Greetings. 

When I pictured writing the 200th edition of Steno Signals, I didn’t quite imagine doing it from a sickbed. Thankfully, I’m not in hospital anymore —but this bout of mononucleosis is proving to be a tenacious little gremlin. Honestly, I’ve never been this ill in my life. Not even close.

Still, flat on my back with nothing but charts and Bloomberg for company, I’ve been watching the lead-up to the US-China trade negotiations. And strangely enough, I’m getting the vibe that we’re inching towards a resolution. Trump is in full “eager beaver” mode—probably helped by the fact that the legal foundation for his tariffs is looking increasingly wobbly. He wants a win. He needs a win. And a handshake with Beijing might just be it.

Meanwhile, in one of this week’s more surreal developments, Trump and Elon Musk have found common ground again—this time yelling in unison about the LA riots. It’s like a buddy cop movie no one asked for. But hey, it suggests that Trump is a little less chaotic than he was just a few months ago. Baby steps.

The real story brewing this week, though, is inflation—it’s ticking up. Chinese inflation came in hotter than expected, and there has been a 100% hit ratio of betting on the same surprise direction in the US CPI (higher USD inflation Wednesday), which combined with increasing freight rates pose for an inflationary summer. So the key question is: will growth and liquidity rise along with prices? Most likely yes. For more on that, my colleague Oskar dives deeper into the data.

Chart 1a: 100% hit ratio of betting on US CPI to follow the same direction as China CPI