🇺🇸 US inflation fell to 4%
💸 United States consumer price inflation eased to 4.0 percent in May 2023, the lowest level since March 2021.
This data is slightly below market expectations of 4.1 percent, due to lower energy prices.
💰Furthermore, core inflation, which excludes volatile commodities such as food and energy, fell to 5.3 percent, its lowest level since November 2021, raising expectations that the Fed may pause at its next meeting.
💸 United States consumer price inflation eased to 4.0 percent in May 2023, the lowest level since March 2021.
This data is slightly below market expectations of 4.1 percent, due to lower energy prices.
💰Furthermore, core inflation, which excludes volatile commodities such as food and energy, fell to 5.3 percent, its lowest level since November 2021, raising expectations that the Fed may pause at its next meeting.
⚡️🇺🇸☢️🗣👆Meanwhile, Citigroup warns that bond traders are misinterpreting inflation
✔️Like five months ago, the market comes from two consecutive CPI data below the forecast. However, inflation expectations over the next few years are now higher than they were at the beginning of 2023 despite tighter financial conditions, lower annual inflation and higher unemployment and benefits claims.
The bank's expert notes that core inflation, which excludes volatile food and energy prices, should fall significantly below 0.4% m/m in May for the first time since November , contrary to economists' forecasts that the level will remain stable
✔️Like five months ago, the market comes from two consecutive CPI data below the forecast. However, inflation expectations over the next few years are now higher than they were at the beginning of 2023 despite tighter financial conditions, lower annual inflation and higher unemployment and benefits claims.
The bank's expert notes that core inflation, which excludes volatile food and energy prices, should fall significantly below 0.4% m/m in May for the first time since November , contrary to economists' forecasts that the level will remain stable
☝️☢️🗣 - 🇺🇸📈 As we've said in the weekly report - there is a boom in the construction of factories in the USA. Biden's plan to return production to the country is working.
Now in the States every day they build 6 full-fledged factories.
The truth is, for some reason, the US manufacturing PMI has been in the as* for a long time. That is, with one hand we treat, with the other we cripple. Apparently, if there was no program for dragging enterprises from Taiwan and Europe, then the release of prom. production in the US would literally collapse.
Well, and most importantly, there is no workforce for all these new enterprises. U.S. wages are still very high (and hence high inflation) because of which Powell suffers every day, who cannot lower the rate.
As a result, the cost of servicing the public debt pyramid is growing every month and has already overtaken the defense budget.
Now in the States every day they build 6 full-fledged factories.
The truth is, for some reason, the US manufacturing PMI has been in the as* for a long time. That is, with one hand we treat, with the other we cripple. Apparently, if there was no program for dragging enterprises from Taiwan and Europe, then the release of prom. production in the US would literally collapse.
Well, and most importantly, there is no workforce for all these new enterprises. U.S. wages are still very high (and hence high inflation) because of which Powell suffers every day, who cannot lower the rate.
As a result, the cost of servicing the public debt pyramid is growing every month and has already overtaken the defense budget.
🇬🇧 UK labor market data sent two-year government bond prices back to 2008 levels.
▪️UK government bonds fell today to levels last seen during the global financial crisis
▪️Traders are betting that the Bank of England may have to hike rates to 6% after data showed that wages rose faster than expected in April.
▪️UK government bonds fell today to levels last seen during the global financial crisis
▪️Traders are betting that the Bank of England may have to hike rates to 6% after data showed that wages rose faster than expected in April.
🫴💶😱 EU banks must return to the ECB about 500 billion euros in 1 day
🦠The echo of the European crisis of the 2010s, multiplied by covid, sounded. Even under Draghi, the TLTRO long-term financing mechanism was invented, which was then actively used during the pandemic. And now European banks will have to return 476.8 billion euros to the ECB on June 28.
🧨This, of course, is not the entire amount, but the next largest payment. Experts are already saying that many will not survive such a load, and name the standard suspects from 2010: Italian and Greek banks. It is even strange that Spain and Portugal are not mentioned.
