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🇬🇧 UK May Inflation Soars

Headline (+8.7% YoY) and core (+7.1% YoY) beat consensus expectations by +0.3ppt.

As a result, the May MPR forecasts are looking very stale.

Let's dig in!

One (of a couple) 🧵s I'll be putting on BoE/monetary policy...

#CPI #inflation #BoE Image
The +0.7% MoM core reading, while not so extreme as the Apr level, presented a continued strong beat of typical monthly values.

Since Feb, core inflation has shown only very small signs of returning towards the 2% target. The BoE will need to be done to counter it. Image
Inflation remained very broad: 10/12 sectors beat their typical monthly rate.

Big beats came in Clothing, Comms & Rec. The re-acceleration in restaurants is also a concern

If anything, this is more worrying to the BoE than the surprise jumps in Apr. Image
Read 8 tweets
1/10 CryptoWeek 19 Insights: 10 Key Points to Watch 🧐🌐 I'm back with my weekly guide to the crypto markets 🚀. Every Week I send an overview to almost 2 million subscribers on Here is a summary of the ten crucial points I'll be monitoring this week:
2/10 📈 BUSD selling may continue, pushing #BTC up. Watch for a possible price drop if BTC wells into TUSD. 📉
3/10 🔍 #Binance faces #DoJ scrutiny. Will this lead to criminal pursuit? Binance's move into #Bitcoin could hint at insider knowledge. 🤔
Read 10 tweets
#Biden backs strength of #banking system after collapse of #SVB, #SignatureBank | Mar 13
- When fed auths bailed out depositors in insolvent lenders SVB (NASDAQ:SIVB) and #SignatureBank on Monday,
Joe sought to reassure the public Image
#Ukraine-#BanderasBox opened.
#RAND Co | Jan 25
- There is an urgent need for #resources to flow into the national econ, especially the #banking system. Only European countries bound by #EU and #NATO commitments will be able to provide them
#SVB #SignatureBank #BanderasBox.
#Rand Co | Jan 25
- The key objective is to #divide #EU by placing #UsefulIdiots in political positions in order to stop #Russian #energy supplies from reaching the continent
- The entire #EU #economy will #collapse
Read 38 tweets
Thread on Japan
1/ Let me simplify the issues facing Japan #BOJ & why I believe people need to be paying attention: these are rough estimates:
*Japan's debt > $10 Trillion (in US terms) of which BOJ owns 40%+
*Japan Debt/GDP is >2.5x(largest of any developed nation)
*Japan is the largest foreign holder of US Treasuries (over $1 Trillion)
*Japan's Core CPI for January just came in at 4.2% (includes energy which is a big import for them) a 41 yr high
*Japan exports autos/auto parts/machinery/electronics etc & relies on China/US as buyers
*Japan has been artificially suppressing rates (yield curve control) & focused on keeping their 10yr capped at .5%; the recent "emergency bond buying program" from the #BOJ was $2.2 BLN (US)
*Japan spent $42.5 BLN (US) in a single day last October to strengthen the Yen
Read 5 tweets
🐻♉️↗️↘️↔️⚠️🚩🔺🔻🧮 💰

Macro Review 🧵


The #macro market has been hyper focused on growth and inflation dynamics

We got a slew of data showing inflation under control.

Yet one data point on Friday raised havoc with my portfolio.

Let’s dig into the 🧮!

The Employment Cost Index #ECI came out on Tuesday, just prior to the #FOMC meeting

#ECI +1% Q/Q represented a deceleration in employment costs
#Inflation 🔻

Home prices were also out on Tuesday.
At +8.2% y/y, housing costs continue to decline on an ROC basis
#Inflation 🔻
Read 23 tweets
Para Politikası kapsamında #FED, #ECB ve #TCMB toplantılarında alınan kararlarla #enflasyon ve politika #faizi için son verileri grafiklere aktardım.

