Macro

• The past week saw insights on Bank Negara Indonesia (BBNI IJ), Bukalapak,Astra International,Siloam International Hospitals, Bumrungrad Hospital, Multi Bintang Indonesia, Sai Gon Cargo Service (SCS VN).
• There were also macro insights on Indonesia and Vietnam, and a sector insight on Indonesian banks, and a further insight on Sheng Siong (SSG SP). 
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.  

• ”Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.”

• With this sentence, the Fed announced the tapering of their QT program last week.

• The Federal Reserve has been running QT (Quantitative Tightening) since mid-2022: this process is aimed at unwinding the multi-trillion Fed bond holdings accumulated during previous QE episodes

• Everything you need to know about the key figures in the week ahead and how we trade them.
• This week we focus on the BoE, the Riksbank, Norwegian CPI numbers and Japanese wage-flation.
• Markets see August as the most likely timing for a cut from the Bank of England and as the March inflation report surprised on the high side of consensus, the services inflation still runs at a 0.4-0.5% MoM pace adjusted for seasonality.

• -30% // Cocoa Bubble Has Busted Just two weeks ago, the most-active contract hit a record of almost $12,000 a ton as the industry grappled with the fallout of severe supply shortages.
• “It’s important to underscore that the recent downturn in cocoa prices is primarily a result of trading maneuvers, not a realignment of market fundamentals,” analysts at Fitch Solutions’ BMI unit said in a note, adding they expect volatility to persist.
• Volatility spiked as bigger margin requirements spurred traders to close out positions, helping to drive aggregate open interest in cocoa futures to the lowest in more than a decade.

• Malaysia’s government announced intentions to hike civil servant salaries by 13% beginning in December 2024. The fiscal impact, we opine, is largely manageable. 
• There are political motivations behind this move; the unity government coalition will be hoping to win brownie points among the Malay-majority civil servant electorate. 
• But this move should not be viewed merely as a populist gimmick, the hikes should be seen as responding to the needs of broader civil service reforms. 

• Freight rates are rising again and it will likely impact USD inflation in Q2 already.
• The Saudis are trying to bring back the oil bulls via keeping the market tight. ‘
• Our models are close to entering a long oil bet again..

• In this insight, we discuss the use of Smartkarma Smartscore system to screen stocks in KOSPI 100.
• For top 50 companies (in KOSPI 100) in Smartscore rankings, their share prices were up on average 7% YTD. Bottom 50 companies had average share price decline of 7.8% YTD. 
• In using the Smartkarma Smartscore system, it may be appropriate to describe it in terms of “WHERE THERE IS SMOKE, STAY AWAY.” 

• Hello everyone, and welcome back to our weekly portfolio watch.
• A slightly positive week for our macro portfolio, which after a couple of days of sell-off in equities have gained ground again after the FOMC meeting Wednesday, revealing the Fed’s intend of lowering the monthly redemption cap on USTs from USD 60 bn. to USD 25 bn.
• The slight dovish narrative is back in market pricing, and the mix of dovish central bank vibes and added liquidity will likely rule markets in the coming weeks, as economic data from the US will continue its run.

• Stock Trader’s Almanac popularised Sell in May and go away. Repeated underperformance of the Dow Jones index during the six-month period from May to October lent credence to this.
• Twenty four years of data (May 2000 to April 2024) confirms the continuation of Nov to Apr outperformance over May to Oct.
• This outperformance gets exaggerated during election years. S&P 500 generated outperformance of 7.27% with Dow Jones delivering 9.18% followed by Nasdaq at 0.52%.

• Fed Chairman Powell offered markets a modestly dovish overview of the policy outlook after this week’s FOMC meeting, notably the more aggressive tapering of quantitative tightening.
• US corporate profit results for Q1 have been respectable compared to the previous decade, but revenue performance has been below par. Operating margins are holding up well.  
• Analysts remain buoyant about the profit outlook for 2024 and next year, despite the Fed’s higher for longer approach, thereby suggesting that equity returns will be largely earnings-driven.

• A review of the main short-term drivers of stock prices, namely interest rates, geopolitical risk and the earnings outlook, are all pointing to higher stock prices.
• Short-Term technical indicators such as breadth and momentum are also bullish.
• The key risk to this bullish outlook is a continued deterioration in banking system liquidity that could pose headwinds to stock prices.

