In case you missed it... The US job market continues to deteriorate
Job openings fell -358,000 in February to 6.88 million, giving back most of the January jump. The 3-month moving average continues to fall, now at ~6.89 million, now below the 2018-2019 pre-pandemic levels. There are now just 0.9 job openings for every unemployed worker, near the lowest of the current business cycle. By comparison, the ratio peaked at 2.0 in 2022, meaning available jobs per unemployed worker have been cut in half. Total separations have also dropped to a decade low, suggesting employers are neither hiring nor firing, effectively freezing the labor market in place. The job market is quietly weakening beneath the surface. Source: Global Markets Investor, wolfstreet
Fixed Income: Are markets starting to price in “growth fear” (instead of inflation fear”) ?
•A notable bid to bonds on Friday (decoupling from the correlation-one with oil and stocks) suggests inflation fears are ebbing, and attention is shifting to growth concerns. Monday market action gives the same message… •5Y5Y inflation swaps signal the ongoing decline in medium-term inflation... Source: Bloomberg, www.zerohedge.com
This is not Apple, Tesla or even Nvidia. It’s the U.S. National Debt.
Source: Not Jerome Powell
U.S. National Debt just hit $39 trillion
The last trillion was added in just 146 days. That’s $6.85 billion every single day. Or $79,282 every second. Interest costs now exceed $1T annually. Source: Hedgeye
The odds of a rate hike over the next three months is now higher than the odds of a cut.
A month ago, no one would have believed this. Source: Ryan Detrick, CMT
February’s PPI inflation was HOTTER than expected, marking two consecutive PPI inflation reports that were WORST than expectations…
🔴 US February PPI • PPI MoM: +0.7% (est. +0.3%) • PPI YoY: +3.4% (est. +2.9%) • Core PPI MoM: +0.5% (est. +0.3%) • Core PPI YoY: +3.9% (est. +3.7%) ➡️ Inflation pressures remain above expectations. Market eyes now shift to Powell’s speech later today. Source: OnlyOptionsTrades
In germany, long-term inflation expectations are now rising sharply.
Over a 10y horizon, markets are pricing in inflation of 2.17%; well above the ECB’s 2% target and the highest level since 2024. Source: HolgerZ, Bloomberg
The effect of fiat money system on inflation
The KOSPI “VIX” currently trades more like an oil volatility proxy than a traditional equity vol index. Latest note on Korea here. Source: LSEG Workspace, TME
