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Overnight

China Retail Sales April 2025

Industrial production in China edged higher in April but retail sales edge lower as China pumps out more exports in front of tariffs.

EU CPI April 2025

Totally steady inflation in the EU. Needs to keep moving lower to justify even lower interest rates

A crazy market on Monday as concerns about US creditworthiness raised it's ugly head thanks to the Moody's downgrade and Bessent mentioning it repeatedly. It follows his letter to Speaker Johnson on 9th May pleading for an increase or suspension of the debt ceiling.

Rates went up 10 bps as Asia's knee-jerk reaction hit, but once US markets came in we went all the way down again solidly all afternoon.

US 10 Year Government Bond Yield 5 Mins

There is clearly a line in the sand with UST10 at 4.5% and UST30 at 5% but what is keeping yields from going higher? 

It smacks of Yield Curve Control.

Equities did the same. ending unchanged.

US Equities

RBA today, with some experts even going for a 50bps cut, and lots of pressure from the government.

Breaking

‘Reverse Yankee’ deals hit record as US companies flock to euro debt market [FT]

China urges U.S. to act ’responsibly’ after Moody’s downgrade [investing.com]

UK-EU summit: Starmer and von der Leyen hail 'new chapter' after agreeing post-Brexit reset deal [Reuters]

Japan PM says country’s fiscal state is "worse than Greece’s", rejects tax cuts [investing.com] 

Bonds

Yields backed up 4.57% as markets reacted to the downgrade, but as US markets opened it was clear that there wouldn't be any follow through. The shooting star pattern suggests downside in yield only negated by a close above 4.57%. The head and shoulders is still a suggestion until price closes above the neckline.

US 10 Year Government Bond Yield Daily

Commodities

Gold rallied and stayed higher during the volatility. It could be bear flag consolidation but too early to say. A break above 3,265 would be more positive.

GOLD / USD Daily

Bitcoin

A wild day with the initial break higher to 107,000 then back through the channel to 102,00 and finally back above again. The close today is vital. Divergence beginning to appear which we'll cover at the weekend, with more bars available.

BITCOIN / USD Daily

Foreign Exchange

Despite 10 year yields coming back down during the us session, the USD still ended lower and looking pretty limp.

DXY Daily

Equities

Overbought and now hitting a brick wall, NASDAQ looking to fill the gap down to 18,000. Even if you're a bull this would be a good result.

NASDAQ Daily

Interesting