Treasury Unveils Quarterly Refunding Plans, Initiates Buyback Program  The Treasury recently shared its borrowing forecasts for Q2 and Q3, revealing plans to sell more debt than previously expected in Q2 but less than anticipated in Q3. This announcement coincided with the release of the Quarterly Refunding Announcement by Treasury Secretary J...

FOMC Holds Rates Steady Amid Inflation Concerns  The Federal Open Market Committee (FOMC) is expected to maintain interest rates between 5.25-5.50% in its upcoming meeting. Strong economic data suggesting persistent inflation and a slower economic growth narrative are likely to make the central bank cautious. However, recent meeting minutes in...

Treasury's Borrowing Strategy Impacting Market Liquidity  How the Treasury plans to fulfill its borrowing needs, balancing short-term bills and long-term coupons, will significantly affect liquidity and the performance of risky assets. Quantitative tightening is running out of time, and the Federal Reserve is likely to cut interest rates later...

Eurozone Exits Recession in Q1  In the beginning of the year, the Eurozone economy saw a growth of 0.3% quarter-on-quarter, which surpassed expectations, following two quarters of slight contraction. Spain led among the major member states with a remarkable growth of 0.7% quarter-on-quarter, while Germany, France, and Italy all showed sim...

FOMC May Meeting: Interest Rates Hold Amid Inflation Concerns  Tomorrow, the Federal Open Market Committee (FOMC) is anticipated to maintain interest rates between 5.25-5.50% during its May meeting. This decision stems from robust incoming data indicating persistent inflation and a slowdown in GDP growth, which are likely to keep the central b...

Fed Likely to Cut Rates Despite Inflation Rebound: Impact on Markets  The Federal Reserve is likely to opt for a rate cut despite the resurgence of inflation, posing a risk of market adjustment favoring dovish policies. While there's a debate on what the Fed should do versus what it will do, it seems evident that increasing inflation should pr...

Chicago PMI Plunges to 37.9, Stagflation Looms  Remember the good times back in November 2023 when the Chicago PMI was at its highest point in two years?  Well, things have taken a turn for the worse since then.  The PMI has been on a downward spiral for five consecutive months.  April's data just came out, and it's not what we ...

US Home Prices Surge for 13th Consecutive Month, Up 0.61% in February  Home prices in the top 20 cities of America kept climbing for the 13th consecutive month in February, as per the latest report from S&P Global Case-Shiller. The increase was substantial at 0.61% compared to the previous month, significantly exceeding the expected 0.1% r...

Banking System Faces Renewed Crisis as Republic First Folds  Less than a year has passed since the 2023 bank crisis, during which several major banks, including Silicon Valley Bank and Signature Bank, went under. Back then, I predicted that more banks would face similar fates, and it seems my prediction is coming true. Things seemed calm in th...

Treasury's Borrowing Estimate Sparks Market Debate  Before Wednesday's announcement regarding the Quarterly Refunding by the Treasury, along with the latest update from the FOMC, and the release of today's Treasury Borrowing Estimate report, there's a significant debate stirring within the rates market. This debate carries potentially signific...

Goldman Sachs Report Warns of Equity Struggles Amid Rising Interest Rates  In contrast to his recent optimistic tone, the latest Weekly Kickstart report from Goldman Sachs' David Kostin contains a hint of caution. Kostin acknowledges that many clients are questioning his positive outlook for stocks, particularly if the market adjusts its expec...

Global Markets Weekly Wrap KW 17 : Global Markets React to Geopolitical Tensions and Economic Data  U.S. Stock Market Sees Third Consecutive Retreat Amid Geopolitical and Interest Rate Concerns The past week witnessed a continued downturn in U.S. stocks, with geopolitical tensions in the Middle East and apprehensions about prolonged high inter...

Consumer Sentiment Drops as Short-Term Inflation Expectations Rise  Once again, short-term inflation expectations have increased, as indicated by the latest UMich sentiment survey. One-year expectations for April finalized at 3.2%, up from the preliminary 3.1 % reported earlier and 2.9% in March. This marks the highest level since November 202...

Surging Inflation Challenges Rate-Cut Hopes  Recent inflation data has surprised observers with an upward trend, putting pressure on doves hoping for earlier rate cuts. Today's release of the Core PCE Deflator, a key inflation indicator favored by the Fed, is crucial. Last month's increase in the headline deflator and yesterday's rise in core ...

Money Market Funds See Modest Growth Amid Tax Season Winding Down  Following the significant outflows from money market funds the prior week, there was a modest increase of $9.1 billion in total assets last week, though they still stand below the $6 trillion mark at $5.97 trillion as tax season winds down. The influx into money market funds up...

Pending Home Sales Defy Expectations, Remain Lower Year-on-Year  After a surge in new home sales (partly due to previous downward adjustments) and a sharp drop in existing home sales in March (accompanied by a significant decrease in housing starts and permits), expectations were for a slight month-over-month increase in pending home sales dat...

US GDP Plunges in Q1, Raises Stagflation Fears  If the Biden administration wanted the Federal Reserve to consider lowering interest rates and implementing monetary easing before the election, they would need to see signs of significant economic decline in the US right about now.  That's why it's not surprising that the Biden Bureau of Ec...

Market Inflation Hedging Lagging; Risks Rise  Despite clear indications that the risk of price growth is increasing, there is still limited evidence of investors hedging against inflation in the markets. This week, attention remains on inflation, especially with the upcoming release of the first quarter's US Personal Consumption Expenditures (...

Gold Prices Surge Amid Economic Uncertainty  The recent rise in gold prices hasn't received much attention from mainstream financial media, possibly due to the overshadowing effect of surging prices in cryptocurrencies like Bitcoin. The media, often influenced by government and central bank interests, tends to downplay gold's significance as a...

Eurozone's Paradox: Growth Surges Amid Rate Cut Talks  Europe's current situation presents a blend of contradictory elements. On one hand, ECB's de Guindos hinted at an imminent rate cut in June, suggesting a winding down of the fight against inflation. On the other hand, Euro-area's private-sector activity surged to its highest level since Ma...