Buranku

US FEDERAL RESERVE SPLIT: POLICY AT A CROSSROADS:The US Federal Reserve stands increasingly divided over the trajectory of interest rates, with significant macro implications. Fed Governor Christopher Waller, viewed as a top contender to succeed Jerome Powell, called for a rate cut as early as the next meeting, citing muted inflationary pressure despite Donald Trump's new tariff regime. This position contrasts sharply with Powell’s own tone, which remains cautious amid a lack of definitive economic signals.The Fed has now paused for four straight meetings following 100 bps of cuts in 2024. However, the so-called "dot plot" released this week reveals increasing internal disagreement: 10 Fed officials project two or more cuts, while seven see no rate moves at all. Futures markets reflect expectations of two quarter-point cuts in 2025, starting around October, suggesting investors believe inflation remains contained despite trade protectionism.Waller's comments underscore growing Fed discomfort with political pressure. Trump has called for 250 bps in cuts and publicly derided Powell, adding to uncertainty about the Fed's independence heading into an election cycle. While Powell emphasized “anchored long-term inflation expectations” and said divergence would “diminish with data,” the Fed’s credibility remains sensitive to both political intervention and market interpretation.SWISS INHERITANCE TAX POLL TRIGGERS CAPITAL FLIGHT RISK:Switzerland faces reputational and financial damage ahead of a national vote in November to introduce a 50% inheritance tax on estates above SFr50 million. The proposal—originating from the far-left Young Socialists—is spurring warnings of an exodus of UHNWIs, reminiscent of the UK’s non-dom exodus.Legal and private banking professionals report that families are already relocating to Italy, Greece, and the UAE, fearing that even the proposal introduces dangerous legal and fiscal uncertainty. Prominent voices in Geneva and Zurich warn this could irreparably harm Switzerland’s wealth management brand and weaken its position amid competition from zero-tax jurisdictions like Dubai and Hong Kong.SUDAN’S GOLD SURGE FINANCES WARFARE:Sudan’s ongoing civil war is being underwritten by soaring artisanal gold production, driven by record-high bullion prices. Output hit 80 tonnes in 2024, worth over $6 billion, much of it smuggled to the UAE and Russia. This illicit supply chain funds both the SAF and RSF factions in a war that has killed 150,000 and displaced 12 million people.International think tanks such as Chatham House and C4ADS warn of deeply entrenched militarized trade networks and argue that the West has failed to address mineral revenue flows with sanctions or regulatory frameworks. Analysts suggest that targeting gold supply chains could represent a powerful pressure point in ending the conflict.BBC THREATENS AI STARTUP OVER CONTENT MISUSE:The BBC has issued a legal ultimatum to Perplexity AI, accusing the $14 billion-valued US AI search engine of unlawfully scraping and reproducing BBC content. In a formal letter, the BBC demanded deletion of scraped material and financial compensation, citing reputational damage and copyright violations.This marks the UK broadcaster’s first aggressive stance against AI scraping, as public sector institutions grow wary of being used to train large language models without remuneration or consent. While Perplexity dismissed the claim as “manipulative,” this could signal a broader wave of litigation across media institutions echoing ongoing legal battles from News Corp, The New York Times, and Condé Nast.APOLLO BOLSTERS UK NUCLEAR BUILDOUT WITH £4.5BN LOAN:US private capital giant Apollo has agreed to fund £4.5bn in unsecured debt to EDF’s delayed Hinkley Point C project in Somerset, easing pressure on a project whose costs have ballooned from £18bn to £46bn, with a new opening date set for 2029. The loan, at ~7% interest, addresses a shortfall following the UK’s ejection of China General Nuclear in 2023.The deal is a win for private credit’s emergence in public infrastructure, and a major boost to the UK’s push for baseload, low-carbon energy independence. EDF will now focus on France, while UK officials prepare to approve another £11.5bn investment into Sizewell C, to be discussed at a Franco-British summit in July.MIDDLE EAST CONFLICT DRIVES ENERGY VOLATILITY AND RISK REPRICING:The geopolitical crisis between Israel and Iran continues to drive extreme price movements in energy and logistics. Brent crude briefly surged to $79 per barrel, up 10% from the previous week after Israeli strikes on Iranian nuclear infrastructure. Though prices have since retraced to $76.66, volatility remains elevated due to uncertainty over supply routes.VLCC charter rates from the Gulf to China more than doubled from $19,998 to $47,609 per day within a week, with owners holding out for further gains. Rates for LR2 product tankers also surged to $51,879 per day. This reflects a possible market shift away from Iran’s dark fleet toward fully insured routes, which could lead to persistent tightness in freight availability.Global markets responded to tentative diplomatic outreach. European equities