All the way, USA, springs to mind this morning - the Dow Jones finished +1.85%, and the Nasdaq +0.64%. As Trumps ratings improve in the polls, the belief that he will pursue an expansive fiscal policy this has led to 'Yield Steepner' trades being added to portfolios. Mainly the UST2's/30's, with the 30yr yield rising above 2yr yields for the first time since mid-Jan. The main driving force here has been the fall in 2yrs, from 4.80% to lows of 4.41% as the Fed moves closer to its first cut. The yield on 10-year Treasuries opens at 4.17 today.
Domestically, the release of UK CPI was higher than expected at 2% y/y. The headline was expected to fall to +1.90% from +2.00%. This refocuses the attention on UK rate cuts, where the first cut is priced for Sep and a total of -50bp are priced for Dec 2024. Cable has rallied this morning and sits just below the 1.30 resistance. In commodities, gold hit another record after rallying almost 2% Tuesday to touch an all-time high of $2,469.66 per ounce, while West Texas Intermediate declined for a fourth day.
In other markets, Bitcoin rose 1.9% to $65,945.41, Ether rose 2.1% to $3,512.69, and USDJPY has a 158 handle. As for the data we have Eurozone CPI, US housing starts, Industrial production, the Fed's Beige Book, and the Fed’s Thomas Barkin speaks. As the weather gets warmer in the U.K, there is more life in the markets as well.