Ian Reynolds
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Overnight
University of Michigan Survey March 2025
US equities hammered late on Friday as PCE numbers (see below), slightly higher than expected, unsettled markets and Michigan report confirmed the worst: higher inflation expectations, lower consumer confidence and Atlanta FED predicting Q1 GDP at negative 2.8%, and adjusted for imports and exports of gold, is -0.5%. So you can have really bad or just bad.
World Equities
And bonds rallied hard into the close. It will be a tense week ahead of Liberation Day.
US 10 Year Government Bond Yield Daily
Breaking
CK Hutchison will not sign deal to sell strategic Panama ports next week, sources say [Reuters]
Japan, China, South Korea meet at geopolitical 'turning point in history' [Reuters]
Precious Metals
Gold surged to new all time highs and is now breaking above the uptrend channel. The temptation to short it is huge, but it could go parabolic. The big question is still unanswered and hidden by the Fort Knox FUD: Who is importing so much gold into the US?
Forget the BoE being insolvent (supposedly) and all the other doom. Who is buying and, more importantly, why are they buying?
Bitcoin (& Crypto)
Risk assets inc BTC dragged down by equities and technical analysis experts now predicting measured moves below 70,000 now but are they too bearish? Next macro level to buy is the double bottom at 76k as a W shaped bottom.
BITCOIN / USD Daily
CRE / Banks / CLOs
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Price discovery is a finally happening as losses are crystallised and projects recapitalised. The FED will need to invent yet another program to help regional banks survive. It'll be interesting to see how the Treasury reacts to that.
United States
US Economic Indicators
Economic data was a real mix this week. Even Core PCE YoY up at 2.8% wasn't that bad but it really set the tone of equity markets where now almost all data is bad.
U.S. Treasury, General Account: Week Average
Mr Bessent has drawn down the Treasury General Account and bought back some Govt issued assets, but that's not leaving a lot in the account or maybe he's reverting to pre-Covid levels.
M2 (M2SL)
US money supply now rising at possibly the highest rate ever. Markets are praying this will boost Bitcoin (particularly) and smooth equities downtrend. Certainly the tapering of QT by the FED is manoeuvering policy to be able to stimulate, and you know what that means.
Bessent has been very transparent about the administration’s game plan. The strategy revolves around three key initiatives:
- De-leveraging the government by shedding excess labor.
- Deregulating the financial system, which, in turn, re-leverages the private sector.
- Encouraging private sector employment, allowing those initially displaced to be absorbed by a growing economy
- Extending balance sheet capacity to banks (from smaller institutions to large firms).
- Reducing tightened collateral requirements, making it easier for banks to lend.
- Implementing government-backed incentives to encourage lending to lower-credit borrowers.
- Loosening Tier 1 capital ratio requirements.
- Softening CCAR stress testing standards.
- Raising the asset threshold for SIFI designations
The goal is clear: give banks more rope to take on risk, stimulate lending, and drive business growth following an economic pullback.
There’s a big key in understanding when in the year they plan on making a push for the deregulation. That itself might be a huge springboard for markets AFTER the pullback.
From Kris Sidial [X]
China
It always make me nervous when there is no data out if China in a whole week.
China’s life insurers could unleash powerful new gold demand [ForexLive]
Japan
Japan Economic Indicators
GDP solidly 2 to 2.5% and 10 year rates 1.5%. Either massive crash incoming or bonds must double in yield.
Europe
EU Economic Indicators
Economic data shows the economy has stabilised in the EU and particularly in Germany. Now is the time to drive investment and capital as US seems to be locking itself in it's own jail cell. There hasn't been this opportunity since the Berlin Wall came down.
Banks are big buyers of bonds and since the market hiked yields due to increased borrowing for defence, those yields have dropped back 25bps.
EU 10 Year Government Bond Yield Daily
United Kingdom
UK Economic Indicators
Things looking rosier in the UK. The consumer is back, inflation still ticking lower but business investment and confidence is really low and unlikely to improve until Government can stop trying to solve problems for others and concentrate on the core issues at home. The first being that there no no money to give out. Maybe austerity could solve a lot of problems.
Bond yields looking to break higher
UK 10 Year Government Bond Yield Daily
Canada Economic Indicators
Canada is in the eye of the Trump storm and is thrashing about killing itself. An election in a month may calm things down but that's too long to wait.
Small Business Optimism in Canada Collapses to 25-Year Low [Bloomberg]
Australia
Australia Economic Indicators
Election time in May. Another country without a compass. The election could bring more of the current mess or a messier mess. No direction at all. When the Australian residential property bubble bursts there will be widespread pain for a very complacent population.
Canberra’s top bureaucrats best paid in the world [The Australian]
"For reasons beyond mortal reckoning, Australia’s top public servants are apparently worth more than double and triple their US and UK counterparts. Perhaps we could use our own version of Elon Musk?"
Interesting
What's Next ?
RBA policy meeting on Tuesday and Nonfarm payroll are the highlights next week economically but no-one cares. April 2nd is Liberation Day for Trump. And there is almost no way markets won't be super volatile.
This Week's Important Economic Indicators [London time]
![This Week's Important Economic Indicators [London time]](https://vip.suberia.capital/hs-fs/hubfs/30032025/indicators.jpg?width=658&height=747&name=indicators.jpg)
