It seems that the market didn't like this chart at all
(ISM Manufacturing New orders & Price Paid) Source: Bloomberg, RBC
Some much needed liquidity is coming...
The TGA (Treasury General Account) is finally getting depleted Here comes the flood: Treasury injects avalanche of cash into the economy ($170BN in 3 days, the most since covid) as debt ceiling extraordinary measures are exhausted. Could this prop up risk? What is the Treasury General Account and why it matters? The TGA is used by the Treasury to hold cash to fund government operations. When the TGA balance is high, it means the Treasury is holding more cash than it is spending. This cash accumulation can occur due to higher-than-expected tax receipts or issuance of Treasury securities. Conversely, when the Treasury spends this cash, it injects liquidity into the financial system. Therefore, the TGA balance is a significant determinant of liquidity in global financial markets. Source: zerohedge
The US government RECESSION has begun:
Government + quasi-government education & health job addition accounts for ~70% of all payroll creation, down from ~85% in Feb 2024. It is expected this will fall even further in the coming months, meaning non-farm payrolls will weaken. Source: BofA
BREAKING - US INFLATION DATA RELEASED - Core PCE YoY 2.6% - lowest since March 2021
BULLISH! YoY Growth: PCE (Jan), 2.5% Vs. 2.5% Est. (prev. 2.6%) Core PCE, 2.6% Vs. 2.6% Est. (prev. 2.8%) MoM Growth: PCE (Jan), 0.3% Vs. 0.3% Est. (prev. 0.3%) Core PCE, 0.3% Vs. 0.3% Est. (prev. 0.2%) Source: @CyclesWithBach, Mike Zaccardi, CFA, CMT, MBA
U.S. pending home sales have fallen to a new all-time low
Worse than Covid. Worse than 2008. Source: Bloomberg
DOGE DEFLATIONARY EFFECTS?
Bloomberg Economics estimates that if hashtag#DOGE attempts to go for savings of $600B/year, GDP could take a -2% hit by the end of this year, the unemployment rate could rise by nearly a percentage point, and CPI y/y could fall by nearly 0.9 percentage points. Source: Kevin Gordon @KevRGordon on X
🚨US budget deficit is SKYROCKETING: The US borrowed $838 billion in the first 4 months of Fiscal Year 2025, or $7 BILLION A DAY.
This is $306bn HIGHER than the corresponding period last year, according to CBO👇 Source: Global Markets Investor @GlobalMktObserv
It's the liquidity stupid...
Bitcoin $BTC is finally catching up with the drop of liquidity (with a 10 weeks lag). The good news is that Global M2 is accelerating again (but due to the lag risk assets should resume uptrend later on - all other things being equal of course...) Source: Bloomberg, Joe Consorti
