JUST IN 🚨: There is now a 100% chance of a 25 bps interest rate cut by September, according to CME FedWatch
Source: Barchart
🚨 Breaking! US GDP growth surpasses expectations, hitting 2.8% (est. 2.0%, prev. 1.4%).
GDP Annualized QoQ Contribution: Consumption 1.57 pp (prev. 0.98 pp) Government Spending 0.53 pp (prev. 0.31 pp) Investment 1.46 pp (prev. 0.77 pp) Exports 0.22 pp (prev. 0.17 pp) Imports -0.93 pp (prev. -0.82 pp) Source: MacroMicro
Bulls praying to Lord Powell for a rate cut next week
Source; Barchart
US 10y-3m yield spread has been negative for more than 440 days.
But no recession so far... Source: Kevin Gordon
The US labor market continues to weaken.
US job postings on indeed.com declined 12.4% year-over-year to their lowest level since April 2021. Overall, US job postings are down by ~50% since their December 2021 record. However, nationwide job postings are still 11.7% above their pre-pandemic baseline, according to Indeed. Meanwhile, US job openings unexpectedly increased in May to 8.14 million from 7.92 million in April, according to the latest BLS data. Data provided by Indeed is more current than the BLS-provided series, which suggests a further decline in US job openings is coming. Source: The Kobeissi Letter, Indeed.com
Adjusting for inflation, the Japanese Yen is at its weakest point in 57 years 🚨
Source: Barchart, Bloomberg
The most interesting question going into next week is whether the US economy is picking up.
Did it start with the release of the June data? Is this going to frustrate a September rate cut? The Bloomberg Surprise Index (see chart below) bottomed on July 5, the nonfarm payroll release date. Since then, it has been trending higher. The move higher over the last five days (one business week) has been the biggest since September 2021 (bottom panel). Source: Jim Bianco, Bianco Research
What is happening in Poland is nothing short of economic wonder.
Standard of living in Poland overtaking Spain and Italy within just one generation is amazing. Source: Michel A.Arouet, IMF