• Iron ore continued to lounge around the 117 USD/ton levels, but there is increased optimism for Iron Ore and The China Property/Auto Stimulus Angle 
• Spreads between 65 and 62 widened to 13.8 USD/ton from 12.6 USD/ton last week, and we expect this spread to build further. 
• The street now widely anticipates the China TSF number between 9-15th of May, which is expected to grow in April at 14.5% YoY on consensus estimates to 1.4 trillion Yuan.

• Happy Sunday from a wet Copenhagen!Let me just admit to it upfront.
• Last week didn’t play out according to my macro thesis.
• The US cycle suddenly showed signs of weakness in surveys, which alleviated some of the pressures in USD rates and in USD versus Asian FX.

• PMI Data: Mixed bag of Purchasing Managers Indices across Asia, with India showing record-breaking strength at 58.8.
• Trade Performance: Recent trade data indicates resilience in China’s exports despite global demand weakness.
• Japan’s Economic Struggles: Japan faces significant challenges, with exports below 2010 levels and key indicators pointing to deep economic trouble.

• A weekly review of recent events impacting our investment themes.
• No surprises at the Fed meeting and relief at no hint of rate hikes despite the data
• Prices Paid in the ISM predicting an uptick in CPI

• US Nonfarm Payrolls shows disappointing growth in jobs, much lower than the anticipated addition of 243,000 jobs.
• April’s print is also lower than the average monthly gain of 242,000 jobs over the previous 12 months.
• Unemployment rate comes in at 3.9%, marginally higher than analyst expectations of 3.8%.

• During the period under consideration, i.e. February 28th , 2024 to March 29th, 2024, the EUR/JPY exchange rate fluctuated between 160.55 and 165.17.
• The MA-10 line was moving above the MA-20 line for the first two weeks, and then it crossed below the MA-20, maintaining a steady movement until it crossed over again on March 22nd MA-20 line retained upward trend throughout the entire period.
• Based on Graph 2, the CCI (red line) was moving downwards at the beginning of the period under consideration but after March 12th the movement changed to the opposite direction.

• The Norges Bank has maintained the policy rate at 4.5%, aligning with expectations and previous forecasts, to control inflation that is still markedly above the 2% target despite a gradual slowdown.
• Economic activity in Norway is slightly better than expected, with resilient employment but continued low growth. Rising international policy expectations and a weaker krone complicate future monetary policy decisions.
• The Committee is prepared to adjust the policy rate up or down, depending on forthcoming economic data, focusing on inflation trends and economic growth rates.

• The Euro area economy narrowly avoided a technical recession in the second half of 2023 and started the new year with mixed macroeconomic fundamentals.
• Although decreasing inflation, solid wage growth, and a robust labor market are expected to boost consumer spending and business confidence, GDP growth rates fell sharply from 3.5% in 2022 to 0.5% in 2023, with private consumption stagnating and investment slowing due to high financing costs and uncertain economic conditions.
• Additionally, exports decreased due to lower foreign demand, although the trade balance remained positive.

• The Fed’s expectations surpassed the September call, leading to a shift from a hawkish to a neutral stance on the market. This change occurred just as a dovish Fed and payrolls emerged. There is still perceived value in using equity options to hedge against potential downside risk.
• Despite positive recent news, the Bank of England (BoE) appears eager to implement cuts. This bias is expected to persist in its decision, although there is no indication that a cut is imminent.
• Notable events include the end of the technical UK recession and rate decisions in Australia, Sweden, Malaysia, Brazil, and Peru.

• Some of the Corporate Value Up program’s initial guidelines proposed by the Financial Services Commission (FSC) were announced today.
• Overall, the initial guidelines were disappointing mainly because they lacked concrete figures with regards to tax incentives for companies that make significant improvements to their corporate governance.
• More concrete measures announced today included recommendations for overlapping parent company listing (split listing) and disclosure recommendations for the majority shareholder’s profit transfer to an unlisted private company (tunneling).

• NPS announced today that it will change its core asset allocation method, which aims to increase its purchase of risky assets including stocks and alternative assets. 
• Under the new system, the proportion of risky assets will increase to 65% of the NPS’ entire fund assets and the remaining 35% will be allocated to the safe assets.
• There is an increasing probability that a portion of the 24.6 trillion won (2.3% of AUM) could get allocated to risky assets including domestic equities. 

