🚨Yesterday (red arrow): biggest short squeeze since covid

JPM still cannot get enthusiastic about the trade war truce: The trade war shock is still material. Assuming 41% on China and 10% elsewhere (and with sector tariffs), we now estimate an effective ex-ante tariff rate of 14.4%. This is akin to a $475bn tax hike on US households and businesses, worth 1.6% of GDP, sitting close to the largest tax hike in the post WWII period. [ignore macro FUD, BTFD]

Elon Musk, Sam Altman, Larry Fink to attend lunch with Trump, MBS in Riyadh.

Barclays expects Fed rate cut in December vs July previously.
*Goldman Sachs expects US Fed to deliver one interest rate cut in 2025 vs prior forecast of three cuts.
*GS pushes the expected start of Federal Reserve rate cuts to December from July [and back to July if CPI surprises to the downside today]

JPMorgan lifts China 2025 GDP growth forecast to 4.8% from 4.1%.

Citi: Gold prices hit record highs in late April and broke Citi Research's target price of US$3,500 per ounce
*Citi: Gold prices may continue to consolidate amidst progress in the tariff talks as tariff concerns drove surge in gold prices.
*Citi: the record global wealth allocation to gold, the expansion of the share of gold in central bank reserves, the decline in demand for jewelry and the potential rise in scrap supply could act as resistance to higher gold prices.

CPI generally as expected. Core CPI, which gov Kugler said was watching closely yesterday, remained tame despite tariffs.

Treasuries erase gains as stocks rise; yields reach day's highs. [risk on]

🚨Trump: Companies weren't happy with me a month ago
*Trump: Amazing what a rising market will do.
*Trump: Market will go a lot higher [he is not wrong]

Risk on pushes US30Y yields close to 5% [Stablecoin put imminent]

SEC lets Dell skip shareholder vote on Bitcoin treasury proposal, citing ordinary business operations.

Goldman Sachs raises FTSE 100 index target for next 12 months to 8800 from 8500.
*GS raises Stoxx 600 index target for next 12 months to 570 from 520.

Barclays raises Stoxx 600 index's 2025 year-end target to 540 from 490 [macro flipping bullish]

Rothschild Asset Management's Nabil Milali: Trump's trade war isn't over yet. Negotiations with China ongoing, final outcome will likely be 15% tariff on imports. This was seen as a worst-case scenario during the election campaign, but now appears to be a lesser evil than the even more unfavorable scenarios feared by investors just a few days ago.

🚨China's latest data shows weak credit expansion and weak loan demand, possibly due to cautious sentiment and tariff pressure. [Xi needs a trade deal and more stimulus]

Circle monthly stablecoin transfer count surpasses Tether for the first time in history.

🚨Fed's Goolsbee: Some part of April inflation represents lagged nature of data; Fed still holding its breath.
*Goolsbee: It will take time for current inflation trends to show up in the data.
*Goolsbee: Right now is a time for the Fed to wait for more information, try to get past the noise in the data.
*Goolsbee: Cannot jump to conclusions about long-term trends given all the short-term volatility.

🚨Trump: I'm a big crypto fan

🚨FT: First US-China meeting was held 3 weeks ago in the basement of the IMF headquarters

Spot gold down 2% on the day [double top confirmed]

🚨US not seeking to weaken dollar as part of trade deals -sources
*Treasury Secretary Scott Bessent remains the sole official handling FX issues and has reiterated the strong dollar stance. -sources