Limit Up!

Limit Up! 8th January 2025

Written by Ian Reynolds | Jan 8, 2025 4:08:07 AM

Overnight

Equities closed lower and BTC was smashed as treasury bond yields begin to get alarmingly high and Trump's press conference was both confronting and confusing.

US treasuries tanked with yield approaching 4.75%. In October 2022 yields hit 5% and markets went illiquid. Recent comment from primary dealers suggest that no-one is too keen to see that 5% again. The treasury buy-back was 5x oversubscribed as dealers took the opportunity to offload off-the-run stock to where they came from.

US 10 Year Govt Bond Yields Daily

Breaking

Trump Threatens ‘Economic Force’ to Make Canada 51st State [Bloomberg]

Donald Trump refuses to rule out force to take Greenland and Panama Canal [FT]

Foreign Exchange

The dollar was higher, following yields, but still relatively subdued. We're all waiting for markets to break one way or another. 

Vietnam Closely Watching FX Market After Dong Fell to Record [Bloomberg]

Equities

The Hang Seng and other Chinese exchanges are struggling to keep the index price above where stimulus started. 

Hang Seng Daily

Bonds

30 year JGB yields highest since 2011

30 Year Japan Govt Bond  Yield Monthly

Commodities

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

Crypto

Having eluded the head and shoulders breakdown, BTC suffered a bearish outside reversal. Short term we may test the scene of the crime breakout now at approx 87,000.

Bitcoin Daily

Interesting

Indonesia joins Brics as newest full member, Brazil foreign ministry says [South China Morning Post]

Magellan co-founder Chris Mackay lambasts private credit in tirade [AFR]

Mohamed A. El-Erian [X]

An interesting dynamic in the corporate bond markets: On the one hand, there is a rush of issuance by companies, including (per Bloomberg) “Europe see[ing] more issuers than ever in [a] single day” – this as corporate treasurers look to prefund/refinance ahead of greater macro uncertainty and amidst some of the tightest spreads in three years (chart). On the other hand, investors are keen to buy the bonds, attracted by some of the highest “all in yields” in quite a while. This dynamic holds together as long as credit-related risks remain well-contained.
 
 
Eurozone inflation is ticking up. Maybe France isn't but Germany definitely is
 
 Released on Monday
 

Germany CPI December 2024

 

 Released on Tuesday

France CPI December 2024

EU CPI December 2024

US

US ISM Non-Manufacturing December 2024

U.S. JOLTS Job Openings November 2024

Australia

Australia Monthly CPI Indicator YoY November 2024

Inflation rises to 2.3pc, PM rejects responsibility for high rates [AFR]

Economic Indicators Today

US ADP Employment and Jobless Claims today instead of Thursday holiday

FED's Waller speaking