Morning Macro 3rd September
Gold, another new all-time high $3,546 but the concern is the long-end bond market rout is intensifying. Today Japan’s 30-year bond yield jumped 5.5bp to a record high at 3.285%. (Chart 1, TradingView). There’s clear signs of a bond crisis emerging here with France’s 30-year yield hitting 4.5%, its highest since 2009, German 30-year yields reached 3.4%, the highest since 2011, and U.K. yields to 5.69% — the highest since 1998. Watch for a spike in volatility (MOVE Index for bonds)
With US 30-year approaching 5.00% equities fell yesterday with the Nasdaq 100 bouncing off clear support, but a break below $22,960 will see stops triggered, CTAs at 100 percentile max long selling and volatility will spike sharply. (Chart 2, TradingView).
Equity market favourite Nvidia also gapped lower bouncing off key support $168.7, again a close below here will see aggressive selling. (Chart 3, TradingView)
US factory activity shrank in August for a sixth straight month, driven by a pullback in production. With only 2 industries reported growth in employment in August (Chart 2, Bloomberg). There were some positives though, Orders expanded for the first time since the start of the year, with the ISM gauge of new bookings jumping 4.3 points, the largest increase since the beginning of 2024, to 51.4. A measure of prices paid for raw materials declined to 63.7—still elevated but the lowest since February.
Employment 43.8, Exp. 45.0
New Orders 51.4, Exp. 48.0
Prices Paid 63.7, Exp. 65.0
*TRUMP: WE’LL GO TO SUPREME COURT TOMORROW ON TARIFFS APPEAL *TRUMP: NEED AN EARLY DECISION FROM SUPREME COURT ON TARIFFS *TRUMP: WE’LL ASK FOR EXPEDITED RULING ON TARIFFS
*TRUMP: WE NEED A VERY SERIOUS RATE CUT
XI WARNS WORLD AT CROSSROADS OF ‘PEACE OR WAR’ AS TRUMP ACCUSES BEIJING OF CONSPIRING AGAINST U.S.
Construction spending has fallen in 10 out of the past 11 months (Chart 4, TradingView)
Todays data – July JOLTS Jobs data, EZ & UK services PMI, Australian GDP
