“Embedded in today’s relative strength are tomorrow’s narratives.”
- Jeff deGraaf
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After a very quiet session for stocks yesterday, which nearly fully ignored any fallout from further sanctions (e.g. EU 30%) by US President Trump over the weekend, it should be getting a bit more exciting starting today…
Already pre-market we will witness the release of Q2 earnings from banking giants JPMorgan Chase and Bank of New York Mellon, plus also the number from asset manager behemoth BlackRock. Will Liberation Day effects finally shine through in earnings? Maybe not so much in banks yet, but other sectors could show further signs of slowdown as earning season kicks off.
Then, US inflation (CPI) number at 14:30 CET - a strongly lagging number that never should have mattered, but did a lot so during the 2022-2023 period and now may be coming back in vogue has investors looks for signs of inflationary impacts from tariffs. A slight increase in CPI is widely expected - it would probably need a nearly 3% y-o-y reading to derail markets:
Also, “crypto week” is underway, a term dubbed by the press as US congress is expected to pass several crypto-related bills this week, not least the GENIUS act (Guiding and Establishing National Innovation for US Stablecoins act - I know, some people should be locked away for life for coming up with these kind of acronyms).
Speaking of acronyms (and being locked away), have I told you yet about my CUPCAKE portfolio? No? Well, you’ll need to drop me a line to find out more:
Back to yesterday’s session quickly, two highlight two items: one well-advertised and one still a bit under the radar but with possible high impact on global markets…
First, widely discussed already but still worthwhile mentioning is of course the timely breakout of Bitcoin during (US) crypto week, pressing to new all-time highs:
But BTC was not the only crypto moving higher, Ethereum also reached new cycle highs (if not yet ATHs though):
The second, less-well documented issue is the rise of Japanese inflation expectations. Take the following chart for example: it shows the expected 1-year forward rate for for the Japanese Yen in 15-years time:
Seems a bit esoteric and far-fetched? No, it is where the trend is best visualized. Turning to Japanese bond yields (JGB), remember that ‘steep’ increase in the 10-year yield, which eventually led to a 12% one-day drop in the Nikkei? Well, here’s the chart of the 10-year yield updated ….
Anyway, enough thoughts shared for today - as always there’s more things to write about than time at hand… but in doubt, just follow that trend ;-)
Chart of the Day is back tomorrow!