İyi bir Şubat ayı dilerim.🙏🏻🙋🏻‍♂️…
As the #FED has increased the policy rate by 25 bp at the latest meeting, recent situation for #FederalFundsRate and #inflation are as below. Image
Following the #BOE, today the #ECB also has increased the policy rate by 50 bp. Recent situation for #PolicyRate and #inflation are as below. Image
Read 4 tweets
UK #recession risk rises as flash #PMI falls deeper into contraction in January amid worsening service sector economy and ongoing manufacturing decline. More at
Survey highlights how headwinds are driving UK economic activity lower, though price pressures are thankfully cooling - albeit remaining elevated
Survey data also highlight how the #BoE policy tightening is having an impact. More rates hikes to come amid reduced government help to households and businesses will undoubtedly add to recession risks.
Read 4 tweets
1/ A few market thoughts and updated thoughts on $TSLA from a behavioral finance POV; #BOE #BOJ interventions are proving to be short-lived as the British 10yr Gilt (yields higher) and the $JPY (weaker) have both breached levels where intervention was announced/executed
2/ faith in Global Central Banks continues to wane as investors begin to underwrite these Banks as credits rather than limitless piggy banks; this "looking under the hood" leads me to one of my favorite topics, $TSLA, which has really never traded on fundamentals..but first
3/ in 2000, I remember watching the stocks of the tech bubble's greatest hits ( $JDSU Lucent, Nortel etc) no longer reacting to the same type of news that kept driving these stocks higher: "contract wins" "new product launches" "accretive acquisitions" etc.; it was a sign that
Read 13 tweets
The #Fed #pivot talk has intensified lately.

Sth possibly breaking in the #UK, European financial system ( $CS, $DB...), #RBA pivoting by hiking less than expected, higher financial risk in the #US...

Should the #Fed #pivot and why?

Let's demystify all this.

A thread.

Those that follow me know I've been calling the #Fed to #pivot for quite a while.

Ever since mid-May it's been clear to me the #US #economy is in a #recession which should prompt the #Fed to #pivot in Sep.

And every important economic indicator warranted the #Fed #pivot.

But the #Fed decided to turn the blind eye to the #economy in an effort to try to regain some of the credibility they lost last yr by "transitory" talk.

So instead of amending things, they have made another policy error.

Here is more about this:

Read 25 tweets
DISCLAIMER : This is for educational purpose and not financial advise.

Monthly market analysis Sep 30, 2022

#StockMarket Worst week, worst month, and worst quarter of the year since Financial crisis and dot-com bubble. Why it happened?

Let's look at more closely 🧵👇
1. After making reversal at H/S neckline in early Aug, US 10Y Yield #bond broke out from Feb'11 high 3.73% and have held up strongly for about a week. This month, yield has gone up +20%, bad for risk and long duration assets

#StockMarket Image
2. US 02Y Yield #bond broke out resistance 3.7% and past 4% strongly after Fed Reserve hawkish announcement and never look back. This month yield has gone up more than +22%

#StockMarket Image
Read 49 tweets
A bit of myth busting... the #BoE hasn't spent £65 billion to prop up the economy / bail out pension funds / save #KwasiKwarteng (or any variation)...

Instead, it has said it will buy gilts in 13 daily auctions, with a limit of £5bn each day.

Today it did just £22 *million*...
The aim of this policy is to cap gilt yields by signalling that the Bank will act as the buyer of last resort to prevent forced sales by pension funds from driving yields even higher.

If this signal is credible, the Bank will not actually have to buy anywhere near £65 billion.,,
The fact that it bought just £22 million today can also be seen as a sign that it is more comfortable with where yields are now. (Longer dated yields have fallen to around 4%.)

Note also that offers to sell today amounted to less than £2bn - a sign that the panic is easing.
Read 4 tweets
I rarely tweet "threads" on the markets but I feel compelled to at this moment; mainly so I can clear my own head but also b/c I hope by sharing my thoughts I may help some other investors; I would normally do this recording @OnTheTapePod but this is a stream of consciousness
as bearish & prepared as we were at FrontPoint in 2006 we were shocked at the depths/reach/contagion of the financial crisis; not nearly as shocked as the regulators/govt but shocked how little they understood about the leverage in the system and how caught off guard they were
the programs the #FED/Treasury threw at the crisis (TALF/TARP/PPIP/QE/short bans) stopped the bleeding but prevented assets from clearing at free market (natural) prices & created the moral hazard that has led us to this moment, with QE2 (2010)/QE3 (2012) adding more fuel
Read 18 tweets
#PCE #Core #Inflation keeps rising.

