Running out of time, US/China war (+intraday post 11/April)
Dear viewers and readers, it looks like we won’t have to wander far for our daily dose of excitement today either! The US/China viagra-supercharged cockfight continues, with China in the left corner getting ready to unleash yet another round of hits, while the US in the right corner does its best to absorb every blow and pray its backers don’t throw in the towel.
In the stands, the Russian and Arab delegations—who’ve been rooting for the US as their favorite—keep shouting, “Fuck, get yourself together!” Meanwhile, they’re clearly still undecided about whether to sponsor him for the upcoming season. As for Lady Europe, previously known in the tabloids as US’ sweetheart, is in a hysterical frenzy, being clearly unsure yet whose bankroll she wants to gold-dig from in the future…
Currently…
Violent sell-offs in risk assets, surges in gold, cash, and safe currencies, and record volatility…
Safe-haven assets have surged. Gold prices rocketed above $3,200/oz to all-time highs as investors sought shelter amid a weaker U.S. dollar and recession fears. In fact, gold is up ~21% year-to-date, buoyed by crisis hedging demand and large inflows into gold ETFs. The Swiss franc hit a 10-year high vs USD and the yen strengthened to multi-month highs. U.S. Treasuries saw chaotic trading: paradoxically, long-term yields spiked in a “dash for cash” even as rate-cut expectations grew. The 10-year Treasury yield jumped to ~4.45% (≈+45 bps in one week, the sharpest rise since 2001), and 30-year yields neared 4.9% (largest weekly jump since 1982).
Japan and China has started to sell as predicted. Meanwhile, short-term Treasuries and cash have been in high demand, with safe-haven inflows of ~$18.8 billion into Treasury funds in a week – the largest ever, according to BofA data.
Incoming data and policy communications also reflect the immediate fallout. Price pressures are mixed – consumer prices unexpectedly fell in March (a sign that demand may be weakening) even as tariffs raise some costs. Core inflation could still spike later (PIMCO estimates U.S. core CPI may reach ~4.5% if tariffs fully pass through), but near-term, deflationary signals have appeared. The Federal Reserve is pivoting toward easing: traders now bet the Fed will cut rates by ~100 bps by end-2025, with rate reductions possibly restarting as soon as June.
Everything I predicted is happening.