Ian Reynolds
Germany In Recession
Germany, Europe's largest economy, hits recession as inflation hits consumers [ABC]
Germany is not the global manufacturing powerhouse that it used to be, but this sends a strong message to the rest of the EU, who depend on Germany for associated employment, supplies etc
USD vs US Rates
Rates and USD 100% in sync
But which one is leading. This week they're following each other so it becomes self-sustaining. 10 year yields up 35 basis points in 2 weeks against the backdrop of a potential FED pause? Doesn't make sense. Bank crisis or debt ceiling that's old news. Something happening here.
Mixed US Inflation Supports Another Hike
Core Annual Personal Consumption Expenditure Index is the FED preferred prices-paid metric.. Trouble is, it's not going down
In Case You Missed It
Debt Ceiling Old News
Biden, top Republican say deal on debt ceiling very close
Global Liquidity
Liquidity is being sucked out of the global economy at the fastest rate since the great depression. And the chart of US M2 above shows that there is still a great deal of QT to be done to get back to the monetary base of (even) pre-Covid.
Powell On The Air
Fed's Powell warns banking crisis could tighten lending, slow US economy
Fed Minutes from policy meeting 2-3 May 2023
US Credit Rating Watch
Fitch Considers U.S. Rating Downgrade as Debt Talks Drag
UK CPI Shocks Markets (and BOE Governor)
Australia
Australia retail sales supports weak consumer sentiment data.
‘Fully tax-deductible’: Andrews tax rise hits federal budget
Electricity Price Rises by up to 25% QLD VIC NSW SA
MPs told to expect more rate rises (by RBA Governor)
Australian supermarket food prices have increased by a new peak of nearly 10 per cent over the past 12 months, outpacing annual inflation as the cost of living continues to rise.
Coles and Woolworths food prices rise by 9.6 per cent in past year, outpacing inflation rate
Australian PMIs show strength
AUD / USD Trade Update
Short 0.7000
Short 0.7100
Short 0.6775
Stop 0.6825
Positive carry
The triple top holding just above 0.6800 forced support to crumble and we closed below the 0.6600 fib (23% retracement of 0.8000 to 0.6175 move).
Expect a revisit to the scene of the crime at 0.6575 and move down to 0.6180. Too early to move the stop down yet.
This Week's Economic Indicators [London time]
