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Futures Rise Ahead Of Potential Valentine’s Day CPI Shocker

Futures Rise Ahead Of Potential Valentine’s Day CPI Shocker

Happy Valentine’s day, which may end up being either a massacre or a happy ending,…



Futures Rise Ahead Of Potential Valentine's Day CPI Shocker

Happy Valentine's day, which may end up being either a massacre or a happy ending, depending on what CPI numbers the BLS releases at 830am.

US stock futures were subdued in early Tuesday trading, creeping near session highs after moving higher in a narrow range as investors held off from making big bets ahead of inflation figures that will provide clues on the Federal Reserve’s policy outlook. Nasdaq 100 future rose 0.5% while S&P 500 futures edged 0.3% higher by 7:30 a.m. ET. Both underlying indexes surged more than 1% on Monday in the run up to the inflation data. Europe's Stoxx50 advanced 0.5% in early European session. The yen jumped after Japan PM Kishida's government confirmed that Kazuo Ueda would lead the BOJ, the pound climbed after UK jobs data and Treasuries rose a second day. Oil prices fell on a report that the Biden administration plans to sell more crude oil from the Strategic Petroleum Reserve. The dollar dropped and gold rose.

Among notable moves in premarket trading, ContextLogic surged as much as 24%, set to extend a jump on Monday following supportive comments from Citron Research about the ecommerce company. Palantir Technologies Inc. jumped after the data analysis company said it expects 2023 to be its first-ever profitable year. While analysts were positive about the profitability trend, they also noted the slowing pace of revenue growth. Here are some other notable premarket movers:

  • Avis Budget shares gained as much as 3.3% in US premarket trading, after the vehicle rental company’s earnings exceeded analyst estimates, showing that demand for both commercial and leisure travel is holding up. Morgan Stanley analysts also pointed to a boost from lower vehicle depreciation costs.
  • SolarEdge shares fall as much as 5.7% in US premarket trading, with analysts pointing to the solar equipment maker’s comments about a more cautious outlook for its US business. They expect the backlog of shipments to Europe to offset softening domestic demand.
  • Fusion Pharmaceuticals climbed 39% in extended trading after the oncology company said it acquired a new drug application for an ongoing Phase 2 clinical trial evaluating 225Ac-PSMA I&T, which has the potential to treat prostate cancers.
  • SkyWater Technology Inc. gained 9% in extended trading after the semiconductor manufacturer reported a narrower quarterly adjusted loss per share than analysts anticipated and revenue that topped expectations.
  • Amkor Technology shares declined in extended trading on Monday after the semiconductor manufacturing company reported its fourth-quarter results and gave a forecast. The company reported earnings of 67 cents per share, compared with the consensus estimate of 70 cents.

After sinking into a bear market last year, US stocks have rallied sharply in 2023 as investors bet that a cooling in inflation would prompt the Fed to slow the pace of rate hikes. Still, gains have wavered in recent days and data due later today is expected to show costs rising briskly from the prior month, suggesting the path to easing price pressures remains bumpy.  That's why, as discussed yesterday (see full preview here), all eyes will be on the crucial US inflation data at 8:30 am. Consumer prices probably rose 0.5%, the most in three months, while core prices may have advanced 0.4%. The annual rate may have slowed for a seventh month to 6.2%. Here is a quick recap of what to expect courtesy of DB's Jim Reid:

What better to get you in the mood for love than learning how quickly prices are rising in today's highly anticipated US CPI print. Everything in the last few weeks has pointed to near-term upward pressure on US inflation in the early part of this year even if it eventually falls more sharply later in the year. Will markets and the Fed look through this if it happens? That's the big question. The good news is that the market has been shaken out of its immaculate disinflation view in the last 7-8 business days with 10yr UST, Terminal (July) and Dec '23 Fed Futures contracts up c.36bps, c.40bps and c.60bps, respectively, from its intra-day lows on February 2nd after what was interpreted as a dovish FOMC. Since then, we've had a very strong payrolls, the highest used car price growth for 14 months, and revisions to core CPI that showed a less aggressive disinflation path than originally reported. On the latter see more in my CoTD yesterday (link here) but 3 month annualised core CPI is now running at 4.25% rather than the 3.14% the market had imagined before Friday's revisions.

Today's number is also the first to see new expenditure weights that lifts OER's importance. Given OER is expected to stay strong in the near-term before falling later in the year, this could push near-term inflation higher along with a few other things highlighted in the "The rise before the fall" chartbook from our economists last week. However, the market should be better prepared for this now that it's more widely recognised.

In other words, expect fireworks in markets after that report as investors immediately asses what it means for the Fed’s future policy path. The stakes are even higher as, for the first time in a long time, stock and bond markets are flashing divergent signals on the economy and future Federal Reserve policy: bond markets have been cautious while stocks have been less worried. Today’s report will go a long way in determining which one is right. In addition to the inflation data, the US also reports real wages data for January. There’s also a run of Fed speakers to keep traders busy after the release, with Thomas Barkin, Lorie Logan, Patrick Harker and John Williams all appearing (more on the US calendar below).

“It feels like markets have been rather listless this week so far as we await the CPI number,” said James Athey, investment director at Abrdn. “Certainly in recent days the whisper has been getting higher and it’s rational to think that the reaction to a miss will be bigger – particularly given the recent rise in yields.”

Late on Monday, we got confirmation to another long-running rumor, namely that Joe Biden has decided to name Federal Reserve Vice Chair Lael Brainard as his top economic adviser, with an announcement coming as soon as Tuesday, people familiar with the matter said. The president’s selection of Brainard to replace outgoing NEC Director Brian Deese places her alongside another high-profile former Fed official, Treasury Secretary Janet Yellen, as a crucial player on economic policy amid the continuing battle with inflation and as Biden prepares for a likely reelection campaign.