rallied, with Frankfurt’s DAX up 1.3%, while the FTSE 100 fell 0.2% on weak UK retail data. The VIX dropped 8%, but investor caution remains as supply chain risks through the Strait of Hormuz—transiting 30% of global seaborne crude loom large.EU-CHINA TENSIONS ESCALATE IN MEDTECH SECTOR:The European Commission announced that Chinese companies will be excluded from public procurement of medical devices on contracts exceeding €5 million. This move, enabled by the International Procurement Instrument, comes after EU investigations concluded 87% of Chinese contracts discriminate against EU suppliers.With EU-China tensions already inflamed by tariffs on EVs and spirits, this marks a pivot toward strategic reciprocity. China condemned the measure as “protectionism” and threatened countermeasures. The Commission remains open to lifting the restrictions should Beijing provide market access parity. This signals to global investors a tightening regulatory environment for Chinese participation in critical EU sectors.US CLEAN ENERGY FACES POST-TRUMP CLIFF:The Biden-era clean energy boom is facing a rapid reversal. Major solar providers like Sunnova and Mosaic have filed for bankruptcy, as proposed Congressional tax legislation threatens to slash key residential solar credits. Industry leaders predict a 50–60% demand collapse and up to 250,000 job losses if cuts proceed.Markets are already repricing: Sunrun shares dropped 36%, Enphase 21%, SolarEdge 30%, and First Solar 19% in recent days. With at least nine bankruptcies in 2025, compared to 16 in all of 2024, the sector’s liquidity is at breaking point. The Solar Energy Industries Association warns of a “six-month cliff” ahead, as the Trump administration pivots toward oil, biofuels, and nuclear.X CORP PUSHES INTO FINANCIAL SERVICES:Elon Musk’s X (formerly Twitter) is accelerating its push to become an “everything app” akin to China’s WeChat. CEO Linda Yaccarino announced plans to launch peer-to-peer payments, trading, and even debit cards this year via X Money, beginning in the US with Visa integration.While this could revolutionize user engagement and monetization, analysts warn of regulatory risks including compliance with anti-money laundering, KYC, and financial licensing laws. Notably, X is seeking to recover its ad business post-Musk acquisition 96% of advertisers have reportedly returned, though 2025 revenue forecasts ($2.3bn) remain far below 2022 levels ($4.1bn).MICROSOFT VS OPENAI: EQUITY BATTLE INTENSIFIES:Microsoft is reportedly prepared to walk away from equity renegotiations with OpenAI if no favorable deal is reached. While the partnership remains in “good faith,” Microsoft wants to retain its 20% revenue share up to $92bn, exclusive Azure distribution rights, and access to OpenAI’s IP pre-AGI.OpenAI needs Microsoft’s approval to finalize its for-profit restructuring, without which it risks losing funding commitments from SoftBank and others. This adds pressure to an already fragile alliance amid infrastructure capacity constraints and competition from xAI and Meta’s Llama. Market attention now shifts to whether OpenAI’s valuation premium holds if Microsoft pivots to broader AI diversification.NOVO NORDISK SURGES ON OBESITY PIPELINE STRENGTH:Novo Nordisk has announced early-stage trial results for amycretin, a new obesity drug that caused 24.3% weight loss in its injectable form, surpassing both Wegovy and Eli Lilly’s Zepbound. The pill version delivered 13.1% loss, with the potential to match injectables over longer durations.Novo is aiming to regain investor confidence after disappointing CagriSema trials last year. Shares, down over 50% YoY, may rebound as the company expands its anti-obesity portfolio. Analysts say amycretin could rival Lilly’s orforglipron, which showed 14.7% weight loss over 36 weeks in Phase 2 trials.NIGER NATIONALIZES URANIUM ASSETS AMID GEOPOLITICAL SHIFT:Niger has moved to nationalize the Somair uranium project, co-owned with France’s Orano, amid deteriorating diplomatic ties. The junta accuses Orano of failing to transfer funds and actively undermining the state. Compensation will be offered, but France's influence in Niger’s resource sector is likely to decline.This follows a trend of state asset seizures in the Sahel, with Mali and Burkina Faso asserting more control over mining ventures. Orano is reportedly seeking to sell its Niger assets, possibly to Russian or Chinese interests. The move adds a new geopolitical risk layer to nuclear energy supply chains.AUSTAL SHIPYARD TAKEOVER POSES SECURITY DEBATE:South Korea’s Hanwha is seeking to increase its stake in Australian defense shipbuilder Austal to 19.9%, raising national security concerns. While CFIUS has cleared the deal in the US, Australia’s FIRB may block it, given Austal’s pivotal role in naval procurement. CEO Paddy Gregg said foreign ownership would conflict with Canberra’s “sovereignty-first” strategy outlined in its 2023 defense review.While US officials favor Hanwha’s role in joint shipbuilding initiatives, Australia must weigh alliance integration against domestic capability protection. This debate reflects broader defense industrial shifts in the Indo-Pacific amid growing Chinese naval assertiveness.

