where is Icarus
market vibes
July 23…)
“In 1977, when I started my first job at the Federal Reserve Board as a staff economist in the Division of International Finance, it was an article of faith in central banking that secrecy about monetary policy decisions was the best policy.” Janet Yellen
Data this morning includes the Philly Fed non-manufacturing survey at 8:30 AM EDT and the National Association of Realtors existing home sales at 10:00 AM EDT. The DOE reports US petroleum data at 10:30 AM EDT (API data is noted further into this morning’s note).
In the news
Multiple sources are reporteing EV and plug-ins equaled 53% of China’s auto sales in June, up from 6% in 2020. China's EV exports reached $44 billion in 2024, a 10% increase from the previous year, but for now, there is still a 100% tariff on Chinese EVs, effectively blocking sales in America.
The global EV fleet sales in 2024 were 17 million units up 25% and projected to exceed 20 million in 2025, representing over 25% of new car sales, according to Reuters. Something to keep in mind as OPEC+ moves to increase production and regain market share. More oil, fewer cars.
The U.S. and Japan agreed to a 15% tariff on U.S. imports from Japan. Indonesia and the Philippines agreed to 19% tariffs on U.S. imports and zero tariffs for U.S. goods going into their markets. Everyone seems happy.
Earnings season is underway. Freeport (FCX copper and gold) reports this morning. Tesla and Alphabet this afternoon. Obama responded to Trump, “Nonsense.”
In the markets
The Yen is not moving on the tariff deal. In long timeframes, the yen is cheap, or better said, the dollar is very strong despite all the hair-pulling about USD weakness. Futures open interest is very high, and volumes in Yen futures have been steadily growing since COVID. My guess is the CME has become a parking lot for structures and carries. Rising OI and volumes are mostly swap rolls indicating the visible growth of Yen carry.
A rising yen is bad because it makes the yen carry negative, which may have implications for equities and fixed income. The BOE’s Bailey said it yesterday. So did Dimon last August; Powell’s intransigence to cut rates, etc. One of these days…
More on stocks, gold, oil and crypto this morning. And… is the Fed in trouble? In the vibe.
