Syz the moment

Source: Mac10

Source: Genuine Impact

That's the 2nd biggest monthly increase since Covid. And one of the biggest monthly increases over the last 30 years outside of sales tax hikes. Inflation is not transitory in Japan... $JPY. Source: Viraj Patel, Vanda Research

Source: Charlie Bilello

The chart below courtesy of Crescat Capital / Tavi Costa is a reminder of the divergence between rising yields and the highly valued Nasdaq index. Is this divergence sustainable? Source: Bloomberg, Tavi Costa

According to Bank of America's derivatives strategists, it has never cost less to protect against an #sp500 crash drawdown in the next 12 months. Why is the cost of longer-dated S&P protection at record lows today? The most common explanations are a mix of fundamentals (e.g. a recession, if it materializes, will be short-lived and shallow; or, realized correlation is too low to warrant higher implied correlation) and vol technicals (e.g. the supply of vega on US underlyings for yield remains robust; or, due to the rise of short-dated option selling, the next shock will likely be a “gamma event” in which systemic tenors of risk don’t react strongly). Source: BofA, www.zerohedge.com

But now that the army has seized power, there are concerns over what this means for the troubled region. Indeed, from Mali in the west to Sudan in the east, a whole swathe of Africa is now run by the military. Niger's President Mohamed Bazoum - a key Western ally in the fight against Islamist militants - was defiant after soldiers announced a coup on Wednesday. But he has been detained, the army chief has backed military rule, and it isn't clear who is really in charge. Former colonial power France and the US have military bases in the uranium-rich country, and both were quick to condemn the coup (1/3 of uranium used by France comes from Niger...) There are also concerns that Niger's new leadership could move away from its Western allies and closer to Russia. If it does, it would follow the path of two of its neighbours - Burkina Faso and Mali - which have both pivoted towards Moscow since recent military coups of their own. Source: Reuters, image by FT

Japan’s central bank on Friday pledged greater flexibility in yield curve control policy, while keeping its ultra loose interest rate intact and revising its median consumer inflation forecast upward for the current fiscal year. - The Bank of Japan added it will offer to purchase 10-year JGBs at 1% every business day through fixed-rate operations, unless no bids are submitted — a move that effectively expands its tolerance by a further 50 basis points. - In a policy statement, the Bank of Japan said it will “continue to allow 10-year JGB yields to fluctuate in the range of around plus and minus 0.5 percentage points from the target level.” - “While it will conduct yield curve control with greater flexibility, regarding the upper and lower bounds of the range as references, not as rigid limits, in its market operations,” it added. - Still, the BOJ held its short-term interest rate target at -0.1% after a two-day meeting. It also raised its median forecast for inflation to 2.5% for fiscal 2023 after its July meeting, up from its 1.8% prediction in April. Market reaction? The Japanese yen strengthened and 10-year JGB yield rose after the Bank of Japan statement: - Yields for 10-year Japanese government bonds rose to 0.575% for the first time since September 2014. - The yen was trading at 138.64 against the dollar at 12:35p.m. Hong Kong and Singapore time. Source: Viraj Patel, CNBC, Bloomberg