target and wage growth under control has underpinned the Euro's break out of it's secular decline since the GFC. The economy is rebounding helped by capital flows out of the US.
EUR/USD Monthly
United Kingdom
UK Economic Indicators
Terrible retail sales but weakening CPI tells us the recovery is faltering. Certainly GBP/USD looks to be topping out.
GBP/USD Monthly
The big talk domestically is the continuing tax grab by the government. A lot of capital and brains are leaving the country.
Canada
Canada Economic Indicators
Weakness all over the economy but a recently strengthening of the CAD against the USD has confused the narrative.
USD/CAD Monthly
Australia
Australia Economic Indicators
The recent fall in the USD has pushed AUD/USD back to the downtrend at roughly 0.66. The economy is flatlining so any direction is from the USD.
AUD/USD Monthly
Australia thinks of itself as an international player. Trump delivered a reality check [Sydney Morning Herald]
Sydney’s Bathla juggles dozens of property projects and a $2.7b debt [AFR]
Interesting
Under shadow of Trump warning, Africa pioneers non-dollar payments systems [Reuters]
Bloomberg Technology: SoftBank's Son Pitches AI Hub [Bloomberg]
What's Next?
US Monthly Core PCE late in the week will be of interest but every word of Powell's 2 day testimony will be inspected closely.
Will the US bombings of Iran finally make stock markets crack?