🌀The most obvious way out for those who lack liquidity is to attract debt securities in the market. But participants in this market are also not foolish, and may demand a huge risk premium. A Kafkaesque solution is brewing: the ECB will have to launch an anti-crisis mechanism to finance those who do not have enough funds to pay off payments under the previous ECB anti-crisis mechanism.
🦠The echo of the European crisis of the 2010s, multiplied by covid, sounded. Even under Draghi, the TLTRO long-term financing mechanism was invented, which was then actively used during the pandemic. And now European banks will have to return 476.8 billion euros to the ECB on June 28.
🧨This, of course, is not the entire amount, but the next largest payment. Experts are already saying that many will not survive such a load, and name the standard suspects from 2010: Italian and Greek banks. It is even strange that Spain and Portugal are not mentioned.
🌀The most obvious way out for those who lack liquidity is to attract debt securities in the market. But participants in this market are also not foolish, and may demand a huge risk premium. A Kafkaesque solution is brewing: the ECB will have to launch an anti-crisis mechanism to finance those who do not have enough funds to pay off payments under the previous ECB anti-crisis mechanism.
🇺🇸🏦Jerome Powell said that after the pause, at least two more rate hikes are expected .
▪️ Officials raise forecasts for rates, growth, core inflation.
▪️The Fed is signaling that the break in rate hikes is likely to be short-lived
▪️ Officials raise forecasts for rates, growth, core inflation.
▪️The Fed is signaling that the break in rate hikes is likely to be short-lived
☝️☢️🗣 - 🇺🇸POWELL: Fed WILL NOT FUND US DEBT.😎🔥
▪️ The Fed's forecasts for the last 2 years have been "wrong".🔥
▪️ WE HAVE TO REDUCE INFLATION.
▪️ I do not expect a reduction in the reverse repo rate.
▪️ A COOLING job market could help a soft landing in the US economy.
▪️ The Fed WILL NOT fund the US government debt.🔥
▪️ Price stability is the backbone of the US economy.
▪️ RATE REDUCTION this year is inappropriate.🔥
▪️ It may take 2 YEARS for the Fed to cut the rate.
▪️ There is talk about the admissibility of a rate cut in a couple of years.
▪️ NO Fed member sees the possibility of a rate cut in 2023.
▪️ WE SEE NO progress in lowering core inflation.🔥
▪️ Do not wait for the fall of salary/c/. We expect slower growth.
▪️ The Fed keeps a close eye on the banking system.
▪️ The Fed's forecasts for the last 2 years have been "wrong".🔥
▪️ WE HAVE TO REDUCE INFLATION.
▪️ I do not expect a reduction in the reverse repo rate.
▪️ A COOLING job market could help a soft landing in the US economy.
▪️ The Fed WILL NOT fund the US government debt.🔥
▪️ Price stability is the backbone of the US economy.
▪️ RATE REDUCTION this year is inappropriate.🔥
▪️ It may take 2 YEARS for the Fed to cut the rate.
▪️ There is talk about the admissibility of a rate cut in a couple of years.
▪️ NO Fed member sees the possibility of a rate cut in 2023.
▪️ WE SEE NO progress in lowering core inflation.🔥
▪️ Do not wait for the fall of salary/c/. We expect slower growth.
▪️ The Fed keeps a close eye on the banking system.
☝️☢️🗣 - 🇺🇸And finally, to close topic of yesterday's Fed meeting - Fed cover letter
▪️Fed rate ceiling expected at 5.5%-5.75% by the end of 2023.🔥
▪️ Moderate economic growth.
▪️Keeping rates at the same level allows you to assess the impact of monetary policy (lag).
▪️An additional rate increase is possible!🔥
▪️Expected rate cuts in 2024.
▪️The Fed's balance sheet will continue to shrink as part of the previously announced plan.🔥
▪️Fed rate ceiling expected at 5.5%-5.75% by the end of 2023.🔥
▪️ Moderate economic growth.
▪️Keeping rates at the same level allows you to assess the impact of monetary policy (lag).
▪️An additional rate increase is possible!🔥
▪️Expected rate cuts in 2024.
