Morning Brew May 21 2025

Good morning,

US Equities were negative yesterday but not very significantly, the big three indexes lost less than 0.5%  The move is a pause more than anything else inn my view as traders try to decide on the overall picture. The all time high in the S&P 500 remains in sight and a break would hint at a break higher, a rejection a turn lower. Dax closed above 24000 for the first time ever – this is worth watching.-

Other assets were much more interesting:

Yields: USYields rose on DJT`s tax bill adding 3-5 trillion in debt, 10 years are 2.52 and 30`s above 5 – not good. The Papanese 30 year Yields are at the highest this millennium,. Cause was a poor JGB auction but there seems to be fears that the huge government debt and the horrible demographics catch up.

In FX, the USD is under pressure despite rising yields and the USD Index falls below 100 to trade at 99.50. EURUSD rises to 1.1350, GBPUSD 1.3460 and USDJPY 143.55.

The Swiss Franc rises to 0.8215 against the USD, clearly a very uncomfortable level for the Swiss economy and the SNB. 

Precious Metals and Bitcoin gained: Gold is 3316, Silver 33.13 and Platinum was amazing, braking resistance and rising to 1050. Bitcoin is within grasp of all time highs: we are at 108050.

We have a few key articles to light the confusion:

With the agenda basically empty today, traders will focus on news and general sentiment, be cautious and avoid complacency!!

Ole On Gold and and Platinum:

• Platinum, an almost forgotten metal that has for a long time been struggling for momentum, shows signs of life with key upside levels being challenged.
• Having traded sideways for the past decade while gold surged higher in recent years due to strong central bank demand, the ratio between the two metals has during this time gone from 1:1 to 3.2:1. That is, one ounce of gold now costs the equivalent of 3.2 ounces of platinum.
• The positive sentiment is being supported by a report forecasting a deepening market deficit, with supply outstripping demand by close to one million troy ounces, marking the third successive year where above-ground inventories are being drawn upon.
• A resurgence in Chinese demand for jewellery, bars, and coins culminated last month when Chinese jewellers and investors imported the largest amount in a year due to its relative stability and cheapness compared to gold

John`s Makro View:

Markets have been unforgiving for both bulls and then bears over the last few months. Now that we have come full circle in at least US equity markets if not the US dollar, it’s worth considering a few rules that may help investors and traders navigate this new era for global markets, which is likely to remain quite volatile.

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Wednesday, May 21

- Economic:

  - Japan: Trade Balance)

  - UK: CPI (Apr)

  - US: Treasury 20-year auction, Fed speakers: Barkin, Bowman, Williams[2][5][7]

- Earnings:

  - Baidu (BIDU)

- Target (TGT)

 - WIX (WIX)

- Zoom (ZM)

- Snowflake (SNOW)

 Thursday, May 22

- Economic:

  - International PMI

- US: Initial Jobless Claims, Chicago Fed National Activity Index, Existing Home Sales (Apr)

  - Japan: Machine Tool Orders (Apr)

  - Japan: CPI (Apr)[2][5][7]

- Earnings:

  - Ralph Lauren (RL)

  - Toronto-Dominion Bank (TD)

  - Autodesk (ADSK)

  - Copart (CPRT)

  - Deckers Outdoor (DECK)

  - Intuit (INTU)

  - Workday (WDAY)[6]

Friday, May 23

- Economic:

- Japan CPI 

- Germany GDP

- US: New Home Sales (Apr)

  - Canada: Retail Sales (Mar)

  - UK: Retail Sales (Apr)[2][5][7]

- Earnings:

  - Booz Allen Hamilton (BAH)