lava
market vibes
March 6…)
“When I’m caught between two evils I generally pick the one I've never tried before.” Mae West 1893/1980
In the news
The Atlanta Fed GDPNow forecast for Q1 2025, dropped to -2.8% as of March 3, 2025, a huge swing from +3.4% four weeks ago. The decline appears to be driven by a record-high U.S. trade deficit of $153 billion in January which included tariff related stockpiling. Fed's GDPNow is based on economic data like construction spending and ISM etc. and notoriously volatile. The idea gold imports could be erroniously misclassified as goods rather than financial transactions is a kerfuffle that started on X. If the Fed implied every arb in GDP forecasting, the metric would lose all meaning. Ignore US gold imports. (ht TOK)
SCOTUS upheld a lower court ruling that required the Trump administration to pay contractors for foreign aid work yesterday, about 2 billion. Narratives differed widely in the press. MSM heralded the ruling as the end of DOGE. Legal experts say, no. Not a penny will be paid. It goes back to the lower court for clarity. In the meantime, DOGE keeps rolling.
In the markets
The hard spill in Bunds is beginning to decelerate. Although there is a lot of hair-pulling about it, rates have been higher as recently as 2023 and the range has been in force since 2022. Considering the narrative, I think the larger trend will ultimately take out the lows.
EUR/USD is taking a breath at the 200 MA after leaping 5% in 3 sessions. Yen traders look to Europe for the carry. This chart looks bullish on a decisive close above the 200.
Up next this morning a fresh look at equities after days in dispute, oil at the lows and calm, Yen breaking, and bitcoin in weekly data… you decide.
