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Markets: Death of Fiscal Dominance

“Real worries in the region that the recent strength in US CPI, reinforced by ongoing resilience in the economy, will mean a Fed that can only barely cut this year"
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Housekeeping: Good Morning.


“Real worries in [Asia] that the recent strength in US CPI, reinforced by ongoing resilience in the economy, will mean a Fed that can only barely cut this year’

NatWest Global Head (prem)


Contents

  1. Current Prices

  2. Yesterday’s Activity

  3. Data Due

  4. News

  5. Markets/Metals Commentary

  6. Attached: NatWest and ING on Commodities


Chart of Day:

Speculators have reduced their commodity positioning significantly and the markets are still buoyant


Yesterday’s Activity:

  • Precious Metals- gold buying went to market, Silver hedging

  • Oil/NG- big move, but range bound

  • US equities-very strong

  • Bonds- very strong

  • DX- stable

  • Crypto-stable


Week’s Data:

  • MONDAY, FEB. 26 New home sales

  • TUESDAY, FEB. 27 Durable-goods orders

  • WEDNESDAY, FEB. 28 GDP (first revision)

  • THURSDAY, FEB. 29 PCE index 0.3% 0.2%

  • FRIDAY, MAR 1 S&P U.S. manufacturing PMI

Full calendar1


News:

Top MSM News Links Here

NOTABLE HEADLINES

  • "Warren Buffett has warned Berkshire Hathaway shareholders that his sprawling $905bn conglomerate has virtually “no possibility of eye-popping performance” in the years ahead, laying bare the challenges that will confront his successors

  • "The AI chip battle that Nvidia has dominated is already shifting to a new front—one that will be much larger but also more competitive

  • "Apple has explored the idea of developing new wearable devices — including a fitness ring, smart glasses and even AirPods with cameras

GEOPOLITICS

  • Israeli PM Netanyahu said that they are all working on a hostage deal

  • Israel’s Defense Minister said there will be no let up in Israeli action against Lebanon’s Hezbollah movement

  • White House National Security Adviser Sullivan said Israel, Egypt, Qatar and the US came to a basic understanding of the basic contours of a hostage deal for a temporary ceasefire

  • US military aircraft intercepted a balloon over Utah on Friday which was said to be small and not manoeuvrable, while the balloon was allowed to continue flying as the US concluded the balloon was not a threat to civil aviation or national security.

  • Ukrainian President Zelensky said he hopes a peace summit in Switzerland will take place in spring

  • Ukrainian President Zelensky said a US aid package is needed

  • UK PM Sunak called for Western countries to be more aggressive in seizing frozen Russian assets and passing the proceeds on to Ukraine to finance its defence, according to Bloomberg.

  • Russia’s Deputy Foreign Minister said contact with the US over nuclear weapons in space has proven to be unproductive

Some headlines via NewSquawk


Markets/Metals Commentary (Charts):

Comment:in March RRP will likely run empty closing out a source of liquidity used to finance the incessant treasury issuance needed to finance this Fiscal Dominance everyone is talking about. When that happens in combination with the BTFP closing its doors, you may see Yellen’s DoT put Powell once again in their cross hairs pressuring to ease

  • Gold- below 2024 look out, close above 2041 look up

  • Silver- short, short cover, repeat cycle

  • Oil- stable with a lot of selling

  • Stocks- reminds me of 2013-2015

  • BTC/ETH- rotation seems toppy short term

  • Bonds- may begin to reflect RRP ending and govt shutdown fears

Premium Attached:

GoldFix
Real Worries About US CPI
Weekly Thematic Review Global Head of Desk Strategy John Briggs As this note goes out in the middle of a two-week trip to Asia, I'll keep it a bit briefer than the usual. I won't bury the lead: there is some real worries in the region that the recent strength in US CPI, reinforced by ongoing resilience in the economy, will mean a Fed that can only barely cut this year – and the view that the skew of risks even around that would be to less cuts than just a couple 25bps rather than more…
Read more

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