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Executive Summary
A lot of news providers and analysts are starting to forecast a hard landing caused by central banks due to too harsh tightening after letting inflation running hot. PPI numbers and CPI numbers are running historically high, for example US PPI at 11.2%.
Equities weakened, especially in the growth sector. Banks reported notably weaker results. Yields went higher, commodities as well. Yield curves steepened.
Worrying are reports that Russia is completing its troop reorganisation. New escalations could also harm agriculture products, as Ukraine then cannot plant this years crop.
There are also escalations in China, where corona lockdowns are bringing city residents to their edge due to supply problems.
Economics
China's GDP grew 4.8%YoY in 1Q22, which is not all that weak considering the high base effect of 18.3%YoY GDP growth in 1Q21. -- ING Economics
Retail sales contracted 3.5%YoY in the quarter.
Industrial production posted growth of 5%YoY
Fixed asset investments grew 9.3%YoY YTD as infrastructure investments are the growth engine for 2022.
The surveyed jobless rate rose to 5.8% in March from 5.5% in February.
The nature of this inflationary shock is very different between US and EU. While price increases in energy & food hit both, in the US most of the CPI increase is due to goods & services inflation: $6 trillion of fiscal stimulus...In EU, it's more about the poor energy policy. -- Twitter from 2022-04-17
ITALIAN CPI YOY FINAL ACTUAL 6.5% (FORECAST -, PREVIOUS 6.7%) $MACRO -- Twitter from 2022-04-15
The most important chart in global macro right now! Mind the gap! -- Twitter from 2022-04-15
Bloomberg Opinion Points of Return by John Authers — 2022-04-15
US PPI YOY ACTUAL 11.2% (FORECAST 10.6%, PREVIOUS 10.0%) $MACRO -- Twitter from 2022-04-13
Politics
MORE CHINESE CITIES LOOK TO LOCKDOWN AS OUTBREAK SPREADS -- Twitter from 2022-04-17
ZELENSKY SAYS KYIV NOT INTERESTED IN ANY TYPE OF NEGOTIATION WITH MOSCOW AFTER DESTRUCTION OF THE UKRAINE'S MILITARY FACTORY -- Twitter from 2022-04-16
WASHINGTON, April 13 (Reuters) - U.S. President Joe Biden announced an additional $800 million in military assistance to Ukraine on Wednesday, expanding the scope of the systems provided to include heavy artillery ahead of a wider Russian assault expected in eastern Ukraine. read more The package, which brings the total military aid since Russian forces invaded in February to more than $2.5 billion, includes artillery systems, artillery rounds, armored personnel carriers and unmanned coastal defense boats, Biden said in a statement after a phone call with Ukrainian President Volodymyr Zelenskiy. -- Reuters 2022-04-14
A great reminder of how investors overstated Le Pen's odds of winning in 2017. With two months to the election, Le Pen's odds were higher than Trump/Brexit odds at the same point (2 months out). This time around, she has been massively underestimated. https://t.co/Sa44HDbPT3 -- Twitter from 2022-04-14
RUSSIA WILL VIEW U.S. AND NATO VEHICLES TRANSPORTING WEAPONS ON UKRAINIAN TERRITORY AS LEGITIMATE MILITARY TARGETS - RUSSIAN DEPUTY FOREIGN MINISTER TO TASS -- Twitter from 2022-04-13
RUSSIA DEPLOYING HEAVY MILITARY EQUIPMENTS TOWARDS BORDER WITH FINLAND; AFTER FINLAND AND SWEDEN CONSIDERING JOINING NATO -- Twitter from 2022-04-12
PUTIN SAYS TALKS ARE IN DEAD-END - RIA -- Twitter from 2022-04-12