Meanwhile, Japanese Prime Minister Fumio Kishida’s government nominated Kazuo Ueda to helm the Bank of Japan on Tuesday. Eisuke Sakakibara, nicknamed “Mr. Yen” for his ability to influence the currency during his tenure as Japan’s vice finance minister from 1997-1999,  says that may pave the way for a rate hike by the fourth quarter.

The first quarterly decline in corporate earnings since 2020 has also hit risk demand this month. JPMorgan strategist Marko Kolanovic said on Monday he was “turning more defensive” on stocks as they don’t yet reflect a recession. A Bank of America survey also showed most investors still believe equities are seeing a bear market rally even as they turn more optimistic about global growth.

European stocks rose ahead of the CPI data. The Stoxx 600 added 0.5%, led by outperformance in the telecom, utility and financial service sectors. Here are the most notable European movers:

  • EasyJet rose as much as 4.5% in early trading after being raised to buy from sell at Deutsche Bank as broker notes an improvement in the UK’s economic outlook
  • Coca-Cola HBC shares jump as much as 4.5%, the most since Aug. 11, after reporting full-year net sales that beat analyst estimates
  • Vodafone shares rose as much as 4.1% after Liberty Global’s move to acquire a 4.9% stake ramps up pressure for the company to appoint a permanent CEO and deliver a business revival
  • Brenntag shares rise as much as 2.8% after activist investor Engine Capital took a 1% stake in the German chemicals distributor and urged it to prioritize the separation of its specialties unit
  • Norma shares surge as much as 20%, the most on record, after Bloomberg reported that the German maker of hose and pipe components has had several takeover approaches recently
  • Flutter shares rise as much as 4.1% before paring gains after the gambling company said it will consult shareholders on a secondary share listing in the US
  • Michelin falls as much as 2.5% after the French tiremaker provided what Deutsche Bank calls “cautious” guidance
  • Delivery Hero shares fall as much as 6.6% after the German food delivery company said it will issue about €1 billion in convertible bonds to buy back securities due in 2024 and 2025
  • Norsk Hydro slumps as much as 4.6% in Oslo after the aluminum producer reported worse- than-expected adjusted Ebitda for the fourth quarter
  • Rockwool drops 2.5% after guidance for 2023 was much weaker than expected, with volume and price outlook “blurry,” Handelsbanken writes in a note, downgrading its three-month view to hold
  • Orkla falls as much as 7.7%, the most since October, after the Norwegian retail group’s 4Q results were held back by weakness in the firm’s Branded Consumer Goods (BCG) division
  • MTU Aero shares fell as much as 3.7%, after the German aerospace company reported FY22 results which were “a little light on sales”

Earlier in the session, Asian stocks also advanced, rebounding from the lowest in about a month, as large tech shares rose ahead of crucial US inflation figures. The MSCI Asia Pacific Index climbed as much as 0.7%, with TSMC and SK Hynix among the biggest drivers. South Korea and Taiwan helped lead the charge while equities in Japan held gains as the government formally nominated Kazuo Ueda as Bank of Japan governor. Benchmarks in India also rallied close to the levels seen before the selloff in Adani Group stocks. Risk appetite in Asia was partly helped by a Federal Reserve survey showing US wage growth expectations slipped in January. The MSCI Asian stock benchmark had dipped as a months-long rebound on China reopening hopes peaked in late January and as investors tried to gauge how high US interest rates will go.

“Inflation peaked already but it’s likely to stay sticky, more sticky than perhaps what the market is pricing,” Thomas Poullaouec, head of APAC multi-asset solutions at T. Rowe Price, said in an interview with Bloomberg TV. “That’s why the market is getting disappointed when you see a more hawkish tone from central bankers.” US consumer-price data due later may provide the next clues on the Fed’s policy. Traders also continue to monitor the latest corporate earnings reports as well as developments in US and China relations following the recent balloon incident. 

Japanese stocks advanced, following US peers higher, as investors await US CPI data later Tuesday for signs that inflation may be cooling and for clues on the direction of monetary policy.  The Topix Index rose 0.8% to 1,993.09 as of market close Tokyo time, while the Nikkei advanced 0.6% to 27,602.77. Keyence Corp. contributed the most to the Topix Index gain, increasing 1.3%. Out of 2,163 stocks in the index, 1,667 rose and 420 fell, while 76 were unchanged. “Japanese stocks rose with the trend in US equities yesterday ahead of CPI data release,” said Hideyuki Suzuki, general manager at SBI Securities. “Investors are still cautious as the market might see volatility if the numbers are higher than expected.”

Australian stocks rose, the S&P/ASX 200 index higher 0.2% to close at 7,430.90, bolstered by gains in health stocks and banks.  Investors await US inflation data after a drop in wage-growth expectations eased some of the concern over rising prices. In New Zealand, the S&P/NZX 50 index was little changed at 12,074.47

India’s benchmark stocks gauge rallied back to levels seen before a selloff in shares related to Adani Group, as investors remain bullish about earnings-growth potential in local companies despite worries over rising costs. The S&P BSE Sensex rose 1% to 61,032.26 in Mumbai, its highest level since Jan. 18, while the NSE Nifty 50 Index advanced 0.9%. The Sensex has now recouped the losses since the Adani-connected selloff began on Jan. 25, while the Nifty is about 1% away. Recent gains in the broader market are driven by rallies in technology and consumer-staples companies, most having reported better-than-expected earnings for the latest quarter. Tobacco and fast-moving consumer-goods maker ITC and software exporter Infosys are among biggest contributors to Sensex’s recovery, while banks have been the worst performers. Most Asian and European markets advanced on Tuesday ahead of crucial US inflation figures. Foreign investors have continued to take money out of Indian equities this month, though the pace of selling has moderated, with global funds turning buyers for three out of eight sessions. Adani Enterprises Ltd., the flagship firm of the diversified group, gained after reporting a profit for the December quarter. Most of the conglomerate’s other listed shares continued to trade lower. Reliance Industries contributed the most to the Sensex’s gain on Tuesday, increasing 2.4%. Out of 30 shares in the Sensex index, 19 rose and 11 fell.

