Germany will go from being a net exporter of electricity to a net importer of electricity in Europe
Germany will go from being a net exporter of electricity to a net importer of electricity in Europe after the nuclear power plants are shut down. Last week, electricity imports reached their highest level in one day since 2021. Source: HolgerZ, Bloomberg
Ifo expectations index came out way better than expected
German Ifo Business Climate Index improves to 93.6 in April from a revised 93.2 in March. Ifo current assessment index fell to 95 (vs 96 exp. from 95.4 in March. BUT Ifo expectations index improves to 92.2 for the 6th month in a row from a revised 91.0 in March & way above 91.1 expected. Source: Bloomberg, HolgerZ
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.
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
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.
The US debt hole grows bigger. Higher interest rates do not help
The problem with deficits is that they add up. Each annual deficit adds to the total National Debt. This debt hole grows bigger because of annual interest expense on all this debt. Not a problem when interest rates are ~0%. Big problem when they're 5% per year (now). Source: Jesse Myers Croesus_BTC
Good news! Bloomberg US Financial conditions has been loosening since banking turmoil stabilized
Source: Bloomberg
