Although volume levels increased yesterday, the trading range was very tight, except for some intraday fireworks related to the Trump-Powell saga. Otherwise, the pinning effects of July opex are in full force right now, which means we probably remain in this tight range until we get through Friday.
Meta (NASDAQ:) broke support yesterday, falling below $710, and volume has been steadily increasing as momentum has faded. The next place for support probably comes around $680. The 2b top in Meta is important because the market, for the most part, has been heavily reliant on Meta and Nvidia (NASDAQ:) in its recovery, and if Meta starts to fade, I think it will tell us a lot about where the market goes overall.
Inflation Expectations to Run Higher?
Elsewhere, we get / prices today along with data. Import prices are expected to rise by 0.3% m/m from 0.0% in May. I guess if there is going to be tariff , that is where we are likely to see it today. 5-Year swaps traded up again yesterday, closing above 2.6%, their highest level since October 2023.
Even 10-year swaps are trading higher and are now 2.54%. These aren’t short-term inflation expectations rising; rather, these are long-term inflation expectations, and what seems concerning about them is their current level. I mean, we are talking about a potential new Fed chair that is going to come and start , at a time when long-term inflation expectations are in a position to really run higher.
Well, the yesterday finally broke out of the flag pattern, but it happened because the fell by 5 bps, and the fell 3 bps. It could be a false start, but we should find out more in the coming days.
Anyway, that’s all for now.
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