UKRAINE'S GOVERNOR OF DONETSK REGION: RUSSIA IS IN THE FINAL STAGE OF REGROUPING ITS FORCES, EVACUATIONS CONTINUE IN THE REGION. -- Twitter from 2022-04-12
Monetary Policy
CHINA CUTS BANKS' RESERVE REQUIREMENT RATIO EFFECTIVE AS OF APRIL 25 BY 25 BPS -- Twitter from 2022-04-15
ECB'S HOLZMANN CALLS FOR RAISING RATES BY 50BPS IN THE FALL. -- Twitter from 2022-04-15
The pace of reducing net asset purchases remains unchanged at €40bn per month in April, €30bn in May and €20bn in June. However, the announcement to end net asset purchases in the third quarter was slightly firmer than at the last meeting. It is still conditional on the inflation forecasts in June, but it looks as if it would now require a severe recession or a sharp drop in headline inflation forecasts for the ECB not to stop net asset purchases over the summer. — ING Economics 2022-04-14
Markets
Cliffwater
Chart: @ManGroup Asset performance during various US Inflationary regimes. -- Twitter from 2022-04-17
Guggenheim Investments 2022-04-13
Equities
Chart of the week No bueno -- Twitter from 2022-04-16
The travel price-comparison site Kayak says that the cost of domestic flights has jumped 38% since the year began, while international fares have risen 28%. -- Barron's 2022-04-14
Bonds
Gold, geopolitics trumping real rates at the moment (Credit Suisse) https://t.co/iFQOJcxngw -- Twitter from 2022-04-16
Bond markets now imply that inflation will average 4.4% over the next two years and 2.9% over the next decade. --Barron's 2022-04-14
Commodities
Saudi Arabia and Kuwait will develop a disputed gas field despite Iranian objections while urging Tehran to engage in negotiations. -- Aljazeera 2022-04-14
OPEC revised down 2022 global oil demand growth by 480Mbbls/d to 367MMbbls/d, which would leave total oil demand at 100.5MMbbls/d in 2022. -- ING Economics
CHINA OVERTOOK US LAST YEAR TO BECOME THE WORLD'S LARGEST OIL REFINER - CNPC RESEARCH. -- Twitter from 2022-04-12
GAZPROM GERMANIA'S BIGGEST GAS STORAGE FACILITY CURRENTLY HAS STORAGE LEVEL OF LESS THAN 1%, WHICH WILL HAVE TO BE RAMPED UP SIGNIFICANTLY BY NOVEMBER - NETWORK REGULATOR CHIEF -- Twitter from 2022-04-12
EIA: WE FORECAST THAT PRODUCTION WILL RISE TO AVERAGE 12 MLN BPD IN 2022 AND THEN TO RECORD HIGH PRODUCTION ON AN ANNUAL-AVERAGE BASIS OF 13 MLN BPD IN 2023. -- Twitter from 2022-04-12
EIA: WE FORECAST THAT CONSUMPTION WILL INCREASE BY 1.9 MLN BPD IN 2023 TO AVERAGE 102.6 MLN BPD. -- Twitter from 2022-04-12
EIA: WE FORECAST THAT GLOBAL CONSUMPTION OF PETROLEUM AND LIQUID FUELS WILL AVERAGE 100.6 MLN BPD FOR ALL OF 2022, UP 3.1 MLN BPD FROM 2021. -- Twitter from 2022-04-12
EIA: OUTPUT IS TO GROW ANNUALLY IN 2023 AT AN AVERAGE RATE OF 940K BPD VS PREVIOUS FORECAST OF 960K BPD. -- Twitter from 2022-04-12
FX
Weakness in the Japanese yen is really starting to catch the attention of Japanese policymakers, with Finance Minister Shunichi Suzuki describing USD/JPY breaking to 20-year highs as "very problematic". Clearly, we have moved into the stage of heightened surveillance, which normally precedes FX intervention. -- ING Economics
There's been lots of talk recently about weaponizing the dollar viz the sanctions on Russia and limits on FX reserves, but here's Taiwan worried about what effectively amounts to the weaponization of the Chinese yuan. https://t.co/yLSoNkc8Lt -- Twitter from 2022-04-13