Equites reversed gains following a “tough discussion” between the US and Ukraine, raising concerns about geopolitical risks. The President stated that Zelenski “can come back when he is ready for peace.” Shares then again reversed themselves as the markets concluded the dust up between the US and Ukraine was only cheap TV theater and focused instead upon monetary policy.
Depending upon one’s preconceived beliefs and biases, beliefs and biases that could be easily validated by the echo chamber of social media, one could “blame” one side or the other. It can be debated no one is ever objective and those who claim they are perhaps the most subjective people in the room.
Controversy amongst global leaders is common. How many times during WWII did one Ally offend the other?
Perhaps the only certainty to write is that tectonic change may be at hand. Most do not embrace change and are comfortable in the status quo as fear of change and the unknown is often more powerful than the known and current environment.
The short end of the Treasury market “caught a bid” following inflation data that largely met expectations and perhaps later amplified by the outcome of the White House meeting between Trump and Zelensky.
Yields on the benchmark two-year Treasury or instrument most sensitive to monetary policy fell below 4% for the first time since October. Futures are now suggesting a total of 60 bps of easing in 2025 with the first cut occurring in July. The yield curve steepened moderately.
Will these assumptions change again following the release of this week’s top tier economic data?
The economic calendar is comprised of several top tier indicators including the ISM Manufacturing and Private Sector Surveys, trade and productivity data, durable goods and the all-inclusive BLS Employment report.
Last night the foreign markets were up. London was up 0.80%, Paris up 1.37% and Frankfurt up 2.15%. China was down 0.12%, Japan up 1.70% and Hang Seng up 0.28%.
Futures are up 0.4% and 0.75%, respectively as both Bitcoin and TSLA. President Trump indicated that he would advocate for the creation of a crypto reserve that would include both Bitcoin and Ether. TSLA received a major upgrade. The 10-year is off 11/32 to yield 4.25%.