Main indicator for the #FederalReserve when judging whether or not to continue raising #interestrates.

#Powell was quite clear in his speeches that they will continue raising "into pain" as long as price stability is not achieved.

By "into pain", they are primarily referring to their dual mandate of price stability (#inflation) and maximum #Employment.

But there is not much pain showing up in the job market.

Last weekly jobless claims hit a 5-month low.…
So to summarize, #TheFed has 2 jobs:
1. Reduce #inflation (not done)
2. Maximize #employment (done)

And they've been adamant about raising #rates until 1. is done, even at temporary setbacks to 2.

Unless they plan on pulling a #BoE, anything short of #75bps/#100bps is hopium.
Read 4 tweets

Markkinoilla nähtiin jotain poikkeuksellista, kun Englannin keskuspankki (#BoE) ryhtyi keskiviikkona 28.9.2022 yllättäen hätätoimenpiteisiin.

Mistä on kyse, ja miten budjetti sekä eläkeyhtiöt liittyvät kuvioon?

Suosittelen kuppia kuumaa kaveriksi 🫖

Alkuun on hyvä ymmärtää, että inflaatio on ollut Englannissa monia muita alueita korkeampaa (vuodentakaisesta 9,9%). Energiakriisi on iskenyt kovaa saarivaltioon.

Hillitäkseen inflaatiota, keskuspankki (Bank of England, BoE) on nostanut korkoja muuta euroaluetta nopeammin.

Kun korkoja nostetaan keskuspankin toimesta, velkakirjojen hinta markkinalla laskee.

Ilmiö on sama kuin jos vakaata osinkoa maksavan yhtiön hinta laskee – sen osinkoprosentti (omistajan saama ”korko”) nousee.
Read 19 tweets
Did the #BoE step in to prevent pension funds from going insolvent? A thread (1/8)
It is very rare that pension schemes themselves go bust. It could be that their deficit is so high that it bancrupts the sponsor, liabilities then would be transferred to the Pension Protection Fund. (2/8)
The irony, and perhaps a real risk is that the PPF has a very significant #LDI strategy, so they will be under a lot of stress too. (3/8)
Read 8 tweets
Reflections on the morning after - and especially the markets… 🧵

It may well take some time for the dust to settle on #KwasiKwarteng’s first #Budget (yes, 'Budget’: if it looks like a duck, walks like a duck and quacks like a duck, then it’s fair to call it a duck)...
The initial reaction from most economic commentators and in the financial markets has been a loud boo! There are some things I would have done differently. But the overall strategy is sound, and sentiment should recover as the economic benefits become clearer...
There are two aspects I particularly liked. One is the emphasis on breaking the ‘doom loop’ of weak economic growth and rising taxes, both with tax cuts and – at least as importantly – structural reforms on the supply-side...
Read 16 tweets
Expect lots of warnings today from #TeamRishi about the cost of higher interest rates as the Bank of England (#BoE) hikes.

Three counters...

1. The #tax cuts proposed by #LizTruss are unlikely to have any significant impact on #inflation (they could even help to reduce it)...
2. It's #TeamRishi that's playing at 'fairytale economics' if they think the current ultra-low level of interest rates is normal, healthy or sustainable (most economists agree that fiscal policy is too tight - largely due to #Rishi's tax hikes - and monetary policy is too loose)
3. It is at least right to worry that rising short-term interest rates will add to the cost of public debt. But this simply strengthens the case for the government to lengthen the maturity of borrowing to lock in low rates - as #LizTruss has proposed!

Read 3 tweets
❗Hoy se ha publicado en el #BOE el 🧾 RDL 11/2022, con importantes novedades en materia de #pobrezaenergética. Mañana haremos un análisis más extenso, pero los titulares de urgencia son 👇
Se prorrogan 📆 hasta el 31/12/2022:
☑️ Moratoria de cortes de agua, luz y gas para beneficiarios del #bonosocial
☑️ Ampliación de los descuentos del #bonosocial (60 y 70%)
☑️ Acceso al #bonosocial para autónomos vulnerabilizados
☑️ Impuesto eléctrico al 0,5%
Además, bajada del tipo IVA para la factura eléctrica al 5% en los siguientes casos:
➡️ Suministros con potencia ≤ 10 kWh, siempre que el precio del mercado mayorista del mes anterior sea superior a los 45 €/MWh
➡️ Hogares acogidos al #bonosocial, que sean vulnerables severos
Read 4 tweets
Has #Sunak really lost £11bn in a 'debt blunder'?