As of today, the market continues to grapple with elevated U.S. debt issuance concerns, stubborn inflation pressures, and shifts in global demand for Treasuries. The newly surfaced economic editorial emphasizes a core macro concern: the United States' soaring public debt, now pushing toward $29 trillion in outstanding Treasuries, equivalent to roughly 95% of GDP. The issuance has notably skewed toward long-duration instruments, with the Treasury borrowing heavier through notes and bonds, particularly with $1.8 trillion in deficit projected in 2024 alone. This surge in long-term supply places upward pressure on yields — especially in the absence of strong foreign demand, which has been in steady decline.In the backdrop, recent performance in U.S. equity sectors reveals a pivot toward value and inflation-sensitive segments. Energy (XLE) has outperformed on both a 1D (+1.63%) and YTD basis (+9.11%), signaling real-asset rotation. Communications (XLC +1.72%) and Technology (XLK +1.62%) show strength, likely reflecting a rebound from oversold levels. Financials (XLF), however, remain volatile, with capital continuing to favor sectors like Industrials (XLI +0.65%) and Materials (XLB +0.85%) as proxies for infrastructure and dollar hedging. Real Estate (XLRE +0.87%) is showing a temporary bounce, but remains a laggard over the longer term due to yield sensitivity.Factor performance is confirming this rotation narrative. IPOs (+1.2%), spin-offs (+0.3%), and buybacks (+0.3%) are leading the qualitative factors, while style preferences are leaning toward growth and small-cap recovery, albeit from deeply underperforming levels YTD. Momentum and low-volatility factors are currently lagging. On a size-style basis, Mid-Cap Growth and Small-Cap Growth are recovering modestly, but the broader landscape suggests market participants are still defensive and selectively rotating.The fixed income landscape remains under stress. U.S. Treasury ETF performance continues to reflect pressure at the longer end. The 20Y (TLT) and 30Y durations have lost between -0.77% to -1.03% over the latest session, signaling reluctance from institutional buyers to absorb long-end supply without higher compensation. Across the curve, U.S. yields remain elevated, with the 2Y at 3.958%, 10Y at 4.428%, and 30Y at 4.933%. Notably, international yields remain divergent — Japan's 30Y yield has reached 2.335%, while the U.K. 30Y sits at 5.276%, reflecting inflation persistence in developed Europe.Meanwhile, the credit complex is firming in high-grade corners. ETFs like LQD (+0.36%) and BLKN (+0.34%) are gaining, while high-yield names (HYG: flat) and convertibles (-0.01%) remain flat or down. Preferred stock and floating rate paper are being held as rate-insulated yield vehicles. International credit is mixed — EMLC (Local EM Bonds) is positive (+0.11%), while USD-based emerging debt (EMB) is flat.Commodities are providing solid macro signals. Brent crude is up +1.73%, WTI +1.67%, and natural gas +0.58%, highlighting a renewed inflation hedge dynamic. Gold (XAUUSD) is slightly down at $3,382.06 (-0.04%), but remains near breakout levels with YTD performance near +29%. Silver and copper continue to hold recent gains, while agriculture is mixed: Corn (-2.14%) and Sugar (-1.16%) are under pressure, while Soybeans, Wheat, and Live Cattle are in mild recovery.On the global equities side, South Korea, Brazil, and India lead EM flows, buoyed by rising commodity prices and a modestly weaker USD. Brazil (EWZ) is up 1.8% YTD and climbing, South Korea (EWY) is at +1.3%, and India (EPI) continues to trend higher. Developed markets (France, Germany, U.K.) are soft, while Canada (+26.9% YTD) remains a notable outperformer, aided by energy and resource exports. In the U.S., SPY is up 0.95% on the day and +12.45% YTD.In terms of actionable positioning: gold remains a buy on dips as long as real yields stay capped and auction demand remains cautious. U.S. long-end bonds are to be avoided or shorted on rallies given increasing supply and muted demand. Energy and materials sectors continue to offer inflation protection, while financials and REITs should be traded tactically around auction and CPI prints. Equity allocations should lean toward value/momentum hybrids with capital discipline and dividend backing, while growth/multiple expansion names should be watched closely for signs of overextension.All in all, market behavior is currently being dictated by a blend of inflation expectations, sovereign credit concerns (especially U.S. debt overhang), and rotation into defensively pro-cyclical sectors. With the Treasury supply pipeline growing and buyers rotating away from long bonds, the next key market catalyst will likely emerge from either a weak bond auction or a sharp reacceleration in core inflation. Until then, portfolios should be tactically balanced, yield-aware, and commodity-hedged.

