๐บ๐ธ-๐ฃ๐The interesting thing is that QT has finally started to work against inflation. There has been a more active reduction in deposits, as you can see, for the first time in the last 1.5 years.
The most liquid bank accounts are decreasing, which means (if we believe that the Fisher formula works), either prices should creep down, or output volume, that is, if the price grows slower than demand falls, then GDP falls. As you can see, prices are not in a hurry to decline.
Apparently, we are really moving towards a recession.
The most liquid bank accounts are decreasing, which means (if we believe that the Fisher formula works), either prices should creep down, or output volume, that is, if the price grows slower than demand falls, then GDP falls. As you can see, prices are not in a hurry to decline.
Apparently, we are really moving towards a recession.
โก๏ธ๐บ๐ธโข๏ธ๐ฃFed's Patrick Harker :
I'm the type who thinks we can skip the June rate hike. This will not be a pause - we are not ready for it yet.
(31.05.2023) source: forexlive.com
Fed's Philip Jefferson :
Monetary policy works with a time lag, so skipping the rate hike in June will allow us to see more data.
(31.05.2023) source: forexlive.com
I'm the type who thinks we can skip the June rate hike. This will not be a pause - we are not ready for it yet.
(31.05.2023) source: forexlive.com
Fed's Philip Jefferson :
Monetary policy works with a time lag, so skipping the rate hike in June will allow us to see more data.
(31.05.2023) source: forexlive.com
โก๏ธ๐บ๐ธโข๏ธ๐ฃInflation has turned out to be more resilient than the FOMC expected when they released their latest forecast in March.
The rate should be high for longer than expected, which increases the likelihood of a hard landing and recession.
In other words, "sticky" inflation requires more destruction of demand, which increases the risk of lower corporate earnings.
The rate should be high for longer than expected, which increases the likelihood of a hard landing and recession.
In other words, "sticky" inflation requires more destruction of demand, which increases the risk of lower corporate earnings.
โก๏ธ๐บ๐ธโข๏ธ๐ฅWell, since Monday the vacuum liquidity cleaner turns on ?
As early as Monday, the US Treasury is going to throw $170 billion worth of bonds on the market.
It is extremely interesting how this will affect the markets and whether it will affect at all. And then rumors and speculation through the roof.๐ค
As early as Monday, the US Treasury is going to throw $170 billion worth of bonds on the market.
It is extremely interesting how this will affect the markets and whether it will affect at all. And then rumors and speculation through the roof.
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โก๏ธโข๏ธ๐ธ๐ฆ๐ข๐ OPEC + meeting is started.
Saudi Energy Minister Prince Abdulaziz bin Salman told reporters that the OPEC+ countries plan to discuss many topics and called the upcoming talks exciting.
โYou have no idea what we are discussingโ โ Saudi Energy Minister tried to intrigue the market and journalists before the OPEC+ meeting.
Bindings of Gold to Barrel?๐ค
Why do we need green and other paper? Gold to pay for Oil and Gas ๐ฅ๐ข
They are mouse clicking Trillions are not backed by anything and the whole world should work hard? Who here rob the whole world? Do you remember this Economist cover, by the way? ๐
Saudi Energy Minister Prince Abdulaziz bin Salman told reporters that the OPEC+ countries plan to discuss many topics and called the upcoming talks exciting.
โYou have no idea what we are discussingโ โ Saudi Energy Minister tried to intrigue the market and journalists before the OPEC+ meeting.
Bindings of Gold to Barrel?
Why do we need green and other paper? Gold to pay for Oil and Gas ๐ฅ๐ข
They are mouse clicking Trillions are not backed by anything and the whole world should work hard? Who here rob the whole world? Do you remember this Economist cover, by the way? ๐
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๐ฅ๐จ๐ณโ๏ธ๐บ๐ธ Chinese Defense Minister Li Shangfu, speaking in Singapore, attacked the US strategy in the Indo-Pacific region, saying that Washington is seeking to stoke confrontation by supporting Taiwan, deploying military forces and creating alliances in the region.
โก๏ธ๐บ๐ธโข๏ธ๐จ๐ณChinese Warship Nearly Collides With US Destroyer In Taiwan Strait. ZeroHedge
ZeroHedge
Chinese Warship Nearly Collides With US Destroyer In Taiwan Strait
Beijing defends dangerous maneuver while condemning US attempt to "exercise hegemony of navigation."
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โ๏ธโข๏ธ๐ฃ - ๐บ๐ธ๐ฆ๐Large banks may face 20% increase in capital requirements - WSJ
โช๏ธ U.S. regulators are preparing to force the big banks to strengthen their financial footing. This, they say, will help increase the resilience of the system after a string of mid-sized bank failures this year.
Is this the way how US Treasury decides to resolve the problem of demand for new US debt issues?๐ค
โช๏ธ U.S. regulators are preparing to force the big banks to strengthen their financial footing. This, they say, will help increase the resilience of the system after a string of mid-sized bank failures this year.
