Record high Gold
April 1, 2024
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–Little reaction to Friday’s PCE data (essentially as expected with PCE yoy 2.5% and Core 2.8%) and Powell’s patience with respect to cutting the funds rate (“we don’t need to be in a hurry to cut”).
–TYM4 settled 110-255 Thursday and prints 110-265 this morning while USM settled 120-14 and prints 120-05. Stocks are, of course, higher. China’s Caixin Mfg PMI rose to 51.1, supporting equities there. No yen intervention yet with $/yen 151.38. CNY at its weakest level of 2024 at 7.23. New all-time-high gold above $2250.
–On Thursday, there was a new buyer of 50k TY 112c for cab-7 (= $7 or $350k total prem). This was an add to the previous day’s buy of 50k 112.25c for the same price. Monday options don’t generally have large activity, but on Thursday the calls saw an open interest increase of 103k. On the CME website the symbol is VYO for Monday opts.
–News today includes Mfg PMI, expected 48.3 from 47.8 last. It’s been sub-50 since October 2022. Prices paid expected 52.9 from 52.5. Construction Spending expected +0.7. Powell speaks again on Wednesday.
–I attached a chart of US currency in circulation (% change yoy). I suppose it’s an anachronism since few purchases are made in cash anymore. It’s been said there are more $100 bills in Russia than in the US as it’s a convenient store of value in many countries. Current level is $2.339T, a bit less than the total crypto mkt cap. Probably just a coincidence but the current growth rate of 1.2% which has been in steady decline since covid, is about where it was just prior to the 2001 and 2008 recessions.
