While core inflation continues its slow descent, headline has been sticky, but should be set to fall now as oil, gasoline, lumber, and used car prices fall.
People love to dump on magazine covers and point them out as contrarian indicators but some publications are reverse indicators, and some are not.
The market has had 24 hours to get short USD and yet AUD and EUR couldn’t break key levels. Initial Claims are probably set to mean revert today and the market may well overreact to the release (like it did last week).
The reaction to weakish CPI and weak Retail Sales has been muted. The market is waiting for real money and CTAs to come in and sell dollars. I think they will, but their absence is notable so far.
As we await the most important CPI release since medieval times, I offer some thoughts on the USD, rate differentials, the US labor market, and age ratios.
Nobody knows whether the Fed is going to hike, nobody knows where FX is going, frankly nobody has any idea what’s going on.
Vibes from a macro dinner, results of the macro survey, an explanation of the stonking Atlanta Fed GDPNow revisions, and no June cut from the BoC.
How is the Atlanta Fed GDPNow rising in the face of low and falling ISMs, Wholesale Trade, and NFP? I’m confused.
Commodity currencies have divorced from commodity prices as the transmission mechanisms that used to drive correlation have abated. This has implications for FX trading and Canadian inflation.
Like sundried tomatoes, the term “excess savings” was trendy, then forgotten. Now, the narrative around the depletion of excess savings may be set to re-emerge. Plus: China’s gold buying flood slows to a trickle. And: trading USDJPY is hard.
The turn in the US data should push the dollar lower as the market repriced the combination of weaker data and dovish Fed reaction function.
There has been a notable change in the tone of the data recently as we have moved from stonking disinflationary boom to possibly-troubling softness on the demand side. And Cathie keeps on being Cathie.
Catch up with Brent Donnelly and Macro Alf every week on The Macro Trading Floor. Listen as they discuss themes that are moving markets, highlight important trade ideas, and get to the bottom of what’s going on in macro.
John Mauldin, Chairman
Mauldin Economics
One year of good ideas, dumb mistakes, and timeless trading lessons over a wide range of topics like tactics, strategy, mindset, risk management, and of course the psychology of successful trading. Watch real trade ideas come to life in real time.
We teach you how to think, reason, and behave like someone who makes money.