• Powell had to give a hawkish message and take the signal from three disappointing CPI reports but did so with a ‘dovish’ flavor.
• The Federal Reserve remains well-positioned to cut rates several times this year, especially now that economic momentum is turning.
• The question is if Powell’s statement reliefs markets from the stagflationary data that have come in recently

• Today’s ‘5 Things We Watch’ will center around tonight’s FOMC meeting, which will not be any surprise to markets looking at the interest rate decision itself, but the Fed is in a difficult position in regards to addressing the path for Fed Funds in 2024, and the rhetoric later today will be key.
• Powell promised 3 cuts in December, but market pricing is increasingly leaning towards no action from the Fed, likely forcing him to pivot from his pivot.
• With the Fed’s position as the big brother in central bank space, the choice of rhetoric will not be an easy task, as the ECB / BoE is hopefully waiting for the Fed to lead the cutting cycle to avoid balancing FX risks on top of inflation, and hawkish rhetoric from the Fed – although probably required to get financial conditions back under control again – could put fuel to the fire in Asian FX.

• Financial markets zigzagged mostly as a result of Chair Powell, to a lesser extent the post-meeting statement 
• The current policy debate is centered on the duration of the prevailing pause and the timing of the eventual rate cut 
• The latest market pricing for dialing back policy over the next three meetings is less than or roughly a coin-flip 

• Property restrictions removed in major cities, continuing the gradual process from the last 6-8 months
• A BIG signal to the market and the public with the relaxation of curbs in Beijing 
• China’s factory output continues expansion and travel data positive for consumption

• Chair Powell decided to maintain Fed fund rates at 5.25%-5.5% sticking to the much expected higher for longer strategy given the reverse direction of travel on rates.
• Forget rate cuts. Those hopes are diminishing. US prediction markets are pricing a 40% chance of zero rate cuts this year.
• Nonfarm Payroll numbers tomorrow will hint at the path of interest rate travel for the rest of the year. Continued strength will melt hopes of rate cuts further.

• Every year, for as long as we can remember, we have written a weekly or a monthly note with some variation of the ‘Sell in May’ trope, so we see no reason to break the habit this year.
• The chart (courtesy of Nick Glydon and team at Redburn Atlantic) shows the steady uptrend in searches for the expression every April over the last 14 years and while obviously there is a ‘usage factor’, it is certainly on a lot of traders’ minds at the moment.
• The historic rationale for the expression comes from the leveraged trading end of the spectrum and tended to reflect the fall in speculative activity in the commodities markets over the summer months and while the speculators have moved heavily into other markets since those days, the seasonal drop off in activity as the head traders head to the beach remains a factor – the juniors tend to flatten the books and keep things ticking over.

• In 1Q-24, the economy accumulated ten quarters of expansion, growing 0.2% QoQ. This dynamism was supported by the growth of commercial and service activities.
• According to the National Statistics Institute, in the first quarter of the year, agricultural activities contracted -1.1% QoQ while industrial activities did it by -0.4% QoQ. These setbacks were more than offset by the 0.7% QoQ expansion in commercial and services activities.
• The latter have been supported by a mix of a strong labor market, record remittances to the country, and the increase in the amount allocated to social programs.

• A sharp rise in market rates drove down equity prices in April. The correlated move was consistent with our suggestion before Easter to hedge the downside with equity options.
• We now believe the front end is broadly flat enough, so we have turned neutral on rates relative to the market despite being more hawkish than the consensus on the BoE.
• The potential for market expectations to overshoot again, extending the bearish trends, means hedging with options may still appeal over selling or hoping for recovery.

• A monthly review of how the markets and our themes are currently performing
• Analysing what went wrong and what went right in stocks and sectors
• Highlighting positions added or removed from the thematic investment portfolio

• Hello everyone, and welcome back to our weekly positioning/sentiment overview!Equity sentiment has soured a bit since we last spoke, with broad US traded ETF fund flows sent back into solid negative territory after a stunning start to the year.
• While most of it is due to the tax-season in April, the hawkish repricing of global central banks has also played its part in normalizing the über-bullish sentiment in US equities, with markets now also biting their nails as an ECB June cut is no longer a certainty.
• Chart 1: Rolling monthly US ETF fund flowsAfter a couple of weeks of outflows from XLE, the reflation bet is back on track with around 500 mn.

