One and Done?
Global govt debt is at a record $82 trillion: up $20 trillion since the pandemic - up $50 trillion since 2008 - up 7 times in 23 years.
US national debt roughly $34.5 trillion at the end of February. Since June, the debt has been increasing by $1 trillion every 100 days - Insane debt fuelled spending in a demand led recovery means perpetuated inflation.
Bostic repeated his one rate-cut call - Cook cautioned about too hasty easing. Chicago Fed National Activity Index rose to +0.05 in Feb from –0.54 in January - no recession in sight. New home sales dipped 0.3% to a 662K-unit pace on higher rates.
Regional Fed surveys will continue rolling out. Philly Fed non-mfg, Richmond and Dallas Fed services today. Markets will continue to stay concerned about sharp decline in volumes in the equity markets.
Focus on chronic housing shortage across Europe - substantial upward pressure on rents & property prices. (Europe does not include the costs of shelter in its inflation measures to same degree that U.S. does; if US conventions were used, European inflation would be worse than is currently stated)
EURUSD shy of 200 dma 1.0839. Break below 1.0785 targets Feb 14 low at 1.0695 whereas 1.0875 where 10 & 21-dmas converge should resist.
Friday's move in USD/CNY made everyone believe that PBOC was preparing to allow CNY weakness - however yesterday's activity suggests otherwise. Supportive stories circulating that Chinese exports are more responsive to CNY level than Japanese exports to the yen -so the speculation PBoC tested the waters on Friday and would let USDCNY break 7.35 once USDJPY break above 151.93.
UK consumers are showing resilience as inflation eases- CBI March retail sales +0.2% from -0.7% in Feb. Mann: The last time I spoke I said my vote was finely balanced (a hawkish dissenter but switch to vote to hold rates). Sustained break of Friday's 1.2677 high required to steady the ship or else 1.2570.
Era of negative rates in Japan has ended, but path to neutral policy stance to take decades - till then weak Yen. Suzuki 's rhetoric: won't rule out steps to address disorderly FX moves - Closely watching fx moves with a high sense of urgency. 151.93 holds still .
USDINR slowly getting used to being traded after months of inactivity - Near term premiums matter more than what's happening in the East - guess USDINR would consolidate 83.30 83.45.