Daily Post

The unusual public discourse around Fed Chair Powell’s potential dismissal continues. While an actual layoff remains highly unlikely, the groundwork is being laid for an increasingly politicized FOMC. Position accordingly.

US inflation continues to surprise on the low side, yet the message from both investment banks and central banks remains: “it will arrive soon.” Will this persistent bias in inflation forecasting continue to impact markets?

The fear of rising inflation is already embedded in USD market expectations, and the Fed has effectively promised that the impact of tariff-flation will start showing up now. This leaves us with a skewed outcome space going forward.

While the worst is probably behind us in terms of tariff announcements, we’re still patiently waiting for the deals that were all but pre-promised by Howard Lutnick and others in the administration. So—90 trade deals in 90 days—where are they?

China is mulling new stimulus — exactly as expected once the USD weakened enough and the trade war found an equilibrium. This is going to underpin an already procyclical development.

Tariffs on copper, semiconductors, and pharma are now finally (semi)-live, and we should expect seven country-specific trade updates later today as the “deadline” looms. Meanwhile, the RBNZ will keep easing.

As annoying as it may be, the calendar goalpost for tariffs has been moved once again. For Japan and South Korea in particular, there’s still a window of opportunity in the coming weeks. The wall of worry has been postponed—AGAIN.

Is the ADP a decent indicator of the labour market, and could the weakness be explained away by AI? Apparently markets now celebrate a job report that is weak enough to speculate.

Even if this is still a slightly wobbly economic comeback, we’re seeing increasingly procyclical patterns in business surveys. Prices for both inputs and outputs are accelerating, while overall activity is gradually rebounding. Stimulating into this backdrop is, ahem, problematic.

Multiple forward-looking surveys have been signaling a rebound in the U.S. economy since May, but the question now is whether Trump is starting to jeopardize that comeback. Our best guess? Not yet.

The China trade story is turning from risk to catalyst, fueling US and Chinese equities alike. With macro surprises aligning and tariff revenue climbing despite lower rates, the reflation narrative is gathering steam—just as the geopolitical fog begins to lift.

While debasement and weaker growth risks are largely out of the equation for the USD, we likely need a trigger before the greenback gains momentum, as the USD dislikes the dovish momentum within the Fed.

Equities are soaring toward all-time highs, and with tensions in the Strait of Hormuz now old news, the spotlight is shifting to whether the Fed can be politicized into cutting rates over the coming months—provided inflation cooperates.

With most geopolitical and economic obstacles out of the way, we are likely set for a melt-up across cyclical assets over the summer – and fund managers are still yet to participate.

Geopolitical fog may be clouding the headlines, but under the surface, U.S. growth expectations are quietly setting up for a summer surprise. With dollar sentiment flipping, CTAs reloading on risk, and global positioning still skewed, it’s not too late to lean into the next leg up.

The Fed delivered a noncommittal message, but beneath the surface, a new internal divide is forming. With reflation risks quietly rising and the USD bouncing off oversold levels, we think U.S. assets are in for another leg of outperformance—especially if a weekend strike on Iran seals the geopolitical overhang.

While markets are currently panicking, fearing U.S. involvement in Iran, history suggests they tend to rally when America “seals the deal” in the Middle East. With fund managers sidelined after a tough year, the stars may be aligning for a continued equity rally if escalation is short and decisive.

As geopolitical tensions escalate and macro data surprises to the upside, markets find themselves caught between conflicting signals. This week’s focus is on whether Powell acknowledges the disinflation narrative, how BoJ tweaks are reshaping FX trades, and why the energy long is no longer a one-way street.

Geopolitical risk is rising under Trump despite promises to the contrary, and combined with building reflationary pressures, it sets the stage for higher oil prices this summer. With the reflation theme still largely underpriced, we think now is a good time to lean into risk and accumulate exposure.

A US-China trade framework is (mostly) in place, but markets aren’t fully buying the narrative. Meanwhile, CPI looms, bond auctions approach, and both the UK and EU continue to underperform the US macro-wise.

Markets are treading water ahead of a potential US-China breakthrough, but reflation continues to build beneath the surface as we move closer to summer. This week’s bond auctions and CPI/PPI data offer a prime opportunity for bonds to set the direction higher, even with energy and shelter likely delivering one final soft CPI print before broader price pressures return.

The ongoing vendetta between Trump and Elon will likely not alter the macro picture a whole lot, but instead serves as a clear signal that reciprocal tariffs are a policy for the past, and that the less challenged sectorial tariffs is the new black.

Markets have stopped punishing deficits, even as auctions stumble. With fiscal fears fading fast, the focus has flipped to growth—and risk assets are responding. Metals are ripping, the USD setup is shifting, and soft data might not be soft enough to keep the cycle crowd calm.

Steel tariffs might make headlines, but markets are focused elsewhere. With services stabilizing, trade flows rebounding, and copper breaking out, the real story is a quiet but powerful reflation pulse building beneath the surface—just as fund managers remain underweight risk.

Markets opened the week on shaky footing, but beneath the surface, global trade is quietly improving, freight rates are screaming reflation, and macro bears may soon run out of ammo. With ISM Services, the ECB, and NFP on deck, the next few days could reshape sentiment—and cement a summer of upside.

The overnight court ruling disapproving Trump-era tariffs likely marks the end of the trade war, meaning assets need to reprice materially if no escalation follows. But if we know Trump, he’ll swiftly shift the narrative to the next battleground.

The fiscal relief seen yesterday is gone in an instant after another semi-nasty JPY Bond action. Meanwhile, growth and inflation are accelerating in tandem, bond yields are on the move, and CTAs are leaning the wrong way across sectors, rates, and FX.

Fiscal worries remain front and center—even as governments scramble to shift issuance down the curve. With inflation surprises rising and shipping data still stalled, risk assets need either a policy-driven jolt or an upside shock in growth to break out of their flatlining range.

While equities and bonds usually move in opposite directions, we may now be in a regime where both rise together. Fiscal concerns are driving bond yields higher—but with U.S. corporates sitting on record cash balances, broad equities may be less sensitive to yields than in prior cycles.

Long-end yields are breaking out, crypto proxies are flying, and copper is ripping higher. With PMIs turning and fiscal spigots open, risk assets are back on the menu—even as hedge funds cling to their bearish playbooks.