• The front end has been sufficiently flattened due to continuous rate cuts.
• Despite the potential for limited cuts in the future, rate hikes are not anticipated.
• There’s a possibility that market pricing could exceed expectations before adopting a dovish stance.

• The QRA announcement will be released in a few hours (on Monday) while the issuance details will be released on Wednesday.
• We generally don’t see any reasons to fear the Q2 issuance as a strong tax-season has been confirmed with the TGA standing at 941bn dollars, which is almost 200bn above the target range.

• The TGA also printed above the target range going into Q2, making it unlikely that the US Treasury turns the heat on in the issuance pace. We see a small downgrade of the Q2 number (202bn) as the most likely.

• Energy markets in Europe still fragile. A hot summer and manufacturing rebound could set prices going.
• Manufacturing cycle is improving everywhere but in Germany. Cost-push inflation showing up in drilling now
• This week we want to talk about the ingredients needed for another summer of exploding electricity and gas prices.

• Welcome to this week’s Great Game where we will catch up on events in the Middle East and also cover the Trump trial that’s currently taking all the attention in the US Election race.
• Situation:Israel responded very lightly to the massive Iranian attack on April 13th and we haven’t heard any more from that conflict over the past week.
• As we predicted, Israel’s response was “next to nothing” and clearly acknowledged the de-escalatory nature of Iran’s strike. I know some took offense to that analysis, but it is genuinely our assessment and I think events since has reinforced that view.

• EA inflation unsurprisingly remained at 2.4% y-o-y in April, with a 5bps slowing taking it within 1bps of our forecast. Energy and industrial goods continue to weigh temporarily.
• Services inflation ended a five-month streak at 4%, slowing to 3.7%. That was a tenth higher than we expected again, with the core rate 3bps more resilient at 2.67%.
• The ECB will be reassured by services inflation slowing, easing a June cut, but ongoing upside surprises urge caution, with September’s cut conditional on progress at the Fed.

• Although the fiscal deficit declined to 1.6% of GDP in 2023, markets are pricing in risks arising from President-elect Prabowo’s possible resort to fiscal profligacy in pursuit of 8% growth. 
• More tangibly, with exports declining 7.5%YoY and imports up 1.1%YoY in Q1CY24, the trade surplus shrank to US$7.3bn (from Q1CY23’s US$12.11bn), likely widening the CAD (from Q4CY23’s 0.4% of GDP).   
• With IDR depreciating 9.3%YoY, BI hiked its policy rate by 25bp last week to pre-empt imported inflation. Another rate hike is likely before Oct’24, so we would Underweight Indonesia. 

• Inflation in the first half of April was 4.59% annualized, slightly above our estimate.
• The first fortnight of April typically presents a negative variation due to seasonal electricity subsidies.
• However, this time it was offset by an increase in multiple agricultural products.

• The Banco de la República Colombia’s unsurprising decision to reduce the policy interest rate by 50 basis points to 11.75% aims to bolster economic growth against a backdrop of declining inflation, with the central bank maintaining a careful balance to avoid overheating the economy.
• Updated economic projections suggest a recovery, albeit juxtaposed with a concerning uptick in unemployment rates, presenting a challenge for ongoing monetary policy adjustments.
• External economic pressures, particularly from US policy shifts and global financial market trends, remain pivotal in shaping the future trajectory of Colombia’s monetary policy, emphasizing the importance of adaptive strategies to navigate international uncertainties.

• Overcapacity /Cover Story: How do the West’s concerns about China’s overcapacity stack up?
• Tesla /: Four things to know about Tesla’s advanced self-driving tech in China
• Stocks /: Overseas investment through China’s Stock Connect nearly doubles 2023’s total

• I spent last week in Asia and even though I admittedly like to see my research as edgy and contrarian, I quickly realized that most PMs in the region agreed on my take on the imminent risk of a devaluation of the CNY.
• USD/CNH call options are popular/consensus in the Asian Macro PM space, but interestingly there is no consensus around the contagion from a devaluation of the USDCNY.
• The discussions I had pointed in all directions, meaning that a CNY devaluation holds the potential to turn into a macro earthquake, despite it already being a consensus position.