As of today, markets are navigating a cautious and complex macro landscape driven by sticky inflation, mixed economic momentum, and upcoming supply events in the U.S. Treasury market. At the center of market focus is the U.S. Producer Price Index (PPI), which surprised to the upside. The headline PPI YoY came in at 2.6%, above the prior month’s 2.4%, while the month-over-month figure rebounded to +0.2%, recovering from -0.5% in April. Although Core PPI YoY held flat at 3.1%, the level remains elevated. These numbers reinforce the perception that inflationary pressures remain embedded at the producer level, limiting the Federal Reserve’s flexibility to ease policy in the near term.Simultaneously, the U.S. labor market continues to show resilience. Initial Jobless Claims printed at 242,000, slightly better than the consensus estimate of 247,000. The four-week average stabilized at 235,000, and Continuing Claims remained firm at 1.904 million. This combination of firm labor and sticky inflation supports a “higher-for-longer” rates environment, with no immediate pressure on the Fed to pivot dovish. These data points, taken together, imply that the fixed income and equity markets are still subject to repricing risk, especially if the Fed maintains its hawkish rhetoric or if real yields begin to trend higher again.In the bond market, U.S. Treasury yields moved slightly lower across the curve, with the 2Y yield at 3.958% (-0.6bp), the 10Y at 4.416% (-1.0bp), and the 30Y at 4.905% (-1.4bp). The curve remains inverted, although the steepness has moderated somewhat, indicating a cautious recalibration of forward rate expectations. Markets are closely watching today’s 30-year Treasury bond auction, scheduled for later in the session. A weak result — defined as a tail greater than 1.5bps — could lead to a renewed sell-off in long-duration Treasuries and reinforce the bear trend in TLT.Looking internationally, Japan’s 10Y yield remains stable at 1.454%, suggesting no immediate pressure from the BoJ to shift policy. In the UK, the 10Y Gilt yield stands at 4.526%, continuing to reflect persistent inflation risk. German 10Y Bunds yield between 2.41–2.45%, slightly firmer, maintaining a neutral to moderately hawkish stance ahead of upcoming ECB communications. Collectively, these yield levels reflect a global market pricing in differentiated inflation risks and rate divergence.In fixed income ETFs, we see short-duration U.S. Treasury instruments leading, with SHY (1–3Y) up +0.13%, while TLT (20Y+) gained +0.30%, showing tentative stabilization ahead of the auction. Investment-grade credit, as tracked by LQD, rose +0.34%, benefiting from risk-off hedging and carry trades. However, high-yield (HYG) was flat at -0.02%, and convertibles (CWB) edged lower at -0.06%, both signaling a decline in speculative appetite. Internationally, emerging market debt (EMB +0.3%) and global Treasuries (IGOV +0.29%) are firming as the USD softens modestly.In the equity space, today’s session is showing a mild risk-off tilt. The S&P 500 trades at 6,022 (-0.3%), holding just above key support at 5,975. The Dow Jones is flat at 42,865, with underlying breadth weakening. The Nasdaq 100 fell -0.4% to 21,860, and Russell 2000 declined -0.4% to 2,148, continuing its underperformance. The VIX has risen to 17.27 (+1.9%), closing in on the psychological stress level of 18.5.Sector rotation aligns with a defensive narrative. Energy is leading, up +1.4% (with oil rallying sharply), followed by Utilities (+0.1%) and Health Care (+0.1%), both classic low-volatility, defensive groups. Conversely, Technology (-0.2%) and Real Estate (-0.5%) are underperforming, as the market de-risks rate-sensitive sectors. Financials (-0.1%) remain cautious due to yield curve pressure and auction-related uncertainty.From a style and factor perspective, momentum continues to lead with +0.72% relative outperformance versus SPY, followed by high dividend (+0.39%) and value (+0.16%). Meanwhile, growth stocks are soft (-0.04%), and small caps are lagging further (-0.32%), signaling a clear rotation away from riskier, high-beta equity exposure.In currencies, the U.S. dollar is slightly weaker today. USD/JPY trades at 143.99 (-0.4%), showing softness despite higher PPI, likely due to short-term positioning. EUR/USD has strengthened to 1.1516 (+0.2%), and GBP/USD is stable at 1.3547. Crypto remains soft with BTC/USD down 1.2% to $107,669, confirming that risk appetite remains limited.The commodity complex is stronger. Gold is up $18.20 to $3,371.13, reflecting safe-haven buying as real yields pause. Crude oil (WTI) has rallied $2.90 to $67.88, and Brent is at $69.51, with supply dynamics and macro demand recovery pushing prices higher. Natural gas remains flat at $3.51. These moves have boosted commodity-sensitive equities in the emerging market space. For example, Brazil (EWZ) is up 1.8%, South Korea (EWY) up 1.3%, and India (EPI) +0.3%, while developed markets (EFA) are flat to down (-0.2%).Tactically, the SPX remains neutral to bearish. Holding above 5,975 preserves structure, but a breakdown below this level — especially if triggered by a hot auction or inflation shock — could drive further downside. The Dow remains in a bearish posture below 43,000, with a downside trigger at 42,300. Gold remains in a bullish technical setup with breakout potential above $2,350 and support at $2,325–2,330. USD/JPY is a tactical long above 143.80, aiming for 144.60, conditional on yields rising. TLT remains weak, and a close below 86.50 following the auction would confirm downside continuation. WTI oil is long-biased above 67, targeting $69.80 and higher if USD continues to weaken.Key macro risk triggers include: a PPI print above 2.8% or Core PPI above 3.2%, which would reinforce Fed hawkishness; a long bond auction tail greater than 1.5bps, which would signal poor demand and push long yields higher; a VIX breakout above 18.5, which would signal a broader risk-off episode; and a gold breakout above $2,350, which would confirm macro hedge acceleration.AssetActionGoldLong biasOil Long setupSPX HedgedDow Bearish leanUSD/JPY Buy dips > 143.80TLT Bear or avoid

XAU/USD:Macro Drivers:Real Yields slightly positive → historically bearish, but offset by liquidity and geopolitics.Fed Dovish Tilt → market pricing cuts = bullish.Central Bank Demand (China, Russia) remains robust = structural bid.Liquidity Layer:Fed Net Liquidity ↑ → Bullish XAU.RRP down = cash entering markets → supports gold and equities.TGA stable → no drain on liquidity short-term.Volatility Layer:VIX at -0.9 inversion → Complacency = gold call hedge demand rises.MOVE Index off highs → less bond volatility = supportive.Technical & Flow Factors:Dealer Gamma positioning near neutral = potential for large range move.CTA models still long XAU; no crowding signal yet.COT Data: modest speculative longs = room for extension.Geopolitical Premium:Mid-East tensions, Ukraine, Taiwan = soft risk-off flows into gold.DXY strength capping upside, but not reversing trend.XAU/USD:Macro Drivers:Real Yields slightly positive → historically bearish, but offset by liquidity and geopolitics.Fed Dovish Tilt → market pricing cuts = bullish.Central Bank Demand (China, Russia) remains robust = structural bid.Liquidity Layer:Fed Net Liquidity ↑ → Bullish XAU.RRP down = cash entering markets → supports gold and equities.TGA stable → no drain on liquidity short-term.Volatility Layer:VIX at -0.9 inversion → Complacency = gold call hedge demand rises.MOVE Index off highs → less bond volatility = supportive.Technical & Flow Factors:Dealer Gamma positioning near neutral = potential for large range move.CTA models still long XAU; no crowding signal yet.COT Data: modest speculative longs = room for extension.Geopolitical Premium:Mid-East tensions, Ukraine, Taiwan = soft risk-off flows into gold.DXY strength capping upside, but not reversing trend.Fixed Income Market Overview:Yield Curve Structure & Implications:2s10s Spread: Deeply inverted — classic signal of recession risk in 6–12 months.10Y UST Yield: Hovering around 4.4–4.5%, pricing in sticky inflation, resilient growth.30Y Yield: Flattening vs. 10Y = market doubts long-term growth, aligns with XAU/USD strength.Currently 5y is capping XAUUSDCTA & Systematic Flow Impact:Trend-followers are long bonds → but positioning crowded.Breakdown in yields = volatility spike risk for equity and FX markets.FRA-OIS spreads stable → no interbank funding panicBonds against Equities Risk Premium:Equity Risk Premium (ERP) < historical average → equities expensive vs. bonds.Earnings Yield (S&P500) ~4.2% vs. 10Y ~4.4% = negative equity risk premium.Historically unsustainable → signals either a bond rally or equity pullback.So my opinion for possibilities:
Long the Dip of XAUUSD

The Federal Reserve’s decision to maintain its benchmark interest rate at 4.25%–4.50% for the third consecutive meeting underscores a cautious stance in light of rising economic uncertainties. While the U.S. labor market remains strong—evidenced by robust non-farm payroll figures in April—the Fed has pivoted its tone. Policymakers now highlight increasing risks of both higher inflation and higher unemployment, largely driven by the Trump administration’s expansive tariff threats. As stated by the FOMC, “uncertainty about the economic outlook has increased further.” This warning reflects not only concern over direct cost pressures from tariffs but also the broader economic impact on business investment and consumer confidence.The gold market (XAUUSD) is currently reflecting investor anxiety and hedging behavior. With a current price of $3,382.91, despite a slight daily decline of –$46.00 (–1.3%), gold is up a remarkable +28.90% year-to-date, making it the best-performing major asset shown in the dashboard. This performance aligns with expectations during periods of rising inflation concerns and geopolitical tension, both of which are now compounded by uncertainty surrounding U.S. trade policy. The Federal Reserve’s dovish shift—combined with falling real interest rates and weaker equity sentiment—continues to support the appeal of gold as a hedge. Unless we see an unexpected acceleration in Fed tightening or a dramatic de-escalation in global risks, gold is likely to remain elevated and could potentially test new highs over the coming months, especially if inflation prints come in above expectations.Conversely, the U.S. equity market—particularly the S&P 500 (SPX)—is showing signs of stress. As of now, the S&P 500 sits at 5,605.67, down –13.41 points (–0.2%) on the day, and –4.69% year-to-date. The broader equity picture reflects caution, with high-growth sectors like Technology (XLK –0.12%) and Communications (XLC –0.52%) dragging down the Nasdaq 100, which is down –6.19% YTD. Investors appear to be rotating into more defensive sectors, such as Real Estate (XLRE +3.14%) and Financials (XLF +2.75%), which tend to perform better when interest