In FX, the Bloomberg Dollar Spot Index declined 0.2%, adding to Monday’s 0.2% fall. The greenback traded mixed against its Group-of-10 peers, where the Swedish krona was the best performer followed by the British pound and the New Zealand dollar was the worst.

  • The euro rose a second day to a high of $1.0767 but remained within recent ranges. The German yield curve bull-flattened a tad while the Italian curve twist- steepened amid positioning ahead of US inflation figures
  • The pound advanced 0.5% to $1.2204, its highest in more than a week, following UK labor data that showed wages rose quicker than expected by economists at the end of 2022. UK average earnings excluding bonuses were 6.7% higher in the three months through December from the previous year. Economists surveyed by Bloomberg are anticipating the headline figure slowing to 6.2%
  • The yen steadied, after paring an earlier advance. Japan’s bond futures gained following the government’s nomination of Kazuo Ueda to helm the BOJ on Tuesday in a move likely to pave the way for a gradual paring back of the central bank’s full-bore stimulus
  • New Zealand’s dollar slumped and the nation’s bond yields declined as the nation’s falling inflation expectations prompted traders to pare rate-hike bets. The RBNZ’s two-year inflation expectations eased to 3.3% in 1Q, down from 3.62% in the three months to December, which was the highest since 1991

In rates, treasuries edged higher across the curve along with stocks as investors awaited January CPI report, with gains led by front-end of the curve as spreads unwind portion of Monday’s sharp flattening move. US yields richer by ~2bp across front-end of the curve with 2s10s, 5s30s spreads both steeper by ~1.5bp on the day; 10-year yields around 3.68%, outperforming bunds and gilts by 0.5bp and 4bp. Gilts underperform and bear-flatten following UK labor data that showed wages rose quicker than expected by economists at the end of 2022. US session also includes several Fed speakers.  Fed-dated OIS currently price in around 28bp of rate hikes for the March meeting and a policy peak of approximately 5.20% for the July meeting. CPI data is expected to show price pressures building because of an upswing in activity; however late options activity Monday showed a large hedge on US 5-year yields dropping to around 3.70% by Wednesday’s close.

In commodities, crude futures decline with WTI down 1.5% to trade near $78.90. Spot gold rises roughly 0.4% to trade near $1,861.

Bitcoin is firmer on the session and at the top end of USD 21.61-21.88k boundaries which are by extension well within the week's existing parameters.

Looking to the day ahead now, the main highlight will be the US CPI release for January. Other data releases include UK unemployment for December. From central banks, we’ll hear from the Fed’s Barkin, Logan, Harker and Williams, as well as the ECB’s Makhlouf. Lastly, earnings releases include Coca-Cola, Airbnb and Marriott.

Market Snapshot

  • S&P 500 futures little changed at 4,148.50
  • MXAP up 0.6% to 166.21
  • MXAPJ up 0.3% to 541.87
  • Nikkei up 0.6% to 27,602.77
  • Topix up 0.8% to 1,993.09
  • Hang Seng Index down 0.2% to 21,113.76
  • Shanghai Composite up 0.3% to 3,293.28
  • Sensex up 1.1% to 61,069.75
  • Australia S&P/ASX 200 up 0.2% to 7,430.86
  • Kospi up 0.5% to 2,465.64
  • STOXX Europe 600 up 0.4% to 463.77
  • German 10Y yield little changed at 2.35%
  • Euro up 0.3% to $1.0760
  • Brent Futures down 0.7% to $86.01/bbl
  • Gold spot up 0.5% to $1,862.42
  • U.S. Dollar Index down 0.39% to 102.95

Top Overnight News

  1. The world is counting on an economic bounceback from China to power global growth and help keep recession at bay. Don’t bank on it. China’s recovery after years of Covid-19 lockdowns will likely look a lot different from previous ones. And for many parts of the world, economists warn, it could be less potent than governments and businesses hope. WSJ
  2. Kazuo Ueda was nominated to head the BOJ, as expected, in a move that'll probably pave the way for a gradual paring back of its full-bore stimulus. A rate hike may come by the fourth quarter, according to Eisuke Sakakibara, aka "Mr. Yen," who sees the currency strengthening to about 120 per dollar this year. JGB traders price in an end to negative rates around mid-year. BBG
  3. UK posted mixed compensation performance in Dec, w/total average weekly earnings climbing 5.9% (down from +6.5% in Nov and below the St’s +6.2% forecast) although ex-bonus compensation jumped 6.7% (up from +6.5% in Nov and ahead of the St’s +6.5% forecast). RTRS
  4. CPI: street looking for headline YoY print of 6.2% (vs 6.5% prior, GIR +6.39%) and headline MoM .5% (vs .1% prior, GIR +.5%). In terms of Core YoY street expecting 5.5% (vs 5.7% prior, GIR +5.63%) and MoM of .4% (vs .4% prior, GIR .49%). Positioning has indeed turned more defensive into this print: last week the GS Prime book saw the largest net selling in 7 weeks, driven by Macro Products (index ETFs, futures, and baskets), which saw the largest short sales in nearly 5 months. In terms of S&P’s reaction function to headline YoY print I think risk is skewed to the upside as pain trade remains higher and this mkt continues to seek max pain whenever it gets a chance (yes some of this was pre traded yesterday). GS GBM
  5. President Joe Biden is set to name Lael Brainard, vice-chair of the US Federal Reserve, to be his top economic adviser, bringing the central bank’s second-in-command to the White House to serve as one of Washington’s top financial policymakers. FT
  6. Container shipping costs have plunged (in some cases, they’re down ~85% from their peak) thanks to a normalization of the global economy coupled w/inventory de-stocking and soft consumer demand for goods. FT
  7. Crypto is coming under attack from financial regulators with agencies such as the SEC keen to sever the asset’s ties to the banking system, pushing it far to the fringes of the financial world. WSJ
  8. Ford will cut 3,800 jobs across Europe, or 11 per cent of its workforce in the region, as it pares back its range of models and prepares to stop selling engine-driven cars later this decade. FT
  9. TikTok is designed to collect far more personal information from the phones of users compared to other social media apps (TikTok has 2x as many “trackers” in its source code than the industry average). London Times
  10. Share of companies reporting rising materials costs remains elevated but has fallen from its peak...

