⚠️ Markets are pricing in the most aggressive front-loaded Fed hiking cycle in modern history. If the Fed delivers 4 consecutive 50bps hikes starting in May... which is starting to get priced in... then this will be more aggressive than what we saw in '94. History being made $USD
Personal update: I've joined Anthropic. I think the next few years at the frontier of LLMs will be especially formative. I am very excited to join the team here and get back to R&D. I remain deeply passionate about education and plan to resume my work on it in time.
Yentervention again… USD/JPY spec longs hit on the counter attack by Japan’s MoF. Our estimates has USD/JPY positioning clean once again down in the low 150s $JPY
⚠️ Starting to see the 'stag' and the 'flation'. Higher ISM manf prices paid, lower employment. Spread between prices paid & employment has only been higher on 6 occassions since the 1970s: '74, '79/80, '94, '08, '21. 3 out of 5 were recessions $USD
⚠️ Clearest sign of UK labour slack is private sector wage growth - which fell to 2.8% YoY (lowest since Covid). Lagging the sharp fall in V/U ratio. Headline drop in UER looks noisy but in keeping with 'less bad' high-freq jobs data. This isn't data that's BoE hike worthy $GBP
⚠️ UK single-month unemployment fell to 4.9% in Jan driven by seasonal uptick in hiring. Doesn’t mask 3M average running at 5.2%, close to BoE’s peak forecast. Softer hiring in Feb, higher layoffs, falling inactivity means net supply rising. This is pulling wage growth lower $GBP
⚠️ Higher for longer dots. But slightly more dovish than market expectations - especially as option tails had greater odds of a hike vs. cut over next year. But no FOMC officials a hike plausible this year. At the same time one official nudged up their R*. Sell rates vol $USD
Today it's logistics companies that are getting crushed by the AI scare trade.
But here's what's weird. The company that announced the new AI freight product is not some advanced AI lab. It's some Florida-based penny stock that sells karaoke machines.