Housekeeping:
Remember the Toilet paper panic during Covid?
Now imagine that for Gold…
Today:
Premium Analysis: China RMB Usage Surges to New ATH
News: PCE Release, no surprise is a surprise
Premium Markets:
China’s international use of renminbi surges to record highs
China's use of the renminbi in cross-border transactions has reached record highs this year, as closer ties with Russia bolster Beijing's efforts to internationalise its currency and cut dependence on the US dollar.
In July, 53 per cent of China's inbound and outbound transactions used the Chinese currency, according to data from the State Administration of Foreign Exchange, up from about 40 per cent for the same month in 2021.
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PCE Day- PCE Release, no surprise is a surprise
PCE is today. markets are not focused on this at all, and are instead looking at unemployment next Friday now as they feel the disinflation story is baked in.
Bloomberg’s Consensus Poll: expects monthly core PCE unchanged at0.2% MoM and annual core PCEat2.7% YoY
Core 0.2%/ mo 2.7% Yoy
BOA estimates:
Headline: 0.17%/ mo; 2.6% yoy
Core: 0.19%/ mo; 2.7% yoy
Goldman says:
Today the focus will be on core PCE and think the possibility of much of a meaningful surprise is low.
Reminder to Wall street : The definition of surprise is you don’t see it coming.
Reminder to Main Street: when Wall St tells everyone they don’t see a likely surprise is really saying they’re very confident in their work…which can lead to complacency which is how surprises happen. Stay vigilant kids
Equity Recap:
The Dow Jones Industrial Average closed at a record high on Thursday, but a selloff in Nvidia (-6.38%) weighed on the Nasdaq Comp and S&P 500. Large caps lagged small caps: S&P 500 (0.00%) vs. Russell 2000 (+0.63%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) added 0.05% and 0.38% respectively.
Market News:
"Lower-income American households are running out of money at the end of every month, the discount retailer Dollar General said as it released dismal results that drove its shares down almost 30 per cent. FT
"Shares in Nvidia were down by more than 5 per cent on Thursday afternoon as the chipmaker’s latest earnings report failed to live up to Wall Street’s lofty expectations, despite revenue more than doubling in the last quarter. FT
"Apple is in talks to invest in OpenAI, a move that would cement ties to a partner integral to its efforts to gain ground in the artificial-intelligence race. WSJ
"The US economy grew at a slightly stronger pace in the second quarter than initially reported, reflecting an upward revision to consumer spending that more than offset weaker activity in other categories.Bloomberg
"Employment gauges in a fresh batch of regional Federal Reserve bank surveys are emblematic of the risks to the US job market prompting the central bank’s turn toward interest-rate reductions. Bloomberg
Politics/Geopolitics:
US Democratic Presidential Candidate Harris said prices are still too high and added she will not ban fracking as President, via CNN
US Republican Presidential candidate Trump said he would make government or insurance companies pay for all costs associated with IVF treatments if elected, according to Reuters
"Lebanese sources: Israeli raids on different areas in southern Lebanon", according to Sky News Arabiya.
Missile attack launched on US military base in eastern Syria, according to IRNA.
There is now a planned call at the theatre commander level between the US and China, according to Fox's Heinrich. "It comes after China bristled at US Indo-Pacific Command's Adm. Paparo suggesting this week US forces could escort Philippine ships through the South China Sea, following a months-long series of violent confrontations between Chinese and Philippine ships".
Israeli military says local Hamas commander in West Bank City of Jenin killed by Israeli police.
Some headlines via NewSquawk or DataTrek
Data on Deck: PCE, Housing, and Gaggle of Fed Speakers
MONDAY, Aug. 26 Durable-goods orders Daly interview
TUESDAY, Aug. 27S&P Case-Shiller home price index
WEDNESDAY, Aug. 28 6:00 pm Atlanta Fed President Raphael Bostic speech
THURSDAY, Aug. 29 Trade, inventories, home sales 3:30 pm Atlanta Fed President Raphael Bostic speech
FRIDAY, Aug. 30 PCE1
Final Market Check…
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