Friday's payrolls report changed the landscape a bit for Fed funds expectations
On Thursday, traders were pricing in peak rates below 4.9% and 50bp of rate cuts by yearend. Today, they're pricing in peak rates of 5.1% and less than 30bp of rate cuts. Source: Bloomberg, Lisa Abramowicz
Bank of Japan (BoJ) owns ~50% of Japan's national debt
Japan's national debt stands at 1,280 trillion Yen or roughly $9.2 trillion. Bank of Japan (BoJ) owns ~50% of Japan's national debt: 564 trillion yen. If they continue with same pace of bond buying, they will own all the outstanding bonds in 33 weeks Source; WallStreetSilver, SagarSinghSetia
Fed fund rate above Core PCE for the first time since the pandemic!
For the first time since February 2020, Fed funds rates are positive in real terms as the Core PCE index came out at 4.4% (vs. 4.5% for the Fed funds rate). This bodes well for an imminent halt in rate hikes, unless the US economy surprises on the upside. Source: Bloomberg
Inflation is always and everywhere a monetary phenomenon...
This chart highlights that #inflation is always and everywhere a monetary phenomenon. Eurozone M3 growth slows to 4.1% in Dec from 4.8% in Nov. Lower money supply growth will bring inflation down further. Source: HolgerZ, Bloomberg
End of the tightening cycle for the Bank of Canada?
The Bank of Canada (BoC) raised its policy rate by 25bps to 4.5%, its highest level since 2008. Surprisingly, the central bank and its governor Tiff Macklem stated that the policy rate will be held at its current level unless economic data (#inflation) surprises on the upside. Source: Bloomberg.
M2 continues its record collapse
M2 continues its record collapse: down 5.4% over the final 3 months of 2022 & down 1.3% over the past year. Source: Willie Delwiche
Central Banks Gold Reserves
Breakdown of global central bank gold reserves shows U.S. way out in front in terms of nominal reserves; yet, as % of total reserves, France and Germany are catching up. Source: Arbor Research
Fed's deleveraging continues
Total assets have shrank another €19.5bn past week. Since start of QT, the Fed's balance sheet has shrunk ONLY by $476bn. Source: Bloomberg, HolgerZ
