Limit Up! 6th May 2025

Ian Reynolds May 5, 2025

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Overnight

US Non-Manufacturing ISMs

Service purchasing managers are more optimistic but inflation expectations are significantly higher. The old chestnut that Powell comes up with every meeting that "inflation expectations are well grounded" will need some explaining on Wednesday.

Meanwhile markets are fixated on asian currencies which have suddenly strengthened against the USD.

"Asian countries are prime candidates for an FX accord: big trade surpluses, weak currencies, and depend on U.S. protection. Investors in those countries hold lots of USD assets and they may need to sell some just in case. It could become self-fulfilling." @FedGuy12, Joseph Wang on X

And equities ended lower

US Equities

Breaking

China, Japan, South Korea and the countries of ASEAN just issued a joint statement in which they take a unified stance against "escalating trade protectionism".

Joint Statement of the 28th ASEAN+3 Finance Ministers’ and Central Bank Governors’ Meeting [ASEAN]

BESSENT: IF WE CAN TAKE AWAY THE CREDIT RISK OF THE U.S. GOVERNMENT, INTEREST RATES WILL COME DOWN

Bessent woos global investors with prosperity pitch [AFR]

Commodities

Gold looking to make a bottom here as the strong reversal yesterday reflected the continuing inability of the US 10 year treasury to rally. Bessent even talking about the creditworthiness of the US was a red flag, aren't these bonds risk-free?

GOLD / USD Daily

Bitcoin

BTC was weak over the weekend and Labour Day but staged a solid recovery.

BITCOIN / USD Daily

Equities

At last something to grab hold of on the Tesla charts. All news is really, really bad and you know what that means!

TESLA Daily

Bonds

It's unsettling that after 100 days of the new US administration, 10 year yields are still 4.35%. The 10 year auction will be closely watched tonight.

US 10 Year Government Bond Yield Daily