Premium: **Very nice slide deck by MUFG at Bottom**
Commentary: Geopolitics
Markets Yesterday:
US equities retreated on Thursday as investors weighed positive economic data against the timing of Fed rate cuts.
Premium/Markets: China Tipping Point
The Hope: Biden’s financial path to re-election.. low oil, no opec fights, ignore geopolitics, deflect Israel, inflation down, sticks up, gold down. . he will talk about it when it happens… have seen this before
The Fear:Russia/China make it so geopolitics cannot be ignored
The Reality: Biden may be focused on the economy when the Geopol situation is about to blow up
Russia
Russian President Putin is reportedly ready to halt the war in Ukraine with a negotiated ceasefire which recognizes current battlefield lines, according to Reuters sources; but is prepared to fight on if Ukraine and the West do not respond
China
China on Friday sent multiple bombers to conduct mock missile strikes in the Taiwanese drills, with dozens of missiles used in the drills, according to Chinese state media.
The Weird Part
China did not notify anyone 72 hours prior.- they normally do as a courtesy
China also didn’t give specific coordinates of the affected areas this time, also odd
Military contact said within the first 30 minutes all of Taiwan’s radar, missile silos and runways would already be destroyed
US 7th fleet can’t get here in time, and even if the fleet arrives, they’ll keep a safe distance and just watch otherwise all sunken ships basically
Japan won’t do anything due to Russia and NK on the north while DF-17 (the guam express) taking dead aim.
The Timeline
Russia confiscates G7 Assets
Russia/ China joint statement
Russia offers a truce?
China lays down a Gauntlet
Market News:
"Elon Musk’s SpaceX has initiated discussions about selling existing shares at a price that could value the closely held company at roughly $200 billion. Source: Bloomberg- business in space
"The US Securities and Exchange Commission has paved the way for the potential launch of eight exchange traded funds tied to the world’s second-largest digital coin. Source: FT- We’ll have a comment on that this weekend for premium subscribers focused on the trade potential on this news
"Federal Reserve Bank of Atlanta President Raphael Bostic said monetary policy has been less effective in slowing growth than in previous cycles, reinforcing the need to keep rates higher for longer to curb inflation." Source: Bloomberg - fiscal monetary not cooperating, with the passive goal of diminishing monetary importance.. a la MMT
Geopolitics:
Israel’s PM and ministers decided to expand the mandate of the negotiating team during the war cabinet meeting on Wednesday night
Ukrainian President Zelensky is set to attend the G7 leaders meeting in a fresh push for aid,
Japan imposed sanctions against Russian-related entities and an individual. It was separately reported that South Korea imposed sanctions on seven North Korean individuals and two Russian vessels.
Azerbaijan takes control of four villages on the border with Armenia, according to Tass
Some headlines via NewSquawk or DataTrek
Data on Deck: Chill Out
MONDAY, May 20 Speakers
TUESDAY, MAY 21 Speakers
WEDNESDAY, MAY 22 2:00 pm Minutes of Fed's May FOMC meeting (stale)
THURSDAY, MAY 23 PMI May 51.6 51.3 9:45 am
FRIDAY, MAY 24 8:30 am Durable-goods orders April 1
