Daily Brief Macro: HEW: Dovish Arguments Ageing Poorly and more

• Equity and rates market prices normalised further as data remains too resilient to prompt cuts, and US trade policy still seems to be reversing its destructive aspects.
• UK GDP boomed beyond expectations again, albeit amid residual seasonality. US CPI data were soft and stable, as companies appeared to have smoothed the tariff shock.
• Next week’s UK inflation data could compound the pressure by exceeding the consensus to reach 3.4% on the CPI. The flash PMIs and RBA decision are other timely highlights.

• Market experiencing steepening yield curve, potentially indicating higher inflation and stronger growth
• Stocks rallying, with significant moves in earnings yield and small caps
• Asia and Europe markets up, Dow, S&P, Nasdaq, and Russell all posting gains; Gold and Bitcoin down, Oil up, Vix down

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• US stock market dependency on world index has increased significantly, reaching around 65-67%
• Tariffs implemented by Trump have had a bearish impact on stock market
• Small cap underperformance in US market is at its highest in 25 years, leading to interesting valuation opportunities

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• US and China have seen reduction in tariffs, with US tariffs on China now around 41%
• The macro impact of this reduction includes potential growth for the full year and quarterly profile
• Fiscal stimulus and monetary easing may need to be adjusted based on the current tariff situation

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Iron ore futures surged to a six-week high as U.S.-China trade tensions eased, with both nations agreeing to sharply reduce tariffs for 90 days, boosting market sentiment and commodity demand. 
• Underlying demand remains weak, with China’s steel consumption pressured by a cooling property sector and ongoing structural shifts across its broader economic landscape. 
• On the technical front, the outlook is turning increasingly bullish as prices are holding above key moving averages. 

• The US and China have taken on a more constructive approach to their trade differences. Tariff rates will be immediately reduced significantly, and further talks will be held as well. 
• Still, the fundamental misalignment in interests and contradictory negotiating styles make elusive a substantive deal that restores bilateral trade to its pre-escalation level. 
• For China, falling export profitability and rising protectionism will limit further export growth. Economic recovery is held back by frailty in manufacturing and consumption.

• OPEC held its 2025 and 2026 demand growth forecasts steady. The IEA’s upward revision reflects a catch-up adjustment for 2024, not a fundamental shift in its forward outlook.
• The EIA raised its demand growth forecast by 7.8% for 2025 but cut estimates by 13.5% for 2026. Meanwhile, it raised supply forecasts and projected inventory builds for both years.
• The EIA expects Henry Hub prices to rise in 2025 and 2026 from current levels, though it revised its 2025 forecast 3.5% lower and lifted 2026 estimates by 4.3%.

• After falling to a 2025 low, Bean prices have rallied strongly to clock a nine-month high. Macro conditions augur well for the rally to be sustained. 
• Implied vols on bean options have dropped even as prices rise. Spike in skew points to reduced demand for downside risk hinting at upward price buoyancy.  
• Technical charts paint a broadly bullish picture with potential for rally ahead remaining intact. However, the bullish momentum might take a breather in the near term.   

• Hospitals /In Depth: China’s public hospitals face debt crisis amid health care reforms
• Rare earth /China resumes rare earth exports under tight controls as global prices soar
• Autos /China’s auto boom in Russia cools as tariffs, taxes and geopolitics bite

• What is a bit of extra cash between friends ? Do numbers mean anything anymore ?
• Long before Trump’s visit to the Gulf, promises of incredible investments were flying around.
• Now that the President touched ground we see a bit better. Saudi Arabia was first to fire and it will be 600 bn $ of commitments.