▪️The Fed's balance sheet will continue to shrink as part of the previously announced plan.🔥
Please open Telegram to view this post
VIEW IN TELEGRAM
⚡️🇺🇸🇪🇺🗣Markets don't trust central banks.
▪️Yesterday, after the Fed, the dollar began to strengthen, but it did not last long and today, after the ECB, everything went in the opposite direction, and the euro updated its local maximum, and the pound crossed the mark of 1.27 - that is, it is trading at this year's highs.
And it will continue to grow.
▪️ Bond yields also plummeted.
▪️Obviously, the bravado of the Fed and the ECB that they will continue to raise rates is of no interest to anyone, the market is playing a different game - an early recession and capitulation of Powell and Lagarde.
▪️Yesterday, after the Fed, the dollar began to strengthen, but it did not last long and today, after the ECB, everything went in the opposite direction, and the euro updated its local maximum, and the pound crossed the mark of 1.27 - that is, it is trading at this year's highs.
And it will continue to grow.
▪️ Bond yields also plummeted.
▪️Obviously, the bravado of the Fed and the ECB that they will continue to raise rates is of no interest to anyone, the market is playing a different game - an early recession and capitulation of Powell and Lagarde.
🇪🇺❌📡 European Commission bans Huawei and ZTE 5G equipment
⛔️Recommendation turns into a legislative ban for all EU countries . By the way, the recommendation previously applied only to Huawei, but now Brussels has added ZTE to the stop list. The EC argues that the equipment of the two Chinese companies poses a far greater threat to the cybersecurity of Europe than the hardware of any other manufacturers.
⛔️Recommendation turns into a legislative ban for all EU countries . By the way, the recommendation previously applied only to Huawei, but now Brussels has added ZTE to the stop list. The EC argues that the equipment of the two Chinese companies poses a far greater threat to the cybersecurity of Europe than the hardware of any other manufacturers.
🇺🇸🫳🏝 Kissinger: there will be more war over Taiwan than not
Blinken is heading to Beijing the other day, and the White House is setting an extremely low bar ahead of time. The communiqué about the trip is extremely dry, they urge not to wait for a diplomatic breakthrough. In general, this is unlikely to be analogous to the fateful journey of Kissinger himself.
🚨The Pentagon claims that the key goal of the modernization of the People's Liberation Army of China is the forceful solution of the Taiwan issue. An early window of opportunity will supposedly open as early as 2027. In such a compressed time frame, it is difficult to imagine a long-term normalization as under Nixon.
Blinken is heading to Beijing the other day, and the White House is setting an extremely low bar ahead of time. The communiqué about the trip is extremely dry, they urge not to wait for a diplomatic breakthrough. In general, this is unlikely to be analogous to the fateful journey of Kissinger himself.
🚨The Pentagon claims that the key goal of the modernization of the People's Liberation Army of China is the forceful solution of the Taiwan issue. An early window of opportunity will supposedly open as early as 2027. In such a compressed time frame, it is difficult to imagine a long-term normalization as under Nixon.
☝️☢️🗣 - 🇺🇸BlackRock, the world's largest asset manager, has officially applied for a Bitcoin ETF listing 💥
▪️ The SEC has so far rejected every bitcoin-ETF application it has received.
▪️ BlackRock manages $9.5 trillion in assets.
Those who have read our recent BTC Fundamental report - knows what we're talking about and why it might be so important.🤓 🔥
▪️ The SEC has so far rejected every bitcoin-ETF application it has received.
▪️ BlackRock manages $9.5 trillion in assets.
Those who have read our recent BTC Fundamental report - knows what we're talking about and why it might be so important.
Please open Telegram to view this post
VIEW IN TELEGRAM
🇪🇺🏦 According to the IMF, the strong rise in consumer prices in the eurozone requires an increase in ECB interest rates and a sustained "tightening push".
Inflation in the region has eased from a peak of 10.6% in October, but is still more than three times the ECB's target of 2%. Tight financial conditions - fueled by an unprecedented 400bp rate hike cycle. from July - and the easing of supply restrictions mean that growth will continue to slow, and "convergence to the target is projected around mid-2025."
