BREAKING >>> ECB rates unchanged as expected but ECB gives quite explicit indication of coming rate cut in June - unless they are surprised. No rate cut size given.
Note also a Critical Change In The ECB's Language (UBS): "The ECB noted that wage pressures are moderating and those wage gains there are, are tending to be absorbed by companies in their profits. That is something ECB President Lagarde said a month ago was a prerequisite – indeed it was a worrisome signal as far as equity was concerned, specifically requiring lower profit margins. But contrast today's wording with last month's: that inflation remained high because in part of high wages. So, having set up a margin squeeze on wage absorption as a critical requirement, Lagarde should draw attention to that in the press conference". The first indication out of today’s ECB governing body meeting is consistent with President Lagarde’s previous statment that the Eurozone’s central bank is not “Fed dependent.” Source: Piet Haines Christiansen
Goldman is embracing the rotational trade as well:
"Sell your Tech Stocks and invest elsewhere" says Goldman Sachs
In our 2024 "10 surprises 2024" (see link below), we had surprise #6: "What if inflation rises again?"
The idea here was that inflation could experience a second wave similar to that seen in the 70s and 80s. And this would lead inflationary assets (e.g., cyclical stocks) to catch up with deflationary assets (e.g. technology stocks). Below an uopdate chart (courtesy of HZ on X) taking into account yesterday's US cpi print... Has a second inflationary wave begun? https://lnkd.in/eDPyFa_9
Yesterday was very painful for diversified 60-40 (equities / bonds) portfolios
Source: Bloomberg
If technical analysis works on this chart, the yen might see considerable more weakness againt dollar in the coming weeks...
Source: Ole S Hansen
The Federal Reserve's next move might be to raise interest rates warns Former Treasury Secretary Larry Summers.
Source: Barchart
JP Morgan and BlackRock were given insider information about Wednesday's inflation numbers by the Bureau of Labor Statistics 🚨
Source: Barchart
US inflation continues to rise, with no decrease in sight according to Zerohedge.
Since January 2021, inflation has not fallen in a single month, leading to an overall increase of 19% in less than four years. Additionally, the US has not seen a year-over-year inflation print below 3% in 36 consecutive months. The Fed's 2% target has also been surpassed for 37 straight months. This compounding inflation may have long-term impacts on the economy. Source: The Bobeissi Lezzer