rates stabilize and volatility rises. With the Volatility Index (VIX) at 24.72, market participants are bracing for more turbulence ahead. Given the Fed’s policy pause and corporate earnings risks tied to unpredictable tariff policies, we are likely to see continued choppiness in the equity markets. The S&P 500 may struggle to gain significant traction unless there is a material policy shift or strong upside surprises in earnings.The U.S. dollar is showing short-term resilience but is under structural pressure. The USD/JPY pair is trading at 143.7235, up +1.3215 (+0.9%), indicating near-term strength. However, the broader context points to a potential weakening trend. U.S. Treasury yields are declining—2-year at 3.76%, 10-year at 4.292%, and 30-year at 4.785%—which signals markets are pricing in slower growth and a higher probability of rate cuts later in the year. The Fed’s dovish tone and concerns about future inflation have also led to increased demand for inflation-protected assets, as shown by the modest gain in TIPs (TIP ETF at 109.33, +0.05%). Meanwhile, the U.S. dollar is slipping against other major currencies like the euro (EUR/USD at 1.1326, –0.0044) and the pound (GBP/USD at 1.3306, –0.0062). These dynamics suggest that the dollar may face renewed weakness over the next several months, particularly if the Fed signals a pivot to rate cuts or if geopolitical tensions ease, diminishing safe-haven demand.Market sentiment overall remains fragile. The commodity space is softening, with Crude Oil (CL1) down –1.6% to $81.02, and Brent Crude (CO1) off –1.5% to $61.13, reflecting cooling global demand expectations. On the equity factors front, growth stocks are underperforming across all size classes, while value and core stocks are faring better—a classic defensive setup as investors prepare for a lower-growth regime.Outlook for the Next Few Months:Looking ahead, we can expect gold to remain well-supported, potentially pushing toward new highs if inflation data accelerates or geopolitical risks persist. Its performance will also benefit from any further softening in the dollar or Fed rate cut signals. For the S&P 500, the outlook is neutral to bearish in the near term. Without clear resolution on trade policy or a shift in Fed strategy, earnings uncertainty and cautious sentiment are likely to weigh on equity valuations. Defensive sectors may outperform, while growth sectors could continue to lag. As for the U.S. dollar, while it could see short-term support from relatively higher yields compared to Europe or Japan, the broader direction over the coming months is likely to tilt downward, especially if the Fed becomes more openly accommodative.

Macro & Equity Market Overview: Global equities are showing signs of fragility following a strong rally, with the S&P 500 down 0.8%, the Nasdaq 100 off 0.9%, and the Dow Jones losing nearly 390 points. Weakness was broad, with Russell 2000 (-1.1%) underperforming, indicating rising risk aversion toward small caps. The CBOE Volatility Index (VIX) spiked 4.7% to 24.76, reinforcing the shift to defensive positioning.Key drivers include renewed concerns over Trump’s tariff rhetoric, which hit pharma and trade-sensitive sectors, and an apparent stall in momentum after a multi-session rebound. Fed rate expectations remain a key overhang — traders are waiting for the Federal Reserve’s next move while the U.S. 10Y yield holds above 4.31%, showing sticky long-term inflation expectations. Germany’s political instability adds to risk-off sentiment in Europe.------------------------Oil (WTI/Brent) – Day Trading Outlook: Crude oil (WTI) is trading around $58.67, having bounced 4% from recent multi-year lows triggered by OPEC+ supply announcements and economic concerns. The U.S. shale outlook has turned structurally bearish, as noted earlier, with capital expenditure and rig count cuts signaling a near-term production rollover. This underpins a medium-term bullish case.For intraday traders, today's move matters because oil has recovered above the psychological $58 level, with Brent back at $62.59. Volatility is elevated, and the price action suggests a reversal from oversold conditions. Energy sector ETFs (XLE) were flat despite market-wide weakness, signaling possible rotation back into oil stocks. Watch for upside continuation above $59.50 WTI, with a likely target zone around $61.20–61.80 intraday if risk appetite stabilizes.-------------------S&P 500 – Day Trading Outlook: Technically Heavy, Breadth DeterioratingThe S&P 500 closed at 5,606, down 43 points, with negative breadth across almost every major sector. The only strength came from Utilities (XLU +1.2%), underscoring a defensive rotation, while Technology (XLK -0.8%), Financials (XLF -0.6%), and Health Care (XLV -2.8%) led to the downside.Market internals suggest further downside is likely unless bond yields soften or volatility retreats. The S&P 500 is struggling at 5,600–5,640, and intraday resistance sits at 5,630–5,650. A break below 5,585 opens downside toward 5,545–5,500 in the short term.Key bearish indicators:High-yield credit (HYG) is flat to negative.Small-cap underperformance.U.S. equity factors: value, core, and growth all showing -0.8% to -0.9% performance in every size bucket. ----------------XAU didnt change from weekend.The U.S. 10Y and 30Y yields remain above 4.3% and 4.7% respectively, capping gold’s upside, but risk-off sentiment and volatility (VIX > 24) are providing strong tailwinds.

