Navigator: Divine Intervention
The Oil Supply figures that our research and the US Administration claim to be true are irreconcilable. One or the other will be proven completely wrong in September. Stay long Ice Diesel, EU TTF Gas and Brent (in that order).
QS research finds that the US Treasury’s two Divine Interventions on the Yen and US Long Term Treasuries will fail. The “Divine” bit comes from the fact that the US Treasurer assumes that it knows better where prices should be than markets do. Both will fail because that’s wrong. And because the policy settings for a lower US bond yield and a higher Yen are not in place. Stay short US long term Treasuries and the US$ versus AUD and SGD. Ten-Year JGBs remain a short in the Wealth Preservation Portfolio.
Next week will bring the Jackson Hole Conference. It'll be Interesting to see how Warsh reconciles his tough anti-inflation talk (not the walk) with Bessent's yen for lower long term Treasury rates.