End of day howl!


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Global Developments

  1. Technical indicators point to further downside risks for the US dollar.

  2. The reported share of dollar reserves globally rose amid market volatility in Q1.

  3. Despite the recent bounce, inflation swap markets still expect the CPI to remain subdued for years to come.

  4. Asia ex-Japan is expected to take up the largest share of global GDP over the next few years.

  5. Margin growth will become increasingly difficult for automakers over the next several years, according to Moody's.

  6. Budget airlines see capacity returning to normal.

  7. There is an inverse relationship between COVID-19 testing rates and deaths.

  8. The share of jobs that can be done at home is correlated with the GDP per capita.

United States

  1. Loan applications to purchase a home remain elevated as mortgage rates hit record lows.

  2. Credit card borrowing declined sharply this year. Households cut back spending while the government offered generous support.

  3. High-frequency indicators continue to signal a pause in the recovery.

  4. In the first quarter, Northeast states saw a sharper GDP contraction than the rest of the country.

Canada

  1. The nation's factory activity stabilized in June.

  2. Businesses expect a record drop in future sales and investment.

United Kingdom

  1. Car registrations rebounded last month but remained 35% below 2019 levels.

  2. The RICS housing index was better than expected, as housing metrics improve

  3. The reopening process has been sluggish.

Eurozone

  1. TARGET2 imbalances have widened further after the latest tranche of TLTRO funding

  2. ECB ramps up stimulus efforts

  3. The Ifo indicator has been pointing to downside risks for Germany's construction output.

Japan

  1. The Economy Watchers indicator rebounded sharply last month.

  2. The acceleration in Japan's broad money supply growth has been unprecedented.

China

  1. Rising bond yields, widening spreads with Treasuries, and portfolio inflows into the equity market (greenlighted by Beijing) are supporting the renminbi which is again below 7

  2. The headline consumer inflation rate held steady last month, but the core CPI dipped below 1% for the first time in a decade.

  3. The PPI ticked up, but producer prices remain well below last year's levels.

  4. Over the past few months, several cities have eased requirements to attract new residents and boost local economic activity. Relaxing migration rules should help the recovery in Chinese housing, according to Pavilion Global Markets. Home sales in cities with such policies substantially outperformed peers.

Emerging Markets

  1. Brazil's retail sales rebounded in May, exceeding forecasts.

  2. Russia's inflation remains subdued.

  3. EM stocks have caught up with global markets year-to-date.

  4. Commodities

  5. Gold topped $1,800/oz for the first time since 2011.

  6. Copper continues to rally.

  7. Lumber futures are breaking out.

Equities

  1. The biggest companies by market cap are the most expensive and have the highest returns this year.

  2. Will the streak of positive US economic surprises translate into Q2 earnings surprises? 70% yes.

  3. The S&P 500 futures sentiment indicator points to extreme bullishness.

  4. Market breadth hasn't been great lately.

  5. Given the market rally, VIX remains elevated. The election premium in VIX futures is well above the levels we saw in 2016 or 2012.

Alternatives

  1. Hedge fund liquidations have accelerated this year.

  2. The risk/return profile of equity hedge funds hasn't been exceptional over the past decade.

  3. Secondary fund-of-funds products, which purchase LP interests from existing investors, are quite popular this year.

Rates

  1. The US government just auctioned off the 10-year Treasury notes at a record low yield.

  2. The market is not concerned about massive deficits.

  3. Does the stabilization in US manufacturing signal higher Treasury yields? Doubtful.

  4. The iShares TIPS ETF (TIP), which holds inflation-linked Treasuries, hit a record high as investors rush to hedge against inflation.



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