The Q - Daily Edition - 12/06/2026
Oops!... I Did It Again
"Anyone can make a mistake, but only a fool perseveres in error."
— Cicero
And then they say that rising a key monetary policy rate does little to stem of higher energy prices resulting from a war … HA! Wrong! Look no further than yesterday, where the courageous European Central Bank (aka BuBa) increased their Deposit Facility rate by 25bp to 2.25% … et voila … only a few hours later the US announced (yet again) the end of the Iran conflict.
In any case, and without the intention of turning this fine newsletter into a meme-parody-paper (MPP), what a week it has been!!
And all this excitement for nada really, as we are quite precisely where we had started the week:
Of course, zooming out on the same chart of the S&P 500 to get a daily candle view, we note that we are still within this small correction:
However, the bounce on the 50-day moving average (greenishl ine) yesterday, is very encouraging and a close only a few basis points higher today would increase our confidence that the worst may be over.
So, is there any difference between this (one-sided) deal announcement as compared to all the other previous (one-sided) ones? Well, Axios reported that they think this one may indeed be different from the others, with “sources” saying that “gaps have been narrowed” on key issues like unfreezing Iranian assets, the process for reopening the Strait of Hormuz, and how negotiations surrounding Iran’s nuclear program would be conducted.
I think that could be true, given the reaction in the price of crude oil futures (Brent):
Asian markets this morning are also trying to believe that this one is the one (still referring to the US/Iran deal):
We also had US PPI numbers, which were as expected at the upper end of expectations, i.e.g flagging inflationary risks:
However, bonds thought it is safe to ignore those numbers though, but rather concentrated on the supposedly deflationary impact from an end of the war, which is of course, pure fantasy.
(oh, another meme gif - this is really turning into a MPP!)
Here’s the chart of the US10-year yield, where 4.43% is the pivot-point to watch:
Looking the iShares 20+ Year Treasury Bond ETF as a proxy for bond prices, a tactical long trend may offer itself here:
As mentioned further up, the ECB hiked their key policy rate yesterday, god and Lagarde knows why …
But at least that gives me the opportunity to update my ECB “track record” chart, which could easily be named “The Library of Policy Mistakes”:
SpaceX starts trading today … watching the financial news press, nothing else seems to matter today. So be it.
Have a great weekend and …
André
Everything in this document is for educational purposes only (FEPO)
Nothing in this document should be considered investment advice
Investing real money can be costly; don’t do stupid shit
Leave politics at the door—markets don’t care.
Past performance is hopefully no indication of future performance
The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG