evening wrap, december 18

market vibes

December 18…)

“The older I get, the surer I am that I'm not running the show.” Leonard Cohen

A stunningly dovish miss in headline CPI came in at 2.7% vs. 3.1% expected. Core CPI came in at 2.6% vs. 3.0% expected. Philly Fed manufacturing came in at -10.3% vs. +3% expected, and the Fed’s prices paid index came in at 43.6 vs. 56.1 last. Initial claims were flat, and business conditions were dovish. Bonds tried to rally and fizzled. DXY tried to sell off and rallied.

S&Ps rallied 100 handles from the overnight lows and spent the session grinding lower. By the close, all three indexes were within basis points of where they opened. The leader in metals today was palladium. Bitcoin just missed a new low for the month (more detail on that in a bit).

The Bank of Japan’s policy meeting is ongoing as I write, with a statement expected sometime after 9:30 p.m. EST. Markets expect a hike from 0.50% to 0.75%, a 30-year high. The yen was unchanged on the CME.

Boys will be boys.

MSM news outlets were refusing to broadcast the President’s speech last night, according to a viral narrative, so he leaked through channels to Tucker Carlson that he might declare war on Venezuela. Carlson went on a podcast and said, “[a member of Congress] told me lawmakers were briefed that a war with Venezuela was imminent yesterday… and President Trump might announce it tonight.”

While there’s no proof of a ploy, the sequence of events…Tucker/war/no mention of Venezuela in the speech…turned out to be an artful prank, according to an X post that seems to ring true: “He pulled a war-in-Venezuela fake out to make the networks broadcast all his first-year wins in prime time, all in front of cozy Christmas decorations at the White House. Simply the best media manipulator ever to hold the office.” (via michaeljknowles on X)

In the markets

Palladium made a 3-year high on rising open interest and volume. The auction is going into a 7th day of higher highs and higher lows. As you can see, unlike silver up shortly, there is a good balance of long and short open interest as prices rise and open interest rises with them. This is normal development, and there is no indication of physical or EFP issues.

The platinum chart looks like profit-taking in the context of a soft day for silver and a sluggish day for gold at $4,400.00. High volume cuts two ways in rising markets: it affirms aggressive activity by the buyers, but it also means high volumes of sellers are getting strong prices as weak shorts cover.