Is this the way how US Treasury decides to resolve the problem of demand for new US debt issues?
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โก๏ธโ๏ธ๐บ๐ธ According to the statement, the SEC has filed a lawsuit against Binance and CEO Zhao for violating US securities regulations.
Bloomberg.com
SEC Sues Binance and CEO Zhao for Breaking Securities Rules
The US Securities and Exchange Commission accused Binance Holdings Ltd. and its Chief Executive Officer Changpeng Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules.
๐ฆ๐ช๐บ ECB President Christine Lagarde said inflationary pressures remain strong and borrowing costs will continue to rise to combat them, bolstering forecasts for another rate hike at next week's meeting.
Bloomberg.com
ECBโs Lagarde Says Price Pressures Strong, Rate to Rise More
European Central Bank President Christine Lagarde said inflation pressures remain powerful and borrowing costs will be raised further to tackle them โ cementing expectations for another interest-rate hike at next weekโs meeting.
โก๏ธ๐ฃโข๏ธ๐ฃIt seems the Ministry of Finance has placed today for 160+ billion dollars at rates of 5.2-5.5%. That is, Yellen gives a premium 0.25% to the Fed rate, as we've suggested. They also plan to place 9 issues before next Tuesday. And only need to pay 3.
Supposedly US Treasury will withdraw ~ 60-65 billion net this week. Really, they don't rush. If their plans of accumulation of $750 billion cash position at the end of the 2nd quarter are still intact - then, as we said, this will happen in just a couple of weeks.
it won't be long to wait....
Supposedly US Treasury will withdraw ~ 60-65 billion net this week. Really, they don't rush. If their plans of accumulation of $750 billion cash position at the end of the 2nd quarter are still intact - then, as we said, this will happen in just a couple of weeks.
it won't be long to wait....
๐ฆ๐ฆ๐บThe Reserve Bank of Australia (RBA) unexpectedly raised its key interest rate by 25 basis points to 4.1% per annum. This is the highest level since the beginning of 2012, notes MarketWatch .
Since May last year, the Australian Central Bank has increased the rate twelve times, in total it was raised by 400 bp.
Since May last year, the Australian Central Bank has increased the rate twelve times, in total it was raised by 400 bp.
๐ฉ๐ชGerman factory orders fell unexpectedly in April (by 0.4%), further hurting the outlook for Europe's largest economy after it suffered its first post-pandemic recession over the winter .
โก๏ธ๐บ๐ธโข๏ธ๐ฃExcessive savings of households are exhausting - approx. 1.2 trillion. dollars left.
It is precisely because of the spending of these excess savings that consumer spending on services such as airline tickets, hotels, restaurants, etc., remains high.
Someone was sitting at home during pandemic, working, saving money (or rather, he could not spend it), and now he is breaking away, and someone was unemployed, wasting savings and stimulus checks.
Expenditure of excess savings gives somewhere between 700-800 billion dollars of final demand per year. Last check shows that the US GDP was $25 trillion. dollars.
That is, these excess spending, it seems, forms about 3% of GDP. If excess savings run out by the end of the year and 3% of final demand goes away, then this in itself, without any financial crises, will lead to a recession.
It is precisely because of the spending of these excess savings that consumer spending on services such as airline tickets, hotels, restaurants, etc., remains high.
Someone was sitting at home during pandemic, working, saving money (or rather, he could not spend it), and now he is breaking away, and someone was unemployed, wasting savings and stimulus checks.
Expenditure of excess savings gives somewhere between 700-800 billion dollars of final demand per year. Last check shows that the US GDP was $25 trillion. dollars.
That is, these excess spending, it seems, forms about 3% of GDP. If excess savings run out by the end of the year and 3% of final demand goes away, then this in itself, without any financial crises, will lead to a recession.
Historical Patterns: The VIX Is Ready for a Sharp Reversal
The VIX volatility index has fallen to its lowest level in more than three years.
The VIX fell about 19% last week, the biggest drop this year.
โ Thus, after the VIX fell more than 34% below its 200-DMA . Such a significant divergence usually means a bottom.
The story goes: after dropping below or above the 200-day moving average by more than 30%, then over the course of 20 trading days, the VIX averaged a 17% jump. More importantly, the index was higher after 20 days in 42 out of 44 cases, if the deviation from the 200-day was at least 30 percentage points.
โ๏ธIn addition, seasonality also favors the growth of the VIX: the volatility index has increased 80% of the time in June over the past 10 years.
The VIX volatility index has fallen to its lowest level in more than three years.
The VIX fell about 19% last week, the biggest drop this year.
โ Thus, after the VIX fell more than 34% below its 200-DMA . Such a significant divergence usually means a bottom.
The story goes: after dropping below or above the 200-day moving average by more than 30%, then over the course of 20 trading days, the VIX averaged a 17% jump. More importantly, the index was higher after 20 days in 42 out of 44 cases, if the deviation from the 200-day was at least 30 percentage points.
โ๏ธIn addition, seasonality also favors the growth of the VIX: the volatility index has increased 80% of the time in June over the past 10 years.
