US inflation is starting to peak, following the global pattern seen in China and Europe - The Daily Shot Brief

Greetings,

The United States: Let’s begin with the latest inflation indicators. The US is following the global pattern we’ve seen in China and Europe: inflation is starting to peak.

? US headline PPI rate is still rising, but in the last week’s report, the figure came in materially below economists’ forecasts. The core PPI (excluding food and energy) missed projections as well.

A possible slowdown in the growth rate of US import prices is one of the drivers behind the PPI miss (see #4 here). Here is the “industrial commodities” component of the PPI.

Furthermore, Americans seem increasingly upbeat about their earnings over the next few months. Does this mean we will finally see an acceleration in wage growth?

Source: @business; Read full article

Rates: The Treasury term premium (the extra yield investors demand for taking longer-term interest rate risk) has moved deeper into negative territory. Treasuries are once again valued as a hedging instrument for equities.Equity Markets: Implied volatility has diverged from historical vol in recent weeks. Will we see a convergence in the weeks ahead?

Source: Bloomberg

Equity Markets: Implied volatility has diverged from historical vol in recent weeks. Will we see a convergence in the weeks ahead?

Emerging Markets: As discussed previously, Brazil’s retail sales seem to have bottomed.

Source: Goldman Sachs, @joshdigga

China: The nation is still pumping funds into infrastructure. Here are the advances in transportation, for example.

Source: Goldman Sachs, @joshdigga

Japan: The yen continues to trade as a “safe-haven” asset. Here is the yen vs. gold.

Food for Thought?: Why do so many Americans buy trucks rather than cars?

Source: @WSJ, @Skenderbeg_Fund; Read full article

Edited by Josh Marte

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