Andromeda Report

Independent research on Global Macro, Markets and Central Bank Policy — written by a former hedge fund rates trader and ECB analyst.

[Andromeda Report @Andromeda_Macro]

US Core PCE (Apr):
MoM 0.2% vs 0.3% exp (0.3% prev)
YoY 3.3% vs 3.3% exp (3.2% prev)

US GDP (Q1):
QoQ 1.6% vs 2% exp (0.5% prev)

In line PCE, while miss in GDP growth. Little market reaction so far. The latest data does not change the picture we outline in our Morning Call.
Equities to keep rallying on strong earnings momentum, US 10y yields to remain around the 4.5% level, while gold to keep grinding lower to $4,000.

[Andromeda Report @Andromeda_Macro]

Morning Call:
• S&P futures +0.6%
• Oil -5.3%
• Gold -0.9%
• 10yr -5bp
• BTC -0.6%
Equities keep rallying — S&P & Nikkei hit fresh highs as markets price in a US-Iran peace deal. Positive developments, but we’re staying cautious on pre-emptive optimism.
Still expect persistently high US rates amid elevated oil and heavy corporate/Treasury supply.

[Andromeda Report @Andromeda_Macro]

US PMI Data (May):
Manufacturing: 55.3 vs 53.8 exp (54.5 prev)
Services: 50.9 vs 51.1 exp (51.0 prev)

Mixed PMIs, alongside in line initial jobless claims this morning, leave the Fed scratching their heads on whether the US economy and labour markets are cooling down.

[Andromeda Report @Andromeda_Macro]

Bleak start to the week. No weekend headlines = markets bracing for a prolonged Strait closure.
* S&P -0.6%
* Oil +1.8%
* Gold +0.2%
* 10y +2bps
* BTC -0.6%
More pain ahead: oil feeding into inflation, US export capacity in question, 10y grinding to 5%. The S&P's unstoppable rally just met an unstoppable problem.

[Andromeda Report @Andromeda_Macro]

BTC -4.1%.
The countertrend rally to 82k had a good run, but we expect weakness to resume into year-end.
Higher rates + weak equities + bear cycle seasonality — all pointing the same way.

[Andromeda Report @Andromeda_Macro]

This week in markets:
• Rates repriced sharply across DM
• Oil +6.7% as Hormuz stays shut
• Gilts cracked on UK political crisis
• Gold -3.7%, selling off on risk-off days (bearish)
• S&P stalled, 40% above 200dma
Our view 👇

[Andromeda Report @Andromeda_Macro]

Gold -3.7% on the week.
The tell: it's selling off on risk-off days and making lower lows since late January.
That's not how gold behaves in a healthy bull. Bearish signal.

[Andromeda Report @Andromeda_Macro]

Andromeda Weekly Wrap:
Fed holds, but the stance is drifting toward neutral. Three dissenters voted to drop the easing bias outright. Warsh inherits the debate, confirmation expected mid-May.
Core PCE 3.2%, euro CPI 3%. Growth revised down: US 2%, euro area 0.1%.
Weekly moves:
📈 S&P +0.9% to record 7,260 — too far, too fast. We target 6,300.
🛢️ Oil +6.9% to $102.5 — Strait optimism faded. We stay long, $100+.
🥇 Gold -1.4% — underperforming despite Iran risk. Flat, $4,000 to re-enter.
📊 US 10y +4.6bps — range-bound, but a hawkish Fed plus war escalation breaks 4.5% toward 5%.
₿ Bitcoin -0.3%, treading water. Downside break targets 63k, then 55k.

[Andromeda Report @Andromeda_Macro]

https://t.co/VuIsiCXTz3

[Andromeda Report @Andromeda_Macro]

Chicago, 1849. A grain merchant buys corn all autumn, holds it through winter, and finds Buffalo already full of Ohio corn. He closes the year at a loss. The next September, he agrees the price before buying a single bushel. That's where futures contracts begin.

[Andromeda Report @Andromeda_Macro]

Morning Call:
* S&P futures +0.1% (+ve)
* Oil -1.7% (+ve)
* Gold -0.6% (+ve)
* US 10yr unch
* Bitcoin -0.3% (-ve)
Markets bounced yesterday and are opening small positive on Trump’s hint that that the US-Iran talks could resume in the coming days. The S&P 500 is now almost back to all time highs, fuelled by some optimism over the war and investors buying the dips. Investors have also been looking at the S&P 500’s forward PE ratio, whch reached a local bottom, to resume buying. We remain cautious of a further rally in equities.

[Andromeda Report @Andromeda_Macro]

https://t.co/LD2hAcAvJz

[Andromeda Report @Andromeda_Macro]

https://t.co/wq485mM13f

[Andromeda Report @Andromeda_Macro]

Flash Crash: The Day Apple Soared To $100,000

On May 6th, 2010, Apple shares soared to $100,000 while Accenture went from $40 to 1 cent. For five minutes, markets stopped making sense entirely. A bedroom trader in Hounslow had something to do with it.

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