A More detailed look at global markets courtesy of Newsquawk

APAC stocks eventually traded mixed with a slight positive bias following the firm handover from Wall St where the major indices gained and the Treasury curve flattened ahead of US inflation data. ASX 200 was led by tech and telecoms after similar outperformance of their US counterparts but with gains capped as an improved business survey was offset by a deterioration in consumer confidence. Nikkei 225 was marginally firmer as participants digested GDP data which showed Japan’s economy returned to growth albeit at a slower-than-expected pace, while the government nominated academic Ueda as the next BoJ Governor, as expected. Hang Seng and Shanghai Comp. were indecisive after the PBoC’s liquidity drain and amid the current balloon-related frictions, although reports noted US Secretary of State Blinken is considering meeting with China's Foreign Minister Wang which could provide an opportunity to diffuse the tensions.

Top Asian News

  • Japan's government nominated academic Kazuo Ueda as the next BoJ Governor, while it nominated BoJ Executive Director Shinichi Uchida and former FSA chief Ryozo Himino as Deputy Governors, as expected.
  • China's MOFCOM says China will take necessary measures to resolutely safeguard legitimate rights and interests of Chinese enterprises, with regards to US adding Chinese firms to the export control list.
  • ‘Mr. Yen’ Says Ueda May Raise Rates by October, Currency to Gain
  • Singapore to Set Effective Corporate Tax Rate at 15% From 2025
  • Asia Stocks Rebound as Tech Shares Gain Before US Inflation Data
  • Bitcoin Performance Tops Ether After SEC Swipe Against Staking

European bourses are modestly firmer, Euro Stoxx 50 +0.3%, in relatively limited newsflow following a mixed APAC handover ahead of US CPI. Stateside, futures are essentially flat with an incremental positive bias pre-CPI and Fed speak, newsquawk CPI preview available here. Within Europe, sectors are all in the green with Telecom's outperforming on the back of Vodafone while *Travel & Leisure *benefits from a Tui update and easyJet broker move. Boeing (BA) has cut its outlook for India's commercial aviation market to circa. 2.21k planes over the next decade (prev. forecast 2.240k), via APAC MD at Aero India. Tesla (TSLA) workers a New York are said to launch a union campaign, according to Bloomberg. TSMC (TSM/2330 TT) is to increase its investment at the Arizona plant by up to USD 3.5bln, according to Bloomberg. Turkey is reportedly planning to resume stock trading on Wednesday, via Bloomberg; Reuters sources add that authorities are taking steps to reduce the market impact of the earthquake.

Top European News

  • UK and EU could announce a new customs deal within the next two weeks to resolve the dispute over post-Brexit trading rules in Northern Ireland, according to The Telegraph.
  • "Negotiations over the Northern Ireland protocol are in the crucial final phase with a potential deal as early as next week"", according to UK government sources cited by The Guardian.
  • A Reuters poll showed about three-quarters of respondents expect the BoE to hike rates by 25bps in March and then pause. Furthermore, the median view is for the UK economy to contract in Q1, Q2 and Q3, while the economy is expected to contract by 0.8% in 2023 (prev. forecast for 0.9% contraction) and expand by 0.8% in 2024 (prev. forecast 0.8%).
  • German Finance Minister Lindner says cannot back current EU Commission fiscal-rule proposals.
  • Turkey is reportedly to temporarily suspend some gold imports, according to Bloomberg; Wealth Fund is to support equities with a new mechanism.


  • The DXY has been pushed modestly below 103.00 and resides at the lower-end of 102.90-103.26 parameters pre-CPI.
  • Action which initially saw JPY outperformance and NZD underperformance, in a reversal of Monday's direction, as Ueda's nomination was confirmed and New Zealand declared a post-cyclone state of emergency; NZD/USD below 0.6350.
  • Though, the upside in JPY has dissipated with USD/JPY at the top-end of 132.46-131.79 boundaries.
  • Most recently, GBP and EUR have taken pole position amid employment data and reports of Brexit/N. Ireland progress; with Cable above 1.22 and EUR/USD surpassing 1.0750.
  • Amidst this, EUR/GBP is slightly softer as GBP outpaces its single currency peer, though the EUR is besting the CHF despite firmer Swiss PPI.
  • Brazil's President Lula and Finance Minister Haddad to meet at 13:00GMT/08:00EST to discuss the possible change in the inflation target, via Estadao; on Thursday, the National Monetary Council (CMN) may debate the issue if there is a decision by the president on the subject.
  • PBoC set USD/CNY mid-point at 6.8136 vs exp. 6.8138 (prev. 6.8151)

Fixed Income

  • EGBs remain firmer but well off initial best with core-pressure occurring amidst the morning's UK & Italian sales, with Gilts lagging and BTPs slightly outperforming in the aftermath.
  • Specifically, Bund are holding above 136.00 but are some 40 ticks shy of best while Gilts have been an equal margin below 104.00 at worst.
  • Stateside, USTs are in-fitting with EGBs but with some slim relative outperformance and thus lie closer to the top-end of 112.26+ to 113.01+ ranges with yields lower across the curve pre-CPI.


  • Crude benchmarks are hampered following earlier reports that the Biden admin. intends to sell 26mln more from the SPR; as such, WTI Mar and Brent Apr are below USD 79.00/bbl and USD 86.00/bbl respectively.
  • UAE Energy Minister says UAE is committed to the OPEC deal lasting until end-2023; more worried about supply than demand next year.
  • Russian Urals crude supplies to China increased to a 7-month high of 230k BPD in January, according to Reuters sources; ports loaded 360k BPD of Urals to vessels heading to China over February 1-10th.
  • Phillips (PSX) 66 Wood River refinery (380k BPD) reports flaring and a unit upset.
  • Spot gold has been moving at the whim of the USD, with the yellow metal testing USD 1850/oz to the downside, though has recuperated somewhat as the DXY loses 103.00; 50-DMA resides at USD 1857/oz.