• Welcome to our weekly Portfolio Watch! We have had a strong week in our portfolio with a USD-reflationary lean, but we are starting to contemplate how to deal with contagion from a continued rise in USD versus Asian FX pairs, especially if the increasing latent risk of a major devaluation of the CNY comes into fruition.
• There is currently no respite for the Asian FX pairs as all major forward looking models point to a reacceleration of US inflation trends from the current plateau around 3.5% YoY.
• We will look at the devaluation risks in detail tomorrow in our weekly “Steno Signals”, but will pinpoint value pockets in markets already today in our Portfolio Watch.

• Copper market may be running ahead of a fundamental story, with extreme tightening in the copper concentrate market
• Chinese demand has stepped back due to surging copper prices, but expected to acclimatize to higher price levels
• Supply side challenges may take a couple more quarters to resolve, leading towards a tighter refined market in the future and potential supply shortfalls by 2030.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Failure to remove policy accommodation after household balance sheets had been repaired after the global financial crisis simply prolonged the secular stagnation thesis that had been embraced by bond investors.
• The current estimate of the real neutral federal funds rate is too low relative to potential GDP growth, presenting an opportunity for bond investors to jettison their secular stagnation thesis.
• A structurally higher neutral Fed policy rate will impact short-term funding markets, while equity investors will need to place greater focus on long-term corporate profit growth for their returns. 

• Bilal, CEO and head of research at Macro Hive, shares his background and career journey in finance
• Raised in a working-class immigrant family in Oxford, excelled academically and went to Cambridge to study economics
• Started career in finance at JP Morgan in FX research, later moved to Deutsche bank where he specialized in building models and smart beta strategies in currency markets

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The past week saw insights on Bank Central Asia (BBCA IJ), BFI Finance Indonesia (BFIN IJ),Elite Commercial REIT (ELITE SP) and OceanaGold IPO in the Philippines. 
• There were also macro insights on Indonesia and Singapore plus a sector insight on Thai banks and an index rebalancing from Brian Freitas on the LQ45 in Indonesia. 
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia

• The short term is suddenly looking bullish for iron ore, as rumors abound that tier-1 cities in China may remove home-buying restrictions in May, and auto stimulus measures were announced. 
• Cities like Chengdu and Nanjing have already announced measures to make home-buying more attractive, such as removing purchase qualifications and pilot programs for old-for-new home housing. 
• We like 62% Fe and see it trade up to its upper limit of 130 USD/ton (vs. current 117 USD/ton). On equities, we like Vale (VALE US) .

• The overall outcome of this week’s local elections and by-election may not be as bad for the Conservatives as expected.
• Rishi Sunak may be increasingly considering a snap general election.
• This consideration comes as challenges continue to mount for the Conservatives.

• Going forward, Energy could face some selling flows from CTAs according to the latest CTA flow update by UBSS

• UBS ‘Contrarian’ trades: bullish Agriculturals and LME Lead, bearish Energy, Cocoa, Lean Hogs and Platinum

• UBS ‘Go with momentum’ trades: bullish Zinc, Aluminium, bearish Cotton, Sugar and Palladium

• Vietnam’s CPI inflation increased by 0.4pp, reaching 4.4% in April 2024, the highest since January 2023.
• The inflation rate is 1.11 percentage points above the one-year average.
• This indicates a renewed acceleration of inflationary pressures.

• The U.S. economy is undergoing a mid-cycle expansion, which is characterized by a combination of fundamental and technical momentum.
• As long as the economy stays resilient, earnings estimates rise and inflation doesn’t accelerate, stock prices can advance without rate cuts.
• The key tail-risk to the benign scenario is a disorderly Asian competitive currency devaluation that sinks emerging markets and sparks a risk-off response.

• Welcome to our now-cast series on EUR-flation.
• We have been banging the drum on dovish surprises in the Euro area for a while, but there are signs of upside risks in April inflation numbers from our price observations made through the month.
• Especially German inflation could surprise on the sticky/high side of consensus.Our overall now-cast projections lean around 0.1%-points above consensus for April.

• Indonesia raises interest rates unexpectedly, citing currency weakness.
• Japan faces continued yen depreciation amid low interest rates.
• China’s economic indicators show mixed signals, with GDP growth but weak money supply growth.

