Enola Gay
Ian Reynolds
Investing and Trading | Capital Markets | Macroeconomics| Bitcoin & Decentralised Finance | Helping to Find the Money Flow | Commentator | Speaker
The Enola Gay is a Boeing B-29 Superfortress bomber, named after Enola Gay Tibbets, the mother of the pilot, Colonel Paul Tibbets. On 6 August 1945, during the final stages of World War II, it became the first aircraft to drop an atomic bomb in warfare. The bomb, code-named "Little Boy", was targeted at the city of Hiroshima, Japan, and destroyed about three-quarters of the city. Enola Gay participated in the second nuclear attack as the weather reconnaissance aircraft for the primary target of Kokura. Clouds and drifting smoke resulted in Nagasaki, a secondary target, being bombed instead. Wikipedia
For English pop fans "Enola Gay" is an anti-war song by the English electronic band Orchestral Manoeuvres in the Dark (OMD), the title of which was misunderstood at the time.
This isn't a reference to Russia military manoeuvres in the Caribbean soon, which will include submarines armed with nuclear weapons. Nor is it about the destination which invokes the memory of the Bay of Pigs disaster.
The Bay of Pigs Invasion was a failed military landing operation on the southwestern coast of Cuba in 1961 by Cuban Democratic Revolutionary Front (DRF), consisting of Cuban exiles who opposed Fidel Castro's Cuban Revolution, clandestinely financed and directed by the U.S. government. Castro was a a Marxist–Leninist whose influence by The Soviet Union. in a place just 400km from the United States coastline was of great concern to the US. The operation took place at the height of the Cold War, and its failure influenced relations between Cuba, the United States, and the Soviet Union. Wikipedia.
It's a reference to the insanity of having to kill 140,000 at Hiroshima and 74,000 at Nagasaki to stop a war! And then Japan still didn't surrender immediately. Apparently the US had at least 10 more nuclear bombs ready to go.
Fast forward to today, and the same crazy logic seems to be at play across the globe.
Breaking
Nonfarm Payroll Shocks Markets
A market primed by interest rate cuts in Europe and Canada, had it's hopes dashed by a seemingly strong US employment report.
Nonfarm payroll used to be by far the most important economic release for markets and it's volatility gave traders an awesome afternoon of fun (London time). It was the only thing that could push the long bond futures market linit up or limit down i.e. the market was stopped by the circuit breakers.
Now I don't believe any of the data produced by the Bureau of Labour Statistics.
The constant revisions have made the event a complete waste of time. It's politically motivated changes are a disgrace.
The headline number ( for what it's worth), and from a different report the unemployment rate at 4% and rises in average hourly earnings will make it difficult for the FED to cut on Wednesday. Powell is desperate to cut but his colleagues are increasingly taking the opposite stance.
But you can't say it doesn't move markets !
In Focus
Interest Rates Cuts !!
A clearly-signalled 25 basis point cut by the ECB and the presser suggesting that they've been so successful in getting inflation under control, means hope rather than strategy is the driver of monetary policy in one sixth of the world's economy.
Cutting rