Below find the 2 ,1 and 10 year inflation breakevens, approaching the levels in late February , Inflation expectations not accelerating just getting back to trend

On the other hand the US 5y5y inflation swaps at new YTD highs and then some..

Europe’s 5y5y inflation swap below has yet to break out to new YTD highs ,today’s miss in Germany’s CPI data,headline the lowest in 10 years (BBG) is more evidence that ECB will likely need to do more to Goose Inflation higher. Well what they have been doing in the past really isn’t working now is it? so something has to change I believe. next ECB meeting Dec 10th some type of new stimulus is expected and if Euro stays>1.20 some verbal intervention likely as well


Moderna out with More positive Vaccine News, markets have already priced this, so very little reaction occurred. The law of Diminishing returns regarding vaccine news in play with that in mind a problem or a setback with the vaccine would likely have an impact on the trade.

 Month end and for some Big Funds year end. Some impressive run this in Month in Global stock Indices MSCI world index +13% best month ever, CAC and MIB best month ever +20% Dax best Month since 2003, FTSE second best month Ever. Some other stats   Greek Bourse +29%, Spain +27% now Compare to SPX and NDX +11% But Russell best month ever +20% as of this morning. NKY best month since 1994, South Korea best since 2001One last bit Copper best month since 2016. On the flip side For the Month Spot Gold -5.75% worst month 4 years and Silver -6%, But platinum +15%. The no stimulus trade has taken the wind out of Both Gold and Silver.

 Dollar lower, Euro attempting to break above 1.200 if so, with momentum watch for some verbal intervention from the ECB. OPEC meeting today and tomorrow   to decide if they will delay production boost, watch for tape bombs you know the drill.


  • A reminder that credit leads equity. CCC-rated bonds are on a tear. Bonds issued by low-rated companies in the US have rallied 7 per cent this month, one index of triple C bonds shows — the biggest jump in more than four years. In Europe, junk bond yields have fallen from over 8 per cent in March to almost 3 per cent as prices have risen, with November providing the bonds’ best performance since April. (FT) ◘ New highs keep piling up. There were more new highs in November on both the New York Stock Exchange and the Nasdaq than we have seen since early 2018.
    The NYSE Stocks-Only Advance/Decline line just went out at an all-time weekly closing high. All-time highs last week in Semiconductors (SMH), Software (IGV), Cloud Computing (SKYY), and Internet (FCN). The S&P 500 closed on Friday at an all-time weekly closing high and the Nasdaq notched its 45th record close of the year. =Mizuho
  • China PMI data once again strong Services 8 1/2-year highs Manufacturing 3-year highs
  • More Biden cabinet announcements

Morning 11-25

 Narrative Today Sideways lacking macro driver, Volume in treasury complex light a Holiday Themed market. Dollar Index traded below this week’s lows but no momentum to downside.

Oil  bull Run continues..  from trading Economics “Crude oil futures rose more than 1% to trade around $45.5 a barrel on Wednesday, remaining close to an over eight-month high touched early in the session as prospects that a coronavirus vaccine could be used soon raised hopes of a quicker fuel demand recovery. Also, a possible delay in OPEC+’s planned production increase in January and the formal start of Joe Biden’s transition to power added to the upbeat mood.”   CL +26%  MTD

 Gold, Silver bouncing a bit Dead cat in nature I believe. Chatter that  investors are  using Bitcoin as the flight to safety instead of Gold passes the eye test. In Europe both Energy and bank Index Down   ~1% or so Russel lower as well and Nasdaq higher so a pause in the rotation trade. Spoos Steady 30 handle range not so bad. NKY closed +.5% CSI 300 -1.2%. Dow did close >30k yesterday All-time highs. Just released Jobless claims increased for second Consecutive Week haven’t seen that since Mid-July.


Mortgage applications in the United States surged 3.9 percent in the week ended November 20th, after falling in each of the previous two weeks, data from the Mortgage Bankers Association showed. Homebuyer mortgage applications rose 3.5 percent and those to refinance a home loan surged 4.5 percent. Trading economics

US home prices at an all-time high (up 7% over last year); US mortgage rates at all-time lows (2.72%); Homebuilder sentiment at record high (90); Home sales at highest level since ’06, building permits at highest since ’07. -Mizuho


  • FedEx and UPS face a shortage of Delivery vans amid surge in E-Commerce -BBG   an increase in prices coming?
  • China pork meat production seen rising 12 % in 2021 -Rabo bank
  • Cocoa rally, squeeze running out of Steam prices down some 3.5% today after an 8-day run
  • DB warning of too much bullishness for Stock Investors
  • China hinting of a new probe into Electric Vehicles-@delta one
  • House and Senate negotiators have until Dec. 11 to reach agreement on the dozen annual spending bills, hold floor votes in the House and Senate, and get Trump to sign the package before a temporary funding bill expires
  • Bitcoin =$19,400
  • Deere and Co projected higher earnings for year ahead-Bbg why not with Soy and and corn show no signs of topping out just yet
  • Germany to tighten lockdown restrictions UK and France to Loosen

Financial Conditions

NY fed president Williams just mentioned that Financial conditions are not tightening.Below Bloomberg Financial Conditions for the US ,moving towards the late February Highs

