macrothoughts

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[macrothoughts @macrothoughtsUK]

@ChrisB_IG Heavy profit taking in USDJPY early last night, markets are getting nervous

[macrothoughts @macrothoughtsUK]

@ChrisB_IG It’s one we’ve watched, especially since it was evident to us in August 2020 that inflation was going to be a macro problem. CAT seems to have trended in 12-18m cycles.

[macrothoughts @macrothoughtsUK]

@carlquintanilla Are you surprised after the 20% rise in insurance in December - which doesn’t seem to changed since and won’t drop out of CPI/Shelter data until November

[macrothoughts @macrothoughtsUK]

@carlquintanilla @CNBC In our pre-CPI commentary (below consensus forecast) we said there is a strong possibility for a September rate cut with Gasoline falling in June (enough distance from the election). CPI/PCE below 3% should mean FF below 4% while four times 1y/1y (SOFR) have been held at 4.5%

[macrothoughts @macrothoughtsUK]

@elerianm @FT Compare ‘the latest 3 mths with the 3 mths that preceded them, & then annualise this growth rate, nominal regular average weekly earnings grew by 4.8%.

This shows that if we look at growth over the short term, it is not as strong as when comparing over a full 12 mth period’

[macrothoughts @macrothoughtsUK]

In meetings over recent months we have cautioned not to underestimate the fallout from #EU #elections & the influence the result will have on European policies. Failure to recognise the weakness of household budgets is now being reflected voting, with a US election in November

[macrothoughts @macrothoughtsUK]

@elerianm @TheEconomist This is why we have always highlighted sector change in Weekly Earnings in our unemployment reports; U6 (summary of conditions) has been deteriorating for almost a year. We recent reported on true unemployment via 8k & UIC, while true Retail Sales have been negative for a year.

[macrothoughts @macrothoughtsUK]

@carlquintanilla Credit Card delinquency rates have risen at current pace twice before since the 1990s & both times after tightening of financial conditions. This was followed by recessions & significant rate cuts. The savings rate has dropped to 3.4% and Revolving credit collapsed in March.

[macrothoughts @macrothoughtsUK]

@elerianm US Q4 annualised GDP is very likely to be negative…gasoline prices will not be contributing to higher CPI for May & June

[macrothoughts @macrothoughtsUK]

@elerianm @TheEconomist Jobless UIC, 8K & WARN show how over optimistic data is - still higher than between 2011 to 2019. 80% of small businesses have No employees; following COVID, there have been over 5mio start-ups, rather than be unemployed. See our April 5 report on the US consumer.

[macrothoughts @macrothoughtsUK]

@elerianm CPI in line with our below consensus forecast (see Macro Thoughts, ‘The Week Ahead’ and May 10 report). US 1yr-1yr swaps continue to perform and we expect another 100bp. With gasoline prices expected to react to the fall in WTI, CPI should be below 3% by year end.

[macrothoughts @macrothoughtsUK]

Two conclusions might be made…firstly the economic crisis is far deeper than we are led to understand, and secondly, Xi has been forced into being more power sharing….perhaps both. @markets @CNBC @ftfinancenews

[macrothoughts @macrothoughtsUK]

It is being reported that the #China Government is putting pressure on local Governments to use bank loans to buy millions of unsold properties. Xi has set his standards for over a decade to get local governments in line, reduce their borrowings and their risks….

[macrothoughts @macrothoughtsUK]

@elerianm @WSJ Credit card delinquencies tend to rise before a recession hits…the current rise is the third fastest since the mid-1990s, both previous occasions led to sharp reversals of higher rates, the second being just prior to the GFC…US1yr-1yr swaps have traded technically perfectly.

[macrothoughts @macrothoughtsUK]

#Riksbank, the Swedish central bank, have followed their ‘No brainier’ rate decision by cutting 25bp. @CNBC

[macrothoughts @macrothoughtsUK]

@elerianm @WSJ ‘The disinflationary impact of higher CPI’….They are a
making the same mistakes, continuing with the same assumptions, looking at the out of date data, ignoring the same signs, while the economic pendulum is already swinging back the other way

[macrothoughts @macrothoughtsUK]

@elerianm Brave to bet against the BOJ given their history. Some painful memories in markets from the past

[macrothoughts @macrothoughtsUK]

Let’s get this right…CBs act on the trend in data, and not because forecasters had a different expectation. @CNBC @markets @FT

[macrothoughts @macrothoughtsUK]

@ChrisB_IG Interesting earnings….Walmart, McDonald’s, Burger King…etc…all relying on higher prices, and are having to restructure because of falling sales…