โก๏ธ๐บ๐ธโข๏ธ๐ฃMarket nightmares on the Internet
โ๏ธOne of the traders notes that unlike the S&P 500 index, led by the largest technology stocks, its weighted counterpart Equal Weight Index S&P - the equilibrium index, draws the so-called death cross - the intersection of averages, which in the past almost always provoked a powerful market decline.
โ๏ธOne of the traders notes that unlike the S&P 500 index, led by the largest technology stocks, its weighted counterpart Equal Weight Index S&P - the equilibrium index, draws the so-called death cross - the intersection of averages, which in the past almost always provoked a powerful market decline.
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โก๏ธ๐บ๐ธโข๏ธ๐ฃ After yesterday's BTC collapse here comes the meme ๐คฃ
โก๏ธ๐บ๐ธโข๏ธ๐ฃToday the SEC attacked another stock exchange - COINBASE . Now they are suing her.
โ๏ธThe day before, Binance became a victim.
The US authorities are doing everything to somehow protect the dollar and maintain control over the global financial system.
โ๏ธThe day before, Binance became a victim.
The US authorities are doing everything to somehow protect the dollar and maintain control over the global financial system.
๐จ๐ณ China's exports fell by 7.5% in May, imports fell by 4.5%
โ๏ธThe volume of China's exports in May decreased by 7.5% in annual terms and amounted to $283.5 billion, the General Administration of Customs said in a statement.
โ๏ธThis is the first decrease in the indicator in the last three months. Analysts, on average, had forecast a decline of just 0.4%, according to Trading Economics data.
โ๏ธImports decreased by 4.5% to $217.69 billion. At the same time, the indicator fell by
results for the third month in a row.
โ Experts expected a sharper drop in imports - by 8%.
โ๏ธThe volume of China's exports in May decreased by 7.5% in annual terms and amounted to $283.5 billion, the General Administration of Customs said in a statement.
โ๏ธThis is the first decrease in the indicator in the last three months. Analysts, on average, had forecast a decline of just 0.4%, according to Trading Economics data.
โ๏ธImports decreased by 4.5% to $217.69 billion. At the same time, the indicator fell by
results for the third month in a row.
โ Experts expected a sharper drop in imports - by 8%.
โก๏ธโข๏ธ๐บ๐ธ-๐Fed Easing Cycle To Start Multi-Year Dollar Bearish Trend END THIS YEAR - ING
Weaker dollar could lead to lower U.S. rate exports around the world
โพ๏ธOur basic view in the currency markets is that the dollar will enter a cyclical bear trend in the coming months.
โพ๏ธThe prerequisite for this is tightening of credit conditions in the US, which will complement the tightening of monetary policy and lead to the long-awaited disinflation in the US.
โพ๏ธIf the Fed is able to sharply cut rates later this year, we are convinced that the dollar will trade lower. In this scenario, in our opinion, the EUR/USD pair should be somewhere around 1.15+ by the end of the year, and the USD/JPY pair should be below 130.
โพ๏ธThe weakening of the US dollar should be a positive factor for global growth. Many countries, especially those with emerging markets, are forced to support local currencies with higher rates.
A reversal in the dollar's broad trend should give them some breathing room and possibly attract more portfolio positives to emerging markets than have been seen since the end of 2020.
Weaker dollar could lead to lower U.S. rate exports around the world
โพ๏ธOur basic view in the currency markets is that the dollar will enter a cyclical bear trend in the coming months.
โพ๏ธThe prerequisite for this is tightening of credit conditions in the US, which will complement the tightening of monetary policy and lead to the long-awaited disinflation in the US.
โพ๏ธIf the Fed is able to sharply cut rates later this year, we are convinced that the dollar will trade lower. In this scenario, in our opinion, the EUR/USD pair should be somewhere around 1.15+ by the end of the year, and the USD/JPY pair should be below 130.
โพ๏ธThe weakening of the US dollar should be a positive factor for global growth. Many countries, especially those with emerging markets, are forced to support local currencies with higher rates.
A reversal in the dollar's broad trend should give them some breathing room and possibly attract more portfolio positives to emerging markets than have been seen since the end of 2020.
โ๏ธโข๏ธ๐ฃ - ๐บ๐ธ Situation is changing very fast. And there are more consequences than we see on a surface
Janet Yellen: I support US regulatory oversight of cryptocurrencies to protect consumers and investors. Additional crypto regulation would be appropriate, we will work with Congress to push for additional legislation.
โช๏ธ Republican Representative, Hill: The case of the Binance crypto exchange demonstrates the need for clear rules for crypto regulation. We are working on digital asset legislation to bring clarity.
Janet Yellen: I support US regulatory oversight of cryptocurrencies to protect consumers and investors. Additional crypto regulation would be appropriate, we will work with Congress to push for additional legislation.
โช๏ธ Republican Representative, Hill: The case of the Binance crypto exchange demonstrates the need for clear rules for crypto regulation. We are working on digital asset legislation to bring clarity.