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One deal closer to the AI capex endgame.
Summary: Today, a fresh burst of speculative energy in the AI space on the OpenAI - AMD deal, which has generated some of the funnier takes from market observers as the level of absurdity is getting worse here. The deal is the latest step forward in what one observer has called the "AI capex endgame". We also talk the latest geopolitical bits and pieces, a series of must reads for whether this is an AI bubble and how it unwinds if so, macro and FX and much more. Today's pod hosted by Saxo Global Head of Macro Strategy John J. Hardy.
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Today’s Links
This is crazy stuff - a plot in NYC to disable mobile networks by mass accumulation of SIM cards and using equipment to send as many as 30 million texts a minute using special equipment. Supposedly a China link - huh? Bloomberg’s worthy John Authers weighs in on French political situation and whether it can remain a slow burn (Putin’s present at the eastern Eurozone border is one factor preventing more outrage from other Eurozone powers), the JPY carry trade and Takaichi in Japan and more. Seems very anecdotal, but supposedly US supermarket shoppers are going back to basics to save money - fits with indications that a significant swatch of medium to lower income levels are suffering here. The latest Felder Report has its own links in turn on how we assess whether we are in an AI bubble and how it could possibly unwind if so. The JPY has stolen most of the limelight in currencies lately, especially on the weekend plunge on Takaichi’s ascension to the top of the LDP as she is seen as a monetary policy dove - fairly or not. Meanwhile, we have French political dysfunction to consider in Europe and this morning weak German factory orders the latest reminder of the country’s stranded and defunct heavy-industry based economic model. It feels like the euro could come under further pressure here if the market can pull its eyes away from Japan for a bit here - sending EURUSD on the correction path back towards at least 1.1500 if the 1.1573 range support breaks and perhaps lower still on a further general USD back-up. Chart of the Day - EURUSD on tilt?
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