This is complicated, but for once I'm going to side with the Treasury here... 🤓

Three key points:

1. The Treasury would have had to order the #BoE to force commercial banks to swap reserves for gilts - not a good look...
2, The Treasury would have had to get the timing just right to save £11 billion, and done so while issuing huge amounts of new gilts without disrupting the market, or influencing interest rate expectations. Not realistic.

Indeed, this strategy could easily have lost money...
3. The 'insurance' proposed by @NIESRorg would also only have been temporary, because it would replace reserves with short-dated (1-2 year) gilts.

Looking further out, the average maturity of UK gov't debt is already relatively long - for which the DMO deserves more credit.
Read 3 tweets
Con gusto. New links to observe how the Arctic sea ice (#BOE) and Greenland ice sheet (#GIS) export fresh cold water to the Atlantic. How long until the AMOC tips and shuts down, accelerating warming and sea level rise?…
Hansen 2016…
Monsoons. Note what mental contortions the authors perform under the absurd @Peters_Glen @hausfath @MLiebreich crusade against #RCP85. Have we stopped this nonsense yet?…

@climate_ice, is GIS subglacial methane cycling accelerating?…
@Peters_Glen @hausfath @MLiebreich @climate_ice This really isn't hard. Please focus and do science that matters if you can. We need your support.
Read 5 tweets
BoE votes 8-1 to raise rates by 25 bps to 0.75% comparable to pre-pandemic level.
BoE's Cunliffe backs no change to rates. #BoE $GBP
UK bonds gain after BoE; 10-year yield falls 7bps to 1.56%. #BoE $GBP
Read 5 tweets
Thanks to @GeoffCutmore, @cnbcKaren & the #SquawkBox team for having me on this morning's show.

We discussed #bonds & #centralbanks, touched on #supplychains & talked of #Growth's vulnerability, #commodities' appeal.

Slide deck follows:-

Is your box still backed up in port? How much does the onward haulage cost? What happens to #freight rates after #LNY/#Beijing2022?
The bet is that #energy cannot *possibly* rise as far and fast this year as last, but what about all the other inputs? To what extent are these and other costs yet to be passed on?


Read 15 tweets
Hoy se ha publicado la #ReformaLaboral en el #BOE. Os contamos los puntos más importantes 👉…
1⃣ La norma elimina el contrato por obra y servicio, pero mantiene dos tipos de contratos temporales

2⃣ Quien acumule más de 18 meses sobre 24 de contratos temporales pasará a ser indefinido

3⃣ Como hasta ahora, el contrato por defecto es el indefinido…
4⃣ El convenio de empresa tiene prioridad sobre el sectorial, como desde la última reforma, excepto para los salarios

5⃣ Es decir, se prioriza el convenio de empresa para el pago de horas extra, los horarios, las vacaciones o las medidas de conciliación…
Read 11 tweets
Zor geçeceğini söylediğim hafta Türk lirası için stresli bir şekilde başladı bile. 😔

Zaten birçok yerde yazıldı, ama bu haftaya ilişkin dikkatimi çeken gelişmelerin başlıklarını kısaca yer vereyim.

1) 20'ye yakın merkez bankası toplantısı bizleri bekliyor. Önemli olanlar:
2) #FED toplantısı için beklenti çok önceden oluşmuştu zaten. Daha sert hatta öncekilerden farklı bir enflasyon söylemi ve varlık alımlarında artış bekliyorum.

#ECB açısından merkez ve çevredeki farkların artması sıkıntı yaratmaya başlayacaktır artık.

#BOE ise erteleyecek gibi.
3) #Omicron varyantı için sonuçların gelmesinin en az iki hafta süreceğini düşünüyordum ve yaklaşan tatil sezonu öncesi risk algısı daha yüksek olduğu için piyasalar biraz daha satış ağırlıklı hareket edebilir yönünde görüşler var.
Read 9 tweets

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