The Day Today 11th May 2022

  • Biden: “I want every American to know that I am taking inflation very seriously and it is my top domestic priority”.
  • Biden: “There are things we can do and we can address. That starts with the Federal Reserve, which plays a primary role in fighting inflation… I agree with what chairman Powell said last week, that the number one threat [to] the strength that we build is inflation. So the Fed should do its job and it will do its job. I’m convinced of that”.
  • Biden could drop some Trump tariffs on Chinese imports.
  • Fed Waller: “We know what happened for the Fed not taking the job seriously on inflation in the 1970s, and we ain’t gonna let that happen… The economy is doing so well, this is the time to hit it if you think there’s going to be any kind of negative reaction, because the economy can take it”.
  • Chinese inflation was higher than expected in the form of PPI rising 8.0% in April vs f/c 7.8%, lockdowns hurt supply chains as food was stockpiled.
  • China CPI was 2.1% against 1.9% expected and 1.5% prior.
  • Coinbase misses earnings estimates as trading volume falls from Q4.
  • Toyota expects net income to fall by 20% due to higher costs.
  • Cathie Wood: global economy already in recession and there’s volatility because markets “seem to be calling into question the Fed’s strategy”.
  • EU to loosen environmental regulations to fast-track wind and solar energy projects.
  • NIESR says BOE need to hike to 2.5% to bring inflation under control.
  • US gun homicides hit highest level in 25 years in 2020 with 19,000 deaths excluding suicides.

US equity markets eked out meagre gains by the Tuesday close, S&P 500 up 0.2% and Nasdaq 1%. Asian equity markets also rose, Chinese equities rallied as Covid cases declined.

The Week That Will Be
Inflation, Chinese numbers Wednesday, US inflation hardly matters to the Fed in the short term; UK GDP, the number on Thursday isn’t of much concern its growth in the next quarter that counts seeing as the world has changed so much in three months; The ECB, hawks completed their ascendency with Schnabel converting to a July hike; UK Politics, Boris will probably be breathing a sigh of relief now that Keir Starmer is under the lockdown breach spotlight, but the reality is it will pressure Boris more if Starmer has to go. The election results were the thousandth nail in his coffin anyway; Volatility, US stock rollercoaster will continue and QT risks market dysfunction as well, red flag upon red flag.

On this day in 2010 David Cameron became the British Prime Minister as Conservatives and Liberal Democrats formed the country’s first coalition government since the Second World War.

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