Williams also want on to repeat What we have heard before “Fiscal policy most powerful tool over next 6 months” Fiscal policy plays important role Supporting Economy” but what caught my Eye and I believe markets eye is this “Dominant Fed bond buying role now to support Economy” he doesn’t say Stimulate economy just support thus the plea for more fiscal Stimulus. Long end trading lower and Continue after his comments. is this A Hint that Any increase in Bond buying might be short of what markets expect?? possibly

3 minute chart Bonds


Crude Light,Cl continuation chart up through resistance optimism high about Future growth

Dec/Dec backwardated ever so slightly , the benchmark spread trading on future demand expectations

Brent Z1-Z2 closer to zero or Backwardation anti- lock down trade i will look at Correlation with Russell

Morning 11-24

 The buying program continues as markets cheer Vaccine news and Yellen to treasury as hopes of everlasting Stimulus grow. Gold not responding to Market theme as I would imagine, Lower dollar, Likely more fiscal stimulus. Hmmm maybe smart money moving into Bitcoin +4.75% today almost breaching $19,500 all time highs in Sight.  Also, more “returns “in Bonds Stocks?  ETF flows continue to decease for all Gold Funds, technical are bearish as short-term MA’s are crossing longer term. Gold -1.75% Silver -2.2% The buy precious metals trade being Unwound

 Russell continues to outperform  Small caps vs Big caps, value vs  Growth cyclicals vs momentum  whatever  Lockdown Stock vs non lockdown stocks  Nasdaq Sideways Month to date Russell double digit growth. So far today  Spoos +.8% Dow +1.1%,Stoxx 50+.9%,Cac +1.3% Dax a bit of a laggards +.6% proxy For Cyclical stocks in Europe Energy Sector +3.9%. NKY closed +2.5%

 Oil and Copper optimistic about a reflation /vaccine/ Stimulus trade both higher today Dollar index lower , but yesterday’s lows still in play, Euro almost broke above 1.119 andJPY sideways after yesterday’s aggressive sell off. US yield curve a bit steeper Long end yields up short end steady all else equal this shows optimism about economy. Bunds sideways.


  • The GSA has released funds for the transition of power to Biden Staff, indicating that he is the Winner of the election
  • German Q3 GDP revised higher
  • Virus Cases in Europe continue to Ease (trading economics)
  • Not a surprise Record airline Losses will continue next year -BBG
  • Elon Mush is Now the second richest man in the World
  • Best buy earnings beat but gave no forecast for holiday season
  • Heavy roll activity in treasury Complex continues
  • Singapore has reached 14 days without local cases of coronavirus; Vietnam is approaching 3 months
  • Germany’s DAX Index Announces Biggest Overhaul Since Inception, Expanding From 30 To 40 Companies
  • President trump Retweeting the crazy brother in law from vacation movies regarding election Fraud
  • Home prices see biggest spike in 6 years in September, according to S&P Case Shiller

Call it what you Like

post PMI data from Markit NDX steady to lower RTY higher, Rotation in vogue so far this morning 1 minute chart below of Cash

Comments from Composite PMI release “PMI data powered ahead with fastest growth since 2015″ ” the upturn reflected a further strengthening of Demand which encouraged firms to take on staff at a rate not previously seen since 2009″-BBG Out of Nasdaq into Russell Bonds heavy , Dollar rallying hard, Yuan new lows , it appears some JPY stops triggered as well A large reversal in currency space from early morning activity, Dec & Feb Gold new contract lows

Month to date Nasdaq +6-7% RTY ~+17%

Morning 11-23

Friendly for Stocks/Risk

 For the 3rd consecutive Monday positive vaccine news, this time from AstraZeneca, maybe not as hopeful as the prior two from Moderna and Pfizer, but still it prevented a majority of people from getting the disease.  BBG

U.S. government debt just experienced its best week since August, with expectations growing that the Fed may boost Treasury purchases and/or extend maturities of the securities it buys through its main QE program because of the dispute with US Treasury Secy Steven Mnuchin. Another record set last week for the Fed’s balance sheet, which has now reached $7.24 trillion -Mizuho ………..FOMC meeting 12-16

Dollar index, DXY trading below Support at roughly 10-week lows watch 91.746 2020 lows. A broader measure of the Dollar Is the Bloomberg Dollar index that is trading at 2.5-year lows


Surprisingly, Copper down on day .8%, a month’s long strike in Chile ended possibly weighing a bit on prices Silver -.9% gold -.4%. Gold trading below the 8 day, 50 d and 100 d MA less stimulus talk =lower Gold regardless of what dollar is doing Golds skew continues to trade in Favor of puts not to many bullish factors for gold. What is Bullish IS Soybeans up another 60 ticks, with today’s highs smack on $12. Bonds a bit lower besides the risk on move $197 B of paper will be sold this week, probably won’t cause too much of a fuss. Bonds -15 ticks, Bunds -18. One of the biggest moving assets today GBP

 Fridays Cattle on Feed report leans bullish For Feeder cattle, take note that prices closed lower for three consecutive days into Friday Settle. From pro Farmer “Chinese Pork imports still running well ahead of year -ago”


  • A fresh risk to be monitored – the expiration of the Fed’s 13(3) lending programs on December 31 – underscores our view that monetary and fiscal support for the economy shifts from largely proactive in 2020 to largely reactive in 2021 Morgan Stanley
  • “The American Consumer Is Flush with Cash After Paying Down Debt.” (Bloomberg).
  • Brexit: Rumors of a “temporary deal” in the works to be agreed this week
  • UK November flash services PMI 45.8 vs 42.8 expected
  • United airlines today will issue a new share offering