Europe is filling its gas storage weeks early
The world is becoming awash with natural gas, pushing prices lower and creating an overabundance of the fuel in both Europe and Asia — at least for the next few weeks - Bloomberg
Houston we have a problem...
While equity markets seem complacent about the imminent debt ceiling crisis, the same can not be said of the rates market, where the "kink" in T-bills maturing around the X-date is turning spectacular... Bottom-line: The spread between 3-month (5.12%) and 1-month (3.40%) Treasury yields has never been higher: 1.72%. Indeed, the yield on US T-Bill which mature BEFORE June is much lower than it should be given the current level of the Fed Funds rate: below 4% vs. a Fed Funds rate already close to 5%. This premium is probably related to the fact that, for T-Bill maturing before the end of May, there is no uncertainty related to the debt ceiling, since the US Treasury will have the cash needed to meet principal redemptions. But from June onwards, the risk of the debt ceiling being hit increases; this triggers a jump in yield with T-bill yielding roughly the same than Fed Funds. Source chart: Charlie Bilello
There is a huge dichotomy between US Homebuilders stocks performance and US housing starts
US Home Construction ETF ($ITB) is at a 52-week high, up 25% over the last year. Meanwhile US Housing Starts are down 21% from their peak last April.
The Fed balance sheet is shrinking again
Over the last 4 weeks, the Fed’s balance sheet has reversed 36% of the post-SVB liquidity injections ($392 billion) with a total decline of $141 Billion. Source: Charlie Bilello
US Housing Starts were were down 17% over the last year, the 11th consecutive YoY decline
US Housing Starts were were down 17% over the last year, the 11th consecutive YoY decline (longest down streak since 2009). Tends to be a leading indicator for the economy, recessionary signals continue to build. Source: Charlie Bilello
Apple ($AAPL) is in a league of its own
With a market cap of $2.6 Trillion, Apple is $500 Billion bigger than Microsoft. It's bigger than the GDP of - South Korea, Canada, Russia, Brazil and Italy. $AAPL is up +305% over the last 5 years. Source: Oktay Kavrak, Leveraged Shares
UK Food Inflation continuing to make cycle highs of up +19.6%
UK Inflation surprises to the upside at +10.1% YoY. The surge in UK Food Inflation has been contributing to it.
Inflation remains hot in the UK, lifting prospects for interest-rate hikes
Britain’s inflation rate remained stubbornly high at 10.1% in March. The pace was driven by the strongest increase in food prices in more than four decades. Economists had expected a slowdown to 9.8%. Traders ramped up bets on further rate increases from the BOE as the double-digit reading provided a wake-up call for investors who thought the tightening cycle was close to over. Source: Bloomberg