  • US State Department said the US stands with the Philippines in the face of the Chinese Coast Guard's reported use of laser devices against the crew of a Philippines Coast Guard ship on February 6th in the South China Sea. US added that China's conduct was provocative and unsafe which resulted in the temporary blindness of crew members and that China's dangerous operational behaviour directly threatens regional peace and stability, while it reaffirmed any attack on Philippine armed forces, public vessels or aircraft would invoke mutual defence commitments under their treaty, according to Reuters.
  • Russian Kremlin says that NATO is an organisation that is hostile to Russia and proves its hostility every day; NATO is trying to make its involvement in the conflict ever clearer.

US Event Calendar

  • 06:00: Jan. SMALL BUSINESS OPTIMISM 90.3, est. 91.0, prior 89.8
  • 08:30: Jan. CPI MoM, est. 0.5%, prior -0.1%, revised 0.1%
  • 08:30: Jan. CPI YoY, est. 6.2%, prior 6.5%
  • 08:30: Jan. CPI Ex Food and Energy MoM, est. 0.4%, prior 0.3%, revised 0.4%
  • 08:30: Jan. CPI Ex Food and Energy YoY, est. 5.5%, prior 5.7%
  • 08:30: Jan. Real Avg Weekly Earnings YoY, prior -3.1%, revised -2.6%
  • 08:30: Jan. Real Avg Hourly Earning YoY, prior -1.7%, revised -1.5%

Central Bank speakers

  • 09:30: Fed’s Barkin Interviewed on Bloomberg TV
  • 11:00: Fed’s Logan Takes Part in a Moderated Discussion
  • 11:30: Fed’s Harker Discusses the Economic Outlook
  • 14:05: Fed’s Williams Gives Speech at New York Bankers Conference

DB's Jim Reid concludes the overnight wrap

A happy Valentine's Day to all our readers. I hope you all have your highly personal words of love ready to express to your loved one(s). If not, you can do it in a few seconds on chatGPT. A lot less effort.

What better to get you in the mood for love than learning how quickly prices are rising in today's highly anticipated US CPI print. Everything in the last few weeks has pointed to near-term upward pressure on US inflation in the early part of this year even if it eventually falls more sharply later in the year. Will markets and the Fed look through this if it happens? That's the big question. The good news is that the market has been shaken out of its immaculate disinflation view in the last 7-8 business days with 10yr UST, Terminal (July) and Dec '23 Fed Futures contracts up c.36bps, c.40bps and c.60bps, respectively, from its intra-day lows on February 2nd after what was interpreted as a dovish FOMC. Since then, we've had a very strong payrolls, the highest used car price growth for 14 months, and revisions to core CPI that showed a less aggressive disinflation path than originally reported. On the latter see more in my CoTD yesterday (link here) but 3 month annualised core CPI is now running at 4.25% rather than the 3.14% the market had imagined before Friday's revisions.

Today's number is also the first to see new expenditure weights that lifts OER's importance. Given OER is expected to stay strong in the near-term before falling later in the year, this could push near-term inflation higher along with a few other things highlighted in the "The rise before the fall" chartbook (link here) from our economists last week. However, the market should be better prepared for this now that it's more widely recognised.

In terms of what to expect from the CPI report, our US economists are looking for headline CPI to come in at +0.42% in January. On a monthly basis, it would be the fastest monthly pace since October, but given the very strong inflation in the first half of last year, that would still see the year-on-year measure fall to 6.2%, the slowest since October 2021. For core CPI, they think it will come in at +0.36%, which would take the year-on-year measure down to 5.5%, the slowest since December 2021. However, even though the year-on-year measures would still decline, that monthly trajectory would still be too fast for the Fed to be comfortable, as +0.36% monthly core CPI translates into an annualised pace of +4.4% if it happened every month. As usual, we’ll be poring over all the components of the report and our US economist Justin Weidner will be hosting a call 30 minutes after the release (2pm London time/9am NYT). To register see the details in his preview note here.

We’ve got four Fed speakers scheduled for today, so there should be some reaction after the release from policymakers. In the meantime, however, Governor Bowman said yesterday that she expected “it will be necessary to further tighten monetary policy to bring inflation down toward our goal”. Furthermore, she added that although “there are costs and risks to tightening monetary policy to lower inflation, I see the costs and risks of allowing inflation to persist as far greater.”

Ahead of this big day, yesterday saw futures map out their most aggressive path of rate hikes to date, with pricing for the Fed’s terminal rate trading above the 5.2% mark for most of the day before closing slightly higher at 5.1925%. 2yr US yields held at around 3-month highs while yields on 2yr German debt were up +2.3bps to their highest level since 2008, and it was the same story in France and the Netherlands too. As with the Fed, that came as expectations for future ECB policy rates hit their most aggressive to date, with over +100bps of hikes now priced in by the June meeting, which if realised would take their deposit rate above 3.5%. See Mark Wall’s blog from yesterday here where he reiterated his 3.25% ECB terminal rate forecast but continued to suggest the risks are on the upside with a likely 3.25-3.75% landing zone.

However, outside of that, markets were in more upbeat mode with the S&P 500 (+1.14%) advancing and 10yr Treasury yields (-2.7bps) falling as both asset classes clawed back some of last week’s declines. There was some talk about lower inflation expectations in the NY Fed’s latest Survey of Consumer Expectations. In reality, the important three-year horizon was down two-tenths to 2.7%, but five-year expectations were up a tenth to 2.5% and one-year unchanged at 5%. For three-year expectations, it’s actually their lowest since October 2020 before the current bout of high inflation began. But for five-year expectations, they’re at their highest in seven months. Markets seemed to like the report though and tech stocks were the biggest outperformers, and the NASDAQ (+1.48%) and the FANG+ index (+1.96%) saw even larger gains, aided by solid gains from Microsoft (+3.12%) and Meta (+3.03%). And over in Europe it was much the same story, with the STOXX 600 (+0.90%) leading a broad-based advance of its own.