• This week’s data releases have increased hawkish pressures, despite disappointing US PMI results. High inflation is impacting real demand, with delayed Fed cuts leading to speculation of BOJ intervention and a rate hike in Indonesia.
• The Federal Reserve is expected to maintain rates in its upcoming meeting, with indications that the next move will likely be a rate cut. However, it is deemed appropriate to wait longer before implementing this.
• Consensus expectations are for Euro area inflation to remain steady at 2.4% in the April flash.

• We’ll start by addressing the title of this month’s Ifo nugget.
• We note from our two main models for predicting demand driven price pressures that wage pressures are continuing to fade and last month’s uptick in the employment barometer has faded again and we are still looking at wages and salaries in the pre Covid range and the other side of the Summer.
• The same is likely true for Core CPI in Germany.

• The BOJ has maintained its policy rate at 0.0-0.1%, consistent with market expectations, reflecting ongoing economic recovery with moderate inflation, set against a backdrop of global economic uncertainty.
• Future interest rate decisions will be influenced by global economic conditions, domestic economic performance, inflation trends, and financial market stability, with a vigilant approach towards any necessary adjustments to maintain economic growth and price stability.
• The central bank projects that the economy will continue to grow modestly above its potential. It expects CPI inflation to stabilize around 2% by fiscal 2025 and 2026, supported by government measures and favourable financial conditions.

• On 6 November 2023, the Korean government announced that it will temporarily ban short selling stocks until end of June 2024. 
• On 25 April 2024, the FSS unveiled for the first time its plan to build a computer system to prevent naked short selling called NSDS (Naked Short Selling Detection System).
• There is a high probability that the the temporary ban on short selling which currently lasts until end of June 2024, could be extended further to 2Q 2025.

• Welcome to our weekly ‘5 Things We Watch’, where we as always zoom in on 5 of the things we look out for in global macro.
• The battleground in macro for Q2/Q3 looks to be found in Asian FX, where the USD wrecking ball has increased risk of policy action in both China and Japan, which would have significant implications for global assets.
• This week we are watching out for the following 5 topics within global macro

• China Enterprise Index (HSCEI) is now the top performing index in Asia on a USD basis
• HSCEI also trades at the lowest P/E multiple in the Asia
• High probability of divergence as US and Europe markets turn down

• Gold prices touched a record high in April despite headwinds due to robust demand from Chinese speculators.
• Asian Gold ETFs saw a net inflow of funds in April, while American and European Gold ETFs witnessed net outflows.
• Demand for gold continues to be driven by central banks of emerging markets like China, India, and Türkiye.

• QE or not QE – that is the question for China.
• Gold’s rise postponed by margin increases from major trading centres?
• US markets looking increasingly risky as utilities rise in absolute and relative terms.

• Insurance / In Depth: China’s insurers scale back high-yield investment
• Laura M. Cha /In depth: Regulatory titan Laura Cha takes final bow
• China-EU /Sino-EU ties could be strengthened by food trade, Europe’s agriculture chief says

• Despite China’s increasing efforts to become an artificial intelligence superpower, there is still a huge funding gap with the U.S. in the realm of AI-generated content (AIGC), a major Chinese venture capital investor said.
• Chinese companies developing AIGC solutions — which use AI to produce content based on user inputs such as questions and keywords — raised a total of around $1.3 billion last year, compared with $23 billion raised by their American counterparts, Zhou Zhifeng, a partner at Qiming Venture Partners, said at an industry event Thursday.
• That $1.3 billion of capital was almost all invested in developers of foundational large language models (LLMs) in China, while foundational LLM developers bagged nearly 87% of the $23 billion in the U.S., Zhou said.

• Lower US GDP growth and higher inflation have revealed that sentiment is turning negative due to the latter.
• China is stuck between a rock and a hard place, which makes expecting a short-term devaluation of the Chinese Yuan a bit too easy.
• Will the labor market open the door to a recession? And what’s up with gold and Bitcoin lately?

• Comments from BoE MPC members have roiled market pricing recently amid perceived contradictions between each other and the hawkish flow of macro data.
• Members make different risk assessments that vary the evidence required to cut. Shocks this month are insufficient to break the dovish belief in disinflationary progress.
• Further resilience would encourage MPC members to delay their dovish hopes, just as it did with the FOMC. An unlikely hasty cut risks repeating the BoE’s 2005 policy error.