Market Report.
📅 The day is approaching when we will learn the US employment figures (tomorrow). That is why it is crucial to analyse the situation in the labour market and, most importantly, whether this could lead to changes in Fed policy.
🏛️ White House economic adviser Kevin Hassett says U.S. job gains could be lower in the coming months due to slower labor force growth and higher productivity, rather than a weakening economy.
📉 Hassett cites factors like tighter immigration policies under President Trump and rising worker productivity as reasons why monthly job growth may slow, even as GDP growth remains strong.
🏦 This view aligns with comments from Federal Reserve Chair Jerome Powell, who has described the current labor market situation as “very challenging and quite unusual” due to falling demand for and supply of workers.
⚖️ The Fed faces a dilemma in interpreting the slowdown in job growth – if it is due to supply constraints, it could signal higher inflation risk; if it’s due to weak demand, it may warrant interest rate cuts to support growth.
🧠 Incoming Fed Chair nominee Kevin Warsh has also suggested that higher productivity growth could influence the Fed’s policy decisions, potentially reducing the need for aggressive rate hikes.
🇺🇸 A member of the Fed admits that Trump’s tariffs are not having the impact they said they would.
📦 Federal Reserve Governor Stephen Miran argued that the Trump administration’s trade tariffs have proved more benign than many had feared, with foreigners and their firms primarily bearing the burden rather than American consumers.
🧾 Miran suggested that accounting issues may make it appear that U.S. entities are bearing the tariff burden, when in reality it is often the U.S. subsidiaries of foreign companies. He argued that tariff revenues are helping to improve the government’s fiscal outlook by reducing the primary deficit.
🇪🇺 Meanwhile, ECB President Christine Lagarde stated yesterday that euro zone inflation is expected to stabilize at the ECB’s 2% target after dipping below it this year. Lagarde said the ECB’s “data-dependent, meeting-by-meeting approach to monetary policy serves us well” in the current uncertain environment.
🔍 This suggests the ECB will continue to closely monitor economic data and make policy adjustments accordingly, rather than committing to a specific path for interest rates or other measures.
📈 Lagarde’s comments indicate the ECB believes inflation in the euro area will return to the 2% objective over the medium term, after a period of lower inflation.
🏛️ ECB policymaker and President of the Bundesbank, Joachim Nagel stated that the ECB’s current policy rate of 2% is at the right level, despite a recent dip in euro zone inflation to 1.7%.
💭 However, I think this is a good time to remember the conservative economic principles on which the EU was founded.
📜 From its early years, the European Central Bank defined price stability as a maximum inflation rate of 2%. Only since 2021 has it considered that the ideal is around 2%, above or below. These are important factors that affect the value of Europeans’ savings.
🤔 It is ironic that the president of the current European Central Bank speaks of 2% inflation as a desirable level and the need to increase it.
🌏 Remember when the ECB said that excess Chinese products that could not be sold to the US due to tariffs could cause deflation in Europe due to a flood of products? Well, the Bank of England thinks otherwise.
🇬🇧 Bank of England policymaker Catherine Mann stated that China is raising export prices to the UK due to the tariffs imposed by the U.S. under President Trump’s trade wars.
📊 Mann argued this is contributing to inflation in the UK, as China lowers prices for exports to the U.S. to retain market share, but raises prices for other markets like the UK to recover the cost of the U.S. tariffs. In other words, cutting prices to the US to stay competitive, and raising them to everyone else.
📉 Mann said the Bank of England has incorporated the assumption that the U.S.-China trade war is pushing up import prices and inflation in the UK in its latest forecasts.
🐎 Mann expressed concerns about the UK’s weakening economic activity and productivity growth, describing the economy as a “horse and pony” rather than a “race car.”
🏭 While there has been some trade diversion to the UK, Mann said the damage to domestic industry is less severe than in Europe, which has seen more significant trade diversion.
