James Brodie
Head of Learning & Development, Flux
Strong Data Boosts Yields, Fiscal Stimulus, Critical Minerals
Strong global data kills Fed cut hopes as yields rise; fiscal stimulus builds, metals & uranium surge, dollar at key support, bond risks
More strong data pushing short end yields higher. Today we had Japanese flash PMIs jump from 51.1 to 52.8. UK retail sales +3.1% YoY (est 1.4%), strong Aussie PMIs, higher than expected NZ inflation.
Also yesterday saw U.S. personal spending jump 0.5% MoM (secondary data but a big move) with strong jobless claims numbers and PCE inflation rising (as expected) to 2.8%. The Fed will NOT cut in this environment, economic data is coming out stronger globally, Australia and NZ have 48bp & 51bp of hikes this year, the US -43bp cuts priced by the OIS market will not happen, and is priced due to Trumps political Fed motives.
Add in more fiscal stimulus. U.S. House passes additional $1,200,000,000,000 trillion spending package for the Pentagon, Education, Transportation, Health and Human Services, and Homeland Security Department
Gold up 2% yesterday, silver +3.3%, platinum +6.2% and new all-time highs again today. Gold RSI at 95 is massively overbought, the correction will be huge, but for now it’s still trending (trailing stops).
Uranium (AI power demand) continues as a theme too, uranium +4.2% yesterday and +1.4% today on as Trumps says the U.S. is going heavy into nuclear energy. US Department of Energy commits $2.7 billion to uranium enrichment and $800 million to accelerate SMR deployment (small modular reactors). The next wave of hypergrowth is nuclear energy. Corresponding stocks going bid again: upstream uranium miners & fuel processors like Cameco, Energy Fuels, Centrus Energy that supply the raw fuel. Midstream reactor & Small Modular Reactors (SMR) builders like, BWX Technologies, Nano Nuclear Energy, NuScale Power & Oklo, that turn fuel into capacity. Downstream utilities like Constellation Energy, NextEra Energy, Talen Energy & Vistra that convert that fuel capacity into grid power.
Critical minerals will face significant supply shortfalls over the next decade: Copper: -33% deficit, Lithium: -38% deficit, Nickel: -15% deficit, Cobalt: -14% deficit, (Chart 1, IEA, Global critical minerals outlook)
TRUMP: WE HAVE A MASSIVE ARMADA HEADING IN DIRECTION OF IRAN - oil ticks higher.
A long-term chart to watch, the U.S. dollar sits on a 15-year support line. Make or break! With big impact on the precious metals trade. (Chart 2, Bloomberg)
But while U.S. growth continues, that suggests U.S. dollar recovery (Chart 3, @Geo_Papic)
Liquidity in Japan's government bond market is the worst on record. The bond scare will resurface shortly. (Chart 4, Bloomberg)
Intel stock falls -6% despite reporting stronger than expected Q4 2025 earnings.
Tesla Europe - Sales so far this quarter down 55.20% from 2025 and a massive 74.78% from 2024.
UK BUDGET DEFICIT £11.6 BILLION IN DEC.
Data today: Global flash PMIs
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