The United States: The state-level Sahm rule is rising again, with over 30% of states reaching the recession signal threshold. This acceleration contrasts with the broader labor market narrative, where unemployment remains low.
Rates: Since 2023, Treasury yields have become significantly more sensitive to core CPI surprises, with both 2-year and 10-year yields reacting sharply to inflation data. This suggests that markets now expect a more forceful Fed response to inflation fluctuations than in previous years, reinforcing the importance of upcoming CPI releases for rate expectations.
Commodities: Gold inventories at Comex warehouses have surged as a physical squeeze in Europe pushes more metal into the U.S. Meanwhile, gold lease rates have spiked, reflecting heightened demand for bullion and a reluctance to lend.
The United Kingdom: The UK’s long-term public debt trajectory is highly sensitive to productivity growth, with lower productivity scenarios leading to unsustainable debt levels. Past productivity forecasts from the OBR have tended to be overly optimistic, raising concerns about the feasibility of baseline debt projections.
Emerging Markets: Argentina’s trade surplus nearly vanished last month.
Source: The Daily Shot
Alternatives: The median valuation multiples for large PE deals are inching closer to the S&P 500’s median trading multiple. Middle market valuations are also improving from their low levels.
Credit: Private debt assets under management have surged, but funds have been deploying capital faster than they are raising it, leading to a decline in dry powder. Direct lending now accounts for a growing share of the market.
Global Developments: Mortgage maturities are significantly shorter in many countries outside the US, leading to a potentially greater near-term impact from higher rates.
