CPI supposedly fell 0.4% in June, the biggest drop since April 2020 in the depths of the COVID disaster.  If nothing else, it’s a great reminder of how suspect every bit of data coming out of the federal government has been since Trump fired Dr. Erika McEntarfer for reporting employment data that wasn’t favorable to the White House.

The 9.9% monthly drop in gas prices might have produced a temporary drop in inflation. But, the more important data point is the 29% YoY gain, which supposedly produced a 3.5% YoY print in CPI.

Futures had been flat going into the CPI print, but shot up 30 points after the release – perhaps as carbon-based traders took a gander at WTI prices.

The  open looks likely to be a more modest bump.

RB has risen 15.5% in the past two week – one of the reasons the 10Y had already broken out.

It remains broken out, though it’s been on a wild ride this morning.

Warsh testifies today, which has had traders a little nervous given his hawkish sound bites. But, this morning’s CPI print will likely give him some reassurance that something as drastic as a rate hike might be completely unnecessary.

Stay tuned.

The ceasefire between the US and Iran is no longer in place, sending oil prices and interest rates higher in advance of tomorrow’s CPI print.

 

 

 

Futures are flat following a day that saw the algo-inspired meltup surge yet again.

Aside from VIX suppression, the algos are encouraged by the inability of CL to push through its SMA200.

RB also remains constrained, with its own SMA200 reaching an important channel midline.

So, though TNX remains broken out, it’s behaved itself for the past couple of sessions.

Stocks are slightly higher despite a further escalation of hostilities in Iran. The US said it hit 90 targets overnight while Tehran says it targeted American bases in Qatar, Kuwait and Bahrain.

In the US, it’s all about keeping a lid on the 10Y.

Trump says the US-Iran cease fire is over.

As we’ve said from the start, Iran will do everything in its power to thwart Trump’s midterm ambitions – which means the conflict will continue until at least October. This is merely the latest chapter.

The algos were busy, reversing VIX at its SMA200 which allowed futures to recover more than half of their premarket losses.

Oil pulled a similar move, getting hammered by TPTB at its SMA200.

If the manipulators can continue manipulating so well, this will be a minor blip. But, Trump is now talking about hitting Iran “hard again tonight.” So we’ll see if volatility can continue to be contained.

Stay tuned.

Futures are off modestly ahead of the open after another disappointing trade balance print and amidst a global selloff on chip stocks.

CL’s .786 remains stubborn support.

Which to believe: SPX, which just completed a bullish 10/20 cross, or ES, which is stubbornly showing a bearish 10/20 cross?

The odds of the stasis continuing rise with Trump ringing the bell today…

Futures are moderately higher following disappointing jobs data (57K vs 130K), CL’s drop through support, and another pointed decline in VIX. The algos are happy.

CL’s drop through the .786 at 68.78 helped the 10Y back off its breakout, which in turn reversed DXY’s breakout. The level to watch is 100.77.

 

Futures are off moderately as Q3 kicks off. Currencies are taking center stage, with USDJPY making new highs and EURUSD breaking down. Don’t look now, but the 10Y just broke out.

 

Futures are flat as we wrap the 2nd quarter. I’m not sure there’s a better descriptor than “irrational exuberance.”  But, we’ll find out if, as I expect, we begin to backtest some of the previous tops and SMA200s over the next week or two.

Oil continues to be a wildcard. And, my position has not changed. I cannot see Iran giving Trump any kind of win (though he will certainly continue to claim one) between now and the mid-terms.

 

While the 10Y has been greatly affected by falling oil prices, the next leg lower (to 4.235% by Jul 22) is more likely to be driven by an equity selloff.

Meanwhile, the USJDPY is inching up on our 167.25 target…

…as EURUSD backtests before heading to 1.09-1.12…

…and DXY breaks out more convincingly, with 104.2 the next significant resistance.

Stay tuned. It’s about to get really interesting…