What Are the Threats to the US Economy and the Dollar's Position?
Last week's CPI data shows inflation continuing to decline as expected by the market, why did the FED lower the number of rate cuts and raise the inflation forecast for this year?
Employment data continues to be stable, why does Powell feel worried about the economy in 2025?
Saudi Arabia may end the agreement to sell oil only in Dollars, is this the event marking the end of the Dollar's position?
China: May production, retail sales data and Trade War 2.0 with Europe
Macro situation: Industrial production stalls, retail sales higher than expected, PBOC keeps interest rates unchanged
May industrial production increases +5.6% Y/Y (< expected +6.2% | April: +6.7%).
Retail sales increase +3.7% Y/Y, higher than expected +3%.
Investment in real estate development decreases -10.1% Y/Y in the first 5 months of 2024.
Investment in fixed assets +4% in the first 5 months of 2024 (down from 4.2% as of end of April).
China Central Bank (PBOC) keeps the medium-term policy interest rate (MLF - Medium-term Lending Facility) at 2.5%/year for the 10th consecutive month.
As Viet Hustler reported earlier, PBOC may only cut interest rates from July.
The collateral value for home purchase mortgage loans in RMBS pools (Residential Mortgage Backed Security) drops to 363 billion CNY:
… only >1/3 compared to over 1,000 billion a year ago.
Indicating a high likelihood of fewer mortgages in the pool or house prices have dropped too sharply!
China-Europe Trade War
After the EU announced tariffs on Chinese electric vehicles, China's Ministry of Commerce has initiated an anti-dumping investigation into pork imports from the EU
Last week, EU raised tariffs on EVs imported from China to 48%!
Volvo begins gradually shifting EV production operations from China to Belgium ahead of new EU tariffs.
Other Chinese brands are also accelerating plans to open factories in Europe.
Additionally, Biden is considering further strengthening restrictions on China's access to AI chip technology.
New York manufacturing activity not as bad as expected
June Empire Manufacturing Index at -6, better than estimates -11.3 & previous -15.6
New orders surge from -16.5 to -1.
Prices paid decrease, but average weekly hours and employment both deteriorate
Kashkari: Predicting rate cut in December is 'reasonable'
Need more data to believe that inflation is on track to decline to 2%.
Rate cuts could come at year-end if Fed only cuts once this year.
Crypto Market: Tether launches 'Synthetic Dollar'
El Salvador President proposes opening a bank for Bitcoin investors.
Tether launches 'Synthetic Dollar' - stablecoin designed to track USD with gold-backed collateral
Digital assets witness the week with the most capital outflows since March as Fed continues to anchor rates at high levels
Economic events for the week 06/17 - 06/23
May retail sales - Tuesday
Juneteenth holiday, markets closed - Wednesday
Philly Fed Manufacturing Index June - Thursday
S&P Manufacturing/Services PMI - Friday
May existing home sales - Friday
This week has a total of 10 Fed officials' speech events
This week's earnings release schedule:
Other news
Berkshire Hathaway sells 1.3 million BYD shares, reducing its ownership stake in the Chinese electric vehicle maker from 7% to 6.9%
London regains position as Europe's largest stock market, surpassing Paris after France's recent political crisis
Wells Fargo loses millions of USD as customers rush to use credit cards to pay rent.
FYI: In 2022, Wells Fargo partnered with Bilt Technologies to launch a credit card that allows users to pay rent without fees to the landlord, while earning rewards points.
Discover investment opportunities with Steve and Viet Hustler!
In the current volatile financial market landscape, grasping timely information and making accurate investment decisions is extremely important. Join the Discord group - where Steve and the team will help you:
Follow Steve and team's trades along with many strategies suitable for everyone, helping you optimize profits and minimize risks.
Access in-depth market analysis and effective investment strategies, tailored to each market phase.
Connect with a passionate and experienced trader community, sharing knowledge and investment experiences together.
Don't miss the golden investment opportunity with Steve - learn first, earn later! Let's conquer this challenging and opportunity-filled stock market together.
Join now: https://discord.gg/dansteel
Comments (0)
No comments yet
Be the first to comment
Login to comment