🛢️ Regarding the commodities market, yesterday We commented during my appearance on Comercio TV Miami that, rising geopolitical risks are leading to hoarding across commodity classes, driving a rotation away from the “new economy” tech sector and towards the “old economy” asset-heavy industries like oil and metals.
🔁 Remember that for months I have mentioned that this factor would occur in our reports. Some have called it Bretton Woods III, the return of wealth to tangible assets and the departure from financial assets.
📰 News in the world: Bitcoin recycles miners to data centers. Morgan Stanley has initiated coverage of two bitcoin mining companies, Cipher Mining and TeraWulf, with “overweight” ratings and price targets implying over 150% upside potential.
🏗️ The investment firm believes these companies have significant upside potential as they pivot from bitcoin mining to building data centers to serve the growing demand for AI compute power.
🤖 Morgan Stanley analysts cite a systematic shortage of AI compute-related supply and rising demand from hyperscalers as driving factors that will allow these former bitcoin miners to command higher premiums for their “time to power” data center solutions.
📉 Despite the recent downturn in the bitcoin market, Cipher and TeraWulf shares have outperformed the cryptocurrency, suggesting investors see value in their pivot to the data center business.
Geopolitics.
📂 The Epstein files, despite being heavily redacted and incomplete, are still sufficiently damning in revealing the corruption and depravity of the ‘elite’ ruling class.
🕵️ Online sleuths have been able to connect dots, solve cold cases, and shine a light on the worst crimes committed by Epstein and his associates. However, Western governments have shown near-total inactivity in conducting their own investigations.
🧩 Some analysts believe that this is because Epstein “belongs to intelligence”, meaning he was operating for a strategic, long-term purpose on behalf of intelligence agencies.
💔 The Epstein scandal has ruptured the trust between the people and the ruling elite in Western societies. The exposure of the complete amorality and venality of the elite circles around Epstein has undermined the moral foundations and “architecture of moral stories” that previously anchored Western civilization.
🧑🎓 The Epstein scandal marks a rupture between the people and the ruling strata, with young Americans realizing their institutions have failed them and the system is rigged by a handful of super-rich.
🇷🇺 Russian Foreign Minister Sergey Lavrov has accused the US of trying to take control of all international energy supply routes in an attempt to attain global economic dominance.
⚡ Lavrov stated that the US objective is “to dominate the world economy” and is using “coercive measures that are incompatible with fair competition” to achieve this.
🛢️ As part of this, the US is “eyeing” key energy infrastructure in Europe, such as the Nord Stream pipelines, the Ukrainian gas transportation system, and the TurkStream pipeline.
🚢 The US has also imposed sanctions on major Russian oil companies like Lukoil and Rosneft, and is waging a “war against tankers in the open sea” to restrict energy trade.
🌐 The US is forcing countries like India to stop buying affordable Russian energy and instead purchase more expensive US LNG, threatening secondary sanctions and tariffs.
🤝 This is driving Russia and other BRICS countries to seek alternative arrangements.
Market View.
📊 E‑mini S&P 500 futures continue to advance towards the 7,000‑point level, briefly touching it during yesterday’s session. Nasdaq 100 futures approached 25,500 points before easing slightly to around 25,345 points.
💵 The US dollar continues to retreat, with the DXY index now trading below 97 points. As a result, EUR/USD is currently trading around 1.19.
🇩🇪 In Europe, DAX 40 futures have moved back to the 25,000‑point level following yesterday’s comments from Christine Lagarde. Euro Stoxx 50 futures have also embraced the renewed optimism, pushing to fresh highs around 6,075 points.
🛢️ The oil market has resumed its upward move, with spot Brent crude trading around $69 per barrel.
🥇 Meanwhile, gold futures reached $5,100 per ounce during yesterday’s session before easing slightly to around $5,060 per ounce.
₿ Finally, Bitcoin has once again come under pressure, retreating to around $68,800, and continues to struggle to recover from the recent sell‑off.