Current Market Drivers for Gold:---Safe-Haven Demand: Gold surged past $3,000/oz, driven by investor uncertainty regarding inflation, trade policy, and geopolitical risks.---Inflation Hedge: Concerns over rising inflation, especially in the wake of Trump’s tariff policies, reinforce gold’s role as a store of value.---Treasury Yields & Dollar Strength: Rising 10-year Treasury yields (4.3%) typically pressure gold, as higher yields make interest-bearing assets more attractive. However, strong safe-haven demand is currently counterbalancing this effect.---Global Liquidity & China’s Economic Plans: China's economic stimulus expectations could increase demand for commodities, indirectly supporting gold prices.Possible Outcomes for XAU/USD:Continued Uptrend (Bullish Case) (long term):---If inflation fears persist and geopolitical tensions remain high, gold could see further upside as investors seek safety.---A potential slowdown in US economic growth may lead the Fed to pause or ease monetary policy, which could support gold prices.---Breach of key resistance levels (e.g., $3,050 - $3,100/oz) could trigger further buying momentum.Price Correction or Consolidation (Neutral to Bearish Case):---If Treasury yields continue rising, making fixed-income assets more attractive, gold’s opportunity cost increases, potentially leading to profit-taking.---A strengthening US dollar could pressure gold, especially if risk sentiment improves and capital rotates back into equities.---A pullback to key support levels (e.g., $2,900 - $2,950/oz) is possible before any further rally.Key Factors to Watch:---Federal Reserve Policy: Any shifts in interest rate expectations could significantly impact gold prices.---Inflation Data & Treasury Yields: Rising yields could cap gold’s gains, while inflation concerns may push it higher.---Geopolitical Developments: Escalating tensions (e.g., Russia-Ukraine, US-China trade) could drive additional safe-haven flows into gold.

Wall Street experienced significant declines as investors weighed President Trump’s tariff policies and doubts over a Russia-Ukraine ceasefire. The S&P 500 fell 1.5%, and the Nasdaq dropped 2.2%, signaling heightened risk aversion. Simultaneously, investors sought safety in gold, pushing prices to a record high of $2,982 per troy ounce.Trump's threat to impose a 200% tariff on EU alcohol imports and geopolitical uncertainties surrounding Russia’s stance on ceasefire terms with Ukraine further dampened market sentiment. Concerns over US economic growth and weakening business and consumer confidence led to a rotation out of tech stocks into more defensive sectors.Macroeconomic Landscape:-Market Sentiment: Investor risk aversion is evident as major indices decline (S&P 500: -1.5%, Nasdaq: -2.2%). Flight to safety is reflected in record-high gold prices ($2,982/oz).-Trade Policy Impact: Trump's proposed 200% tariff on EU alcohol raises concerns over supply chain disruptions and potential retaliatory tariffs. This could pressure consumer goods and retail stocks with global exposure.-Geopolitical Risks: Uncertainty over a Russia-Ukraine ceasefire adds to investor unease, influencing energy prices, global supply chains, and equity markets.-US Economic Outlook: Slower growth projections (Goldman Sachs GDP cut to 1.7%) suggest a more cautious investment environment, favoring defensive assets.Safe-Haven Assets:Gold & Precious Metals: Gold’s 14% YTD surge suggests continued demand for inflation hedging and market uncertainty protection.---Possible Outcome: Sustained geopolitical concerns and economic slowdown could further support gold prices.---Considerations: Monitor inventory levels on Comex and central bank purchasing trends.US Treasuries & Safe-Haven Currencies: Risk aversion typically strengthens US Treasuries, CHF, and JPY.---Possible Outcome: Bond yields may decline as capital flows into safer assets.---Considerations: Duration management is key—shorter-duration bonds could mitigate rate risk.Trade & Geopolitical Risks:Tariff Uncertainty: A 200% EU alcohol tariff could disrupt supply chains, weaken consumer demand, and provoke retaliatory measures.---Possible Outcome: Sectors with significant EU exposure (e.g., alcohol, retail) may face earnings pressure.---Considerations: Sector diversification and geographic risk analysis are key for portfolio insulation.Russia-Ukraine Conflict: Uncertainty over ceasefire talks affects energy security, investor sentiment, and commodity markets.---Possible Outcome: Oil price fluctuations may persist, impacting energy equities and inflation-sensitive assets.---Considerations: Exposure to domestic-focused industries could reduce geopolitical risk impact.Economic Slowdown & Consumer BehaviorUS Growth Concerns: Slower GDP growth (1.7%) suggests a more challenging earnings environment for cyclicals and credit-sensitive sectors.---Possible Outcome: Equities could face further downside pressure, particularly in growth-dependent sectors like tech.---Considerations: Maintaining liquidity may provide opportunities to capitalize on undervaluations post-correction.Consumer Confidence Weakness: If tariffs and global instability persist, discretionary spending could decline, affecting retailers and non-essential consumer brands.---Possible Outcome: Consumer discretionary stocks may underperform, while staples and value oriented brands could see relative strength.---Considerations: Focus on firms with resilient pricing power and diversified revenue streams.