The main exception to this pattern of equity gains were among energy stocks, which came amidst a fresh tumble in energy prices yesterday. For instance, natural gas futures in Europe were down -4.35% to a fresh 17-month low of €51.65 per megawatt-hour, so more positive news for European consumers, and we also saw the European Commission upgrade their Euro Area growth forecast for this year to +0.9% yesterday.

Asian equity markets are broadly positive overnight. As I type, the KOSPI (-0.87%) is leading gains across the region with the Nikkei (+0.52%) and the Hang Seng (+0.22%) also trading up. Elsewhere, Chinese stocks have reversed their opening gains with the CSI down -0.32% and the Shanghai Composite (-0.03%) trading fractionally lower. In overnight trading, US stock futures are indicating a negative start with those tied to the S&P 500 (-0.10%) and NASDAQ 100 (-0.15%) inching lower ahead of the US inflation data.

Early morning data from Japan showed that the economy comfortably avoided recession by expanding +0.6% on an annualised basis for the final quarter of 2022 but lower than market expectations of +2.0%. It followed a revised contraction of -1% recorded in 3Q compared with a year ago.

Staying on Japan, the government named Kazuo Ueda as its pick to become the next BOJ Governor. According to a government document, Ueda was nominated by Japan’s PM Fumio Kishida and would succeed incumbent Haruhiko Kuroda, whose term ends on April 8. Following the reported nomination, the Japanese yen strengthened +0.43% to trade at 131.85 against the dollar as we go to press.

To the day ahead now, and the main highlight will be the US CPI release for January. Other data releases include UK unemployment for December. From central banks, we’ll hear from the Fed’s Barkin, Logan, Harker and Williams, as well as the ECB’s Makhlouf. Lastly, earnings releases include Coca-Cola, Airbnb and Marriott.

Tyler Durden Tue, 02/14/2023 - 08:00

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Bitcoin on Wheels: The Story of Bitcoinetas

Meet the Bitcoinetas, a fleet of transformative vehicles on a mission to spread the bitcoin message everywhere they go. From Argentina to South Africa,…



You may have seen that picture of Michael Saylor in a bitcoin-branded van, with a cheerful guy right next to the car door. This one:

Ariel Aguilar and La Bitcoineta European Edition at BTC Prague.

That car is the Bitcoineta European Edition, and the cheerful guy is Ariel Aguilar. Ariel is part of the European Bitcoineta team, and has previously driven another similar car in Argentina. In fact, there are currently five cars around the world that carry the name Bitcoineta (in some cases preceded with the Spanish definite article “La”).

Argentina: the original La Bitcoineta

The story of Bitcoinetas begins with the birth of 'La Bitcoineta' in Argentina, back in 2017. Inspired by the vibrancy of the South American Bitcoin community, the original Bitcoineta was conceived after an annual Latin American Conference (Labitconf), where the visionaries behind it recognized a unique opportunity to promote Bitcoin education in remote areas. Armed with a bright orange Bitcoin-themed exterior and a mission to bridge the gap in financial literacy, La Bitcoineta embarked on a journey to bring awareness of Bitcoin's potential benefits to villages and towns that often remained untouched by mainstream financial education initiatives. Operated by a team of dedicated volunteers, it was more than just a car; it was a symbol of hope and empowerment for those living on the fringes of financial inclusion.

The concept drawing for La Bitcoineta from December 2017.

Ariel was part of that initial Argentinian Bitcoineta team, and spent weeks on the road when the car became a reality. The original dream to bring bitcoin education even to remote areas within Argentina and other South American countries came true, and the La Bitcoineta team took part in dozens of local bitcoin meetups in the subsequent years.

The original La Bitcoineta from Argentina.

One major hiccup came in late 2018, when the car was crashed into while parked in Puerto Madryn. The car was pretty much destroyed, but since the team was possessed by a honey badger spirit, nothing could stop them from keeping true to their mission. It is a testament to the determination and resilience of the Argentinian team that the car was quickly restored and returned on its orange-pilling quest soon after.

Argentinian Bitcoineta after a major accident (no-one got hurt); the car was restored shortly after.

Over the more than 5 years that the Argentinian Bitcoineta has been running, it has traveled more than 80,000 kilometers - and as we’ll see further, it inspired multiple similar initiatives around the world.

Follow La Bitcoineta’s journey:



El Salvador: Bitcoin Beach

In early 2021, the president of El Salvador passed the Bitcoin Law, making bitcoin legal tender in the country. The Labitconf team decided to celebrate this major step forward in bitcoin adoption by hosting the annual conference in San Salvador, the capital city of El Salvador. And correspondingly, the Argentinian Bitcoineta team made plans for a bold 7000-kilometer road trip to visit the Bitcoin country with the iconic Bitcoin car.

However, it proved to be impossible to cross so many borders separating Argentina and Salvador, since many governments were still imposing travel restrictions due to a Covid pandemic. So two weeks before the November event, the Labitconf team decided to fund a second Bitcoineta directly in El Salvador, as part of the Bitcoin Beach circular economy. Thus the second Bitcoineta was born.

Salvadoran’s Bitcoineta operates in the El Zonte region, where the Bitcoin Beach circular economy is located.

The eye-catching Volkswagen minibus has been donated to the Bitcoin Beach team, which uses the car for the needs of its circular economy based in El Zonte.

Follow Bitcoin Beach:


South Africa: Bitcoin Ekasi

Late 2021 saw one other major development in terms of grassroots bitcoin adoption. On the other side of the planet, in South Africa, Hermann Vivier initiated the Bitcoin Ekasi project. “Ekasi” is a colloquial term for a township, and a township in the South African context is an underdeveloped urban area with a predominantly black population, a remnant of the segregationist apartheid regime. Bitcoin Ekasi emerged as an attempt to introduce bitcoin into the economy of the JCC Camp township located in Mossel Bay, and has gained a lot of success on that front.