Economists believe that the chances of an ECB rate hike in September are growing
Inflation in the region has eased from a peak of 10.6% in October, but is still more than three times the ECB's target of 2%. Tight financial conditions - fueled by an unprecedented 400bp rate hike cycle. from July - and the easing of supply restrictions mean that growth will continue to slow, and "convergence to the target is projected around mid-2025."
Economists believe that the chances of an ECB rate hike in September are growing
This media is not supported in your browser
VIEW IN TELEGRAM
☝️☢️🗣 - 🇺🇸The IMF urges the US to find a long-term solution to the country's debt ceiling - statement
🇺🇸🏦The US economy is still holding up, but showing signs of slowing down .
▪️Retail sales unexpectedly rose while factory output declined.
▪️Other data showed jobless claims remain at the highest level since 2021.
▪️Retail sales unexpectedly rose while factory output declined.
▪️Other data showed jobless claims remain at the highest level since 2021.
⚡️🇺🇸☢️🗣Traditionally, data on the balance sheet of the Fed and figures from the Ministry of Finance came out
▪️Let's start with the fact that the US Treasury took only $57.4 billion into its accounts in the week to June 14, increasing the funds on the accounts to $134.9 billion - and this is against the target of 425 billion at the end of the month.
▪️That tsunami of borrowings and the subsequent outflow of liquidity, which was written about almost every day, is not happening yet.
▪️The US Treasury Plans ~$115B Net Borrowing Next Week,
▪️Let's start with the fact that the US Treasury took only $57.4 billion into its accounts in the week to June 14, increasing the funds on the accounts to $134.9 billion - and this is against the target of 425 billion at the end of the month.
▪️That tsunami of borrowings and the subsequent outflow of liquidity, which was written about almost every day, is not happening yet.
▪️The US Treasury Plans ~$115B Net Borrowing Next Week,
⚡️🇺🇸☢️🗣Bank of America:
The closer the Fed gets to the final level of the rate, the more the opinions of officials diverge. Based on the SEP report:
• 2 FOMC members see current rate level (5.25%) as appropriate to end the hike cycle
• 4 officials consider another 0.25% increase worthwhile
• the remaining 12 see at least two more increases of 0.25%
There is a possibility that Powell belongs to the first group, because. his press conference seemed much more dovish than the FOMC statement and SEP.
source: BofA Research, 06/14/2023
The closer the Fed gets to the final level of the rate, the more the opinions of officials diverge. Based on the SEP report:
• 2 FOMC members see current rate level (5.25%) as appropriate to end the hike cycle
• 4 officials consider another 0.25% increase worthwhile
• the remaining 12 see at least two more increases of 0.25%
There is a possibility that Powell belongs to the first group, because. his press conference seemed much more dovish than the FOMC statement and SEP.
source: BofA Research, 06/14/2023
Media is too big
VIEW IN TELEGRAM
⚡️🇺🇸☢️🗣Incompetence or bargain hunting?
The head of the Fed admits: "we do not understand how inflation works", "the Phillips curve does not work", "in addition to demand, as it turned out, there is also supply."
Heading "confessions" directly. And it is not clear whether this is incompetence, because they lived in the same paradigm of the world economy and the equations somehow worked, or whether they understand everything and are trying to carry out controlled destruction.
So we will live to the point that they will think that raising rates in itself increases inflation due to rising costs and the rate should be reduced.
Well, as always, it doesn’t matter whether it’s stupidity or bargain hunting, but “who needs it” earns money.
The head of the Fed admits: "we do not understand how inflation works", "the Phillips curve does not work", "in addition to demand, as it turned out, there is also supply."
Heading "confessions" directly. And it is not clear whether this is incompetence, because they lived in the same paradigm of the world economy and the equations somehow worked, or whether they understand everything and are trying to carry out controlled destruction.
So we will live to the point that they will think that raising rates in itself increases inflation due to rising costs and the rate should be reduced.
Well, as always, it doesn’t matter whether it’s stupidity or bargain hunting, but “who needs it” earns money.