Stocks:A blistering 2 month rally left global markets closing 2023 with strong annual gains as investors bet that major central banks have finished raising interest rates and will cut them rapidly next year but decrease to 2, to 2.5 over 2024, 2025 and 2026.The MSCI World index, an indicator of global equities, had surged by 16 percent since late October and was up 22 percent this year by late trading yesterday (31st).The gains were driven by a dramatic shift in interest rate expectations following a flurry of recent data showing inflation falling faster than expected in western economies.Note: Slowdown of inflation and preparation of deflation for a soft landing.A growing consensus that borrowing costs will fall sharply in 2024 also sparked a bond market rally, attracting investors to equities as they seek higher returns. The FED boosted this trend in mid December when its policy projections signalled substantial rate cuts next year.Globally, the rise in the MSCI represented its best annual run since a 25 percent gain in 2019. Meanwhile, the Bloomberg global aggregate indext of government and corporate debt was up 6 percent this year, having been down about 4 percent in mid October.The US 10 year treasury yield, a benchmark for global assets that moves inversely to bond prices, had fallen to 3.88 percent from more than 5 percent in October as inflation continues to slide. US consumer prices rose 3.1 percent in the year to November, compared with 9.1 percent in the 12 months to June 2022. Eurozone inflation dropped to 2.4 percent, the slowest annual pace since July 2021, while UK inflation has slowed sharply to 3.9 percent.Traders are now pricing in six rate cuts (important, 6) by FED and the European Central Banks by the end of 2024, a stark turnaround from the fears of higher for longer borrowing costs that triggered a global bond selling off in autumn.Many of the gains on Wall Street were driven by a handful of big tech stocks, although the rally has broadened beyond the typical 7 (Apple, Microsoft, Alphabet, Amazon, Tesla, Meta and Nvidea) in the recent weeks. Nasdaq index was up 44 percent for the year, the highest showing in 2 decades.Prediction ECB rate cuts:Falling inflation is set to prompt the European Central Bank to start cutting interest rates in the second quarter of 2024.Rate cuts expectations have intensified to 2.4 percent in November, down from its peak above 10 percent a year earlier and only slightly above the 2 percent ECB target.I expect that inflation may shortly dip below 2 percent in the second quarter 2024 but for most of the year will be somewhat above 2 percent.The ECB has warned it expects inflation to reaccelerate in December before slowly declining to its target in mid 2025. Isabel Schnabel (ECB executive board member) told a newspaper “We still have some way to go and we will see how difficult the famous last mile will be.”How quickly price pressures subside will be the key question as the central bank decides when to start lowering borrowing costs.Being too slow to cut rates could well prove more damaging for the ECB credibility in response to an energy shock.The ECB has raised its deposit rate from minus 0.5 percent last year to its deposit rate from minus 0.5 percent last year to its highest ever level of 4 percent, in response to the biggest surge in consumer prices for a generation.2The ECB has raised interest rates very aggressively, by large amounts and quickly, and there is a risk it has overestimated strength of the euro area economy and overtightened.Debt levels of several EU governments have risen to record levels above 100 percent of gross domestic product in recent years, including Italy, France and Spain. I think most were sanguine about the risk of a crisis.The spread between the 10 year bond yield of highly indebted southern European countries and those of Germany was unlikely to rise significantly. I wouldn’t be surprised to see European periphery spreads fall further in 2024.The new EU recently agreed new debt and deficit rules that will require most government to rein in spending.

Rate cuts:The Federal Reserve declared rate cuts to be a little bit ahead and it’s an attempt to rein in the exuberance that has driven up stocks and bonds.Loretta Mester challenged expectations that the central bank would abruptly pivot towards lowering borrowing costs now it was more confident it had lifted its benchmark interest rate to a level restrictive enough to bring inflation under control.Her comments align with two other members of the voting 2024 FOMC members, John Williams and Raphael Bostic which agree that rate cuts were not imminent.Mester said the next phase is not when to reduce rates, even though that’s where the markets are at and that its about how long do we need monetary policy to remain restrictive in order to be assured that inflation is on that sustainable and timely path back to 2 per cent.She also added that the markets are a bit ahead and that the jumped to the end part which is where the were going to normalize quickly and we don’t see that happening.Since the central banks final meeting of 2023, traders in the future markets have stepped up bets that rate-setters will lower their benchmark interest rates as early as March and reduce it over next year to just below 4 percent from its 22 year high of 5.25 to 5.5 per cent.The catalyst for the last FOMC meeting was a dovish message from Fed chair Jay Powell, who struck a confident tone about the banks grip on inflation conceded that a nascent debate was under way among officials about rate cuts.Austan Goolsbee said he was confused about the markets response to the last weeks Fed meeting. He also stated that the Fed chairs remarks was wishful thinking and that there is what they hear and what they want to hear.The new projections also out last week showed most policymakers backed lowering the federal funds rate by 0.75 percentage points in 2024 and another full percentage point in 2025 before it falls under 3 percent the year after. (3 year plan, 24, 25, 26).Mester is retiring in June (attention to her actions) said she was among officials to forecast three quarter-point rate cuts next year given her view that inflation would continue to moderate as growth cooled further and unemployment rose slightly, which should be called soft landing. This is harder to achieve but it’s the option they want to choose.With this settings the Feds policy is in a good place but officials would not wait long to lower rates so that they did not cause excessive job losses.They were saying that they were not going to content with inflation settling on a level above their goal and that they were not going to ignore the maximum employment part of the mandate and that balancing those risks are going to be important and change with how the economy is going.If the Fed slow inflation means we are in inflation and its decreasing so we will be searching for buys in gold on major events or on the ones based on the topics mentioned above.We might have sell opportunities but will be shorter than the buys and I will search for them on Thursdays and Fridays.I will be tracking buys since deflation is going to happen but slowly cause of the soft landing.