Blowout Retail Sales Nudge Rates Higher

We’ve stuck stubbornly to our forecast for the 10Y to reach 4.75 for nearly a year, betting that sticky inflation would force the Fed’s hand. We came within 6 bps of new highs this morning after retail sales soared 0.7% (expected 0.4%) in July. Futures held on to their lows, though the pre-opening shenanigans haven’t … continue reading →

Update on Currencies: Aug 4, 2023

Futures are up moderately on USD weakness.  The EURUSD has backtested its recently broken red TL and its SMA10, sending the DXY back below a TL it was threatening to break above.  This supports our thesis that the SMA200 is the most important target, but that the tag might wait until it reaches 1.087 or … continue reading →

Forcing Their Hand

The recent breakout in oil/gas prices has now inspired a breakout in the 10Y. It’s an important headwind for the Fed, which had relied on falling energy prices to keep inflation and interest rates at an acceptable level. continued for members… … continue reading →

Mixed Messages

Futures bounced off our 50-day MA target and are up sharply on NVDA‘s blowout earnings/forecast, egged on by Speaker McCarthy’s latest promise that a debt ceiling resolution is on the way. Of course, this bullishness is unwarranted from a Fed rate hike perspective. Initial claims came in below expectations and Q2 GDP (the deflator was … continue reading →

Jawboning an OPEX Rally

Yesterday’s 1.2% spurt higher was driven not only by the usual push in USDJPY and plunge in VIX, but a healthy dose of hopium regarding the debt ceiling crisis. Congressional and White House reps were nearly unanimous in declaring that a deal is as good as done. Whether they’re speaking the truth or simply trying … continue reading →

Debt Ceiling Worries

We’re starting to see cracks in the equities and bond markets related to the debt ceiling. Interest rates are ratcheting higher. And, although OPEX-related maneuvers are working to prop up stocks, we had a momentary breakdown in SPX yesterday. Utilities, a bond proxy for some, have taken a big hit this week as investors shift … continue reading →