Bitcoin Ekasi was in large part inspired by the success of the Bitcoin Beach circular economy back in El Salvador, and the respect was mutual. The Bitcoin Beach team thus decided to pass on the favor they received from the Argentinian Bitcoineta team, and provided funds to Bitcoin Ekasi for them to build a Bitcoineta of their own.

Bitcoin Ekasi’s Bitcoineta as seen at the Adopting Bitcoin Cape Town conference.
Bitcoin Ekasi’s Bitcoineta as seen at the Adopting Bitcoin Cape Town conference. Hermann Vivier is seen in the background.
South African Bitcoineta serves the needs of Bitcoin Ekasi, a local bitcoin circular economy in the JCC Camp township.

Bitcoin Ekasi emerged as a sister organization of Surfer Kids, a non-profit organization with a mission to empower marginalized youths through surfing. The Ekasi Bitcoineta thus partially serves as a means to get the kids to visit various surfer competitions in South Africa. A major highlight in this regard was when the kids got to meet Jordy Smith, one of the most successful South African surfers worldwide.

Coincidentally, South African surfers present an intriguing demographic for understanding Bitcoin due to their unique circumstances and needs. To make it as a professional surfer, the athletes need to attend competitions abroad; but since South Africa has tight currency controls in place, it is often a headache to send money abroad for travel and competition expenses. The borderless nature of Bitcoin offers a solution to these constraints, providing surfers with an alternative means of moving funds across borders without any obstacles.

Photo taken at the South African Junior Surfing Championships 2023. Back row, left to right:

Mbasa, Chuma, Jordy Smith, Sandiso. Front, left to right: Owethu, Sibulele.

To find out more about Bitcoineta South Africa and the non-profit endeavors it serves, watch Lekker Feeling, a documentary by Aubrey Strobel:

Follow Bitcoin Ekasi:



Europe: Bitcoineta Europa

The European Bitcoineta started its journey in early 2023, with Ariel Aguilar being one of the main catalysts behind the idea. Unlike its predecessors in El Salvador and South Africa, the European Bitcoineta was not funded by a previous team but instead secured support from individual donors, reflecting a grassroots approach to spreading financial literacy.

European Bitcoineta sports a hard-to-overlook bitcoin logo along with the message “Bitcoin is Work. Bitcoin is Time. Bitcoin is Hope.”

The European Bitcoineta is a Mercedes box van adorned with a prominent Bitcoin logo and inspiring messages, and serves as a mobile hub for education and discussion at numerous European Bitcoin conferences and local meetups. Inside its spacious interior, both notable bitcoiners and bitcoin plebs share their insights on the walls, fostering a sense of camaraderie and collaboration.

Inside the European Bitcoineta, one can find the wall of fame, where visitors can read messages from prominent bitcoiners such as Michael Saylor, Uncle Rockstar, Javier Bastardo, Hodlonaut, and many others.
On the “pleb wall”, any bitcoiner can share their message (as long as space permits).

Follow Bitcoineta Europa’s journey:



Ghana: Bitcoineta West Africa


Introduced in December 2023 at the Africa Bitcoin Conference in Ghana, the fifth Bitcoineta was donated to the Ghanaian Bitcoin Cowries educational initiative as part of the Trezor Academy program.

Bitcoineta West Africa was launched in December 2023 at the Africa Bitcoin Conference. Among its elements, it bears the motto of the Trezor Academy initiative: Bitcoin. Education. Freedom.

Bitcoineta West Africa was funded by the proceeds from the bitcoin-only limited edition Trezor device, which was sold out within one day of its launch at the Bitcoin Amsterdam conference.

With plans for an extensive tour spanning Ghana, Togo, Benin, Nigeria, and potentially other countries within the ECOWAS political and economic union, Bitcoineta West Africa embodies the spirit of collaboration and solidarity in driving Bitcoin adoption and financial inclusion throughout the Global South.

Bitcoineta West Africa surrounded by a group of enthusiastic bitcoiners at the Black Star Square, Accra, Ghana.

Follow Bitcoineta West Africa’s journey:



All the Bitcoineta cars around the world share one overarching mission: to empower their local communities through bitcoin education, and thus improve the lives of common people that might have a strong need for bitcoin without being currently aware of such need. As they continue to traverse borders and break down barriers, Bitcoinetas serve as a reminder of the power of grassroots initiatives and the importance of financial education in shaping a more inclusive future. The tradition of Bitcoinetas will continue to flourish, and in the years to come we will hopefully encounter a brazenly decorated bitcoin car everywhere we go.

If the inspiring stories of Bitcoinetas have ignited a passion within you to make a difference in your community, we encourage you to take action! Reach out to one of the existing Bitcoineta teams for guidance, support, and inspiration on how to start your own initiative. Whether you're interested in spreading Bitcoin education, promoting financial literacy, or fostering empowerment in underserved areas, the Bitcoineta community is here to help you every step of the way. Together, we will orange pill the world!

This is a guest post by Josef Tetek. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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Digital Currency And Gold As Speculative Warnings

Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution…



Over the last few years, digital currencies and gold have become decent barometers of speculative investor appetite. Such isn’t surprising given the evolution of the market into a “casino” following the pandemic, where retail traders have increased their speculative appetites.

“Such is unsurprising, given that retail investors often fall victim to the psychological behavior of the “fear of missing out.” The chart below shows the “dumb money index” versus the S&P 500. Once again, retail investors are very long equities relative to the institutional players ascribed to being the “smart money.””

“The difference between “smart” and “dumb money” investors shows that, more often than not, the “dumb money” invests near market tops and sells near market bottoms.”

