It was a “sell US” day on Wednesday with equities posting notable losses while Treasuries were sold across the curve, particularly in the long end to see the curve steepen. Amid a lack of data this week (aside from Flash PMIs on Thursday) the US focus has largely been on President Trump’s Tax bill. On which, an agreement has been made on the SALT deductions, although some Republican hardliners are still worried that not enough spending cuts are included in the bill. The CBO estimated the bill would add USD 2.3 trillion to deficits over the next decade, raising fiscal fears. The equity sell-off sharply accelerated in the wake of the 20-year bond auction, which saw a chunky 1.2bps tail and soft bid-to-cover, and led to weakness in Treasuries across the curve, the Dollar and US equities. On the tax bill, House Speaker Johnson has said they will vote on the bill tonight, although the timing is TBC. In FX, the Dollar was the clear laggard with the Japanese Yen outperforming despite higher US Treasury yields. The Australian Dollar saw mild upside versus. the Dollar but retraced some of the post-RBA losses. However, the cyclical currencies (AUD, GBP, NZD) were relative underperformers, excluding the Dollar due to the weakness in US equities. Crude prices settled lower despite overnight strength on reports Israel is considering striking Iran’s nuclear facilities, but a final decision has not been made – crude pared the strength and sold off throughout the session in the risk-off conditions while the EIA data also weighed. Gold was bid as the Dollar, and stocks took a hit. Attention on Thursday looks to the Flash PMI report, and any more tax bill updates. Fed Member Hammack said sentiment data about the economy has been concerning, and that if the Fed is challenged on inflation and unemployment it will be a difficult choice. Hammack added it will take more time to see how business decisions are influenced by trade policy, and echoed the known line that right now the best action for the Fed is to sit on its hands. Fed Member Bostic said he does not expect a recession but unclear when households and firms will feel comfortable making long-run spending decisions. On the most high-profile questions, including trade policy, clarity seems to be moving further into the future. Elsewhere, Oil closed 0.82% lower while Gold continued its move higher with a further gain of 0.75%.
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For anyone following my Platinum Service it made 275 points yesterday and is now ahead by 2760 points for May after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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