The Bank of Japan's unrealized losses hit a record ¥28.6 trillion ($198 billion) in Fiscal Year 2024 ending March 31, 2025.
Paper losses from Japanese government bonds TRIPLED from the last year. However, the BOJ's reported net income was ¥2.26 trillion ($16 billion). It can take years until these bonds mature. Source: Global Markets Investor, Bloomberg
The Federal Reserve has now lost a combined $192 Billion over the last 2 years
Source: Barchart, Wolfstreet.com
The People’s Bank of China trimmed the 1-year loan prime rate to 3.0% from 3.1%, and the 5-year LPR to 3.5% from 3.6%.
A slew of state-backed commercial lenders moved to cut their deposit rates by as much as 25 basis points earlier Tuesday. As mentioned by Mo El Erian, the question remains: will this prolonged period of policy incrementalism reach a critical mass that fundamentally alters household sentiment and consumer behaviour? So far, it has failed to do so. Source: Bloomberg, CNBC
The number of Fed rate cuts continue to be revised downwards:
* June 18 (red) now 8% (92% no move) * July 30 (green) now 35% (65% no move) No cut is priced until September 17. And even that cut (blue) is disappearing. It was more than 100% ~10 days ago and is now 66% (34% no move) and continuing to fall. Source: Jim Bianco @biancoresearch
As expected, BoE cut rates by 25bps! (5-4 vote).
It came as Donald Trump hinted a UK-US trade pact was imminent. Some MIXED SIGNALS - Two members (Swati Dhingra and Alan Taylor) preferred to reduce Bank Rate by 0.5 percentage points, to 4%. Two members (Catherine L Mann and Huw Pill) preferred to leave Bank Rate unchanged, at 4.5%.
Fed leaves rates unchanged, as expected
“The committee … judges that the risks of higher unemployment and higher inflation have risen.” Powell is facing the worst outcome for a Fed President... The Federal Reserve's dual mandate is to promote two main economic goals: maximum employment and price stability... and uncertainty is on both sides How will President Trump react to this? ECB is cutting rates. PBOC as well as they see a disinflationary shock coming. Meanwhile, the Fed stays put. He is not going to like this...
A currency's reserve status should not be taken for granted.
Just look at what happened to the pound... Source: Augur Infinity
Should investors look at overbought signals on gold or focus on the long-term perspective?
Tavi Costa believes that when it comes to the yellow metal this as one of those key moments when traditional technical analysis like overbought conditions become largely irrelevant. We are likely in the midst of a monetary realignment, and attempting to time short-term corrections based on extreme RSI levels misses the forest for the trees, in his view. "This perspective underestimates the structural macro imbalances that continue to compel governments to accumulate gold" he added. He might be right...