Net Smart Dumb Money vs Market

That enthusiasm has increased sharply since last November as stocks surged in hopes that the Federal Reserve would cut interest rates. As noted by Sentiment Trader:

“Over the past 18 weeks, the straight-up rally has moved us to an interesting juncture in the Sentiment Cycle. For the past few weeks, the S&P 500 has demonstrated a high positive correlation to the ‘Enthusiasm’ part of the cycle and a highly negative correlation to the ‘Panic’ phase.”

Investor Enthusiasm

That frenzy to chase the markets, driven by the psychological bias of the “fear of missing out,” has permeated the entirety of the market. As noted in This Is Nuts:”

“Since then, the entire market has surged higher following last week’s earnings report from Nvidia (NVDA). The reason I say “this is nuts” is the assumption that all companies were going to grow earnings and revenue at Nvidia’s rate. There is little doubt about Nvidia’s earnings and revenue growth rates. However, to maintain that growth pace indefinitely, particularly at 32x price-to-sales, means others like AMD and Intel must lose market share.”

Nvidia Price To Sales

Of course, it is not just a speculative frenzy in the markets for stocks, specifically anything related to “artificial intelligence,” but that exuberance has spilled over into gold and cryptocurrencies.

Birds Of A Feather

There are a couple of ways to measure exuberance in the assets. While sentiment measures examine the broad market, technical indicators can reflect exuberance on individual asset levels. However, before we get to our charts, we need a brief explanation of statistics, specifically, standard deviation.

As I discussed in “Revisiting Bob Farrell’s 10 Investing Rules”:

“Like a rubber band that has been stretched too far – it must be relaxed in order to be stretched again. This is exactly the same for stock prices that are anchored to their moving averages. Trends that get overextended in one direction, or another, always return to their long-term average. Even during a strong uptrend or strong downtrend, prices often move back (revert) to a long-term moving average.”

The idea of “stretching the rubber band” can be measured in several ways, but I will limit our discussion this week to Standard Deviation and measuring deviation with “Bollinger Bands.”

“Standard Deviation” is defined as:

“A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of the variance.”

In plain English, this means that the further away from the average that an event occurs, the more unlikely it becomes. As shown below, out of 1000 occurrences, only three will fall outside the area of 3 standard deviations. 95.4% of the time, events will occur within two standard deviations.

Standard Deviation Chart

A second measure of “exuberance” is “relative strength.”

“In technical analysis, the relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can read from 0 to 100.

Traditional interpretation and usage of the RSI are that values of 70 or above indicate that a security is becoming overbought or overvalued and may be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition.” – Investopedia

With those two measures, let’s look at Nvidia (NVDA), the poster child of speculative momentum trading in the markets. Nvidia trades more than 3 standard deviations above its moving average, and its RSI is 81. The last time this occurred was in July of 2023 when Nvidia consolidated and corrected prices through November.

NVDA chart vs Bollinger Bands

Interestingly, gold also trades well into 3 standard deviation territory with an RSI reading of 75. Given that gold is supposed to be a “safe haven” or “risk off” asset, it is instead getting swept up in the current market exuberance.

Gold vs Bollinger Bands

The same is seen with digital currencies. Given the recent approval of spot, Bitcoin exchange-traded funds (ETFs), the panic bid to buy Bitcoin has pushed the price well into 3 standard deviation territory with an RSI of 73.

Bitcoin vs Bollinger Bands

In other words, the stock market frenzy to “buy anything that is going up” has spread from just a handful of stocks related to artificial intelligence to gold and digital currencies.

It’s All Relative

We can see the correlation between stock market exuberance and gold and digital currency, which has risen since 2015 but accelerated following the post-pandemic, stimulus-fueled market frenzy. Since the market, gold and cryptocurrencies, or Bitcoin for our purposes, have disparate prices, we have rebased the performance to 100 in 2015.

Gold was supposed to be an inflation hedge. Yet, in 2022, gold prices fell as the market declined and inflation surged to 9%. However, as inflation has fallen and the stock market surged, so has gold. Notably, since 2015, gold and the market have moved in a more correlated pattern, which has reduced the hedging effect of gold in portfolios. In other words, during the subsequent market decline, gold will likely track stocks lower, failing to provide its “wealth preservation” status for investors.

SP500 vs Gold

The same goes for cryptocurrencies. Bitcoin is substantially more volatile than gold and tends to ebb and flow with the overall market. As sentiment surges in the S&P 500, Bitcoin and other cryptocurrencies follow suit as speculative appetites increase. Unfortunately, for individuals once again piling into Bitcoin to chase rising prices, if, or when, the market corrects, the decline in cryptocurrencies will likely substantially outpace the decline in market-based equities. This is particularly the case as Wall Street can now short the spot-Bitcoin ETFs, creating additional selling pressure on Bitcoin.

SP500 vs Bitcoin

Just for added measure, here is Bitcoin versus gold.

Gold vs Bitcoin

Not A Recommendation

There are many narratives surrounding the markets, digital currency, and gold. However, in today’s market, more than in previous years, all assets are getting swept up into the investor-feeding frenzy.

Sure, this time could be different. I am only making an observation and not an investment recommendation.

However, from a portfolio management perspective, it will likely pay to remain attentive to the correlated risk between asset classes. If some event causes a reversal in bullish exuberance, cash and bonds may be the only place to hide.

The post Digital Currency And Gold As Speculative Warnings appeared first on RIA.

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Aging at AACR Annual Meeting 2024

BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging…



BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals

Credit: Impact Journals

BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals

Impact Journals will be participating as an exhibitor at the American Association for Cancer Research (AACR) Annual Meeting 2024 from April 5-10 at the San Diego Convention Center in San Diego, California. This year, the AACR meeting theme is “Inspiring Science • Fueling Progress • Revolutionizing Care.”

Visit booth #4159 at the AACR Annual Meeting 2024 to connect with members of the Aging team.

About Aging-US:

Aging publishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.

Aging is indexed and archived by PubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed CentralWeb of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).

Please visit our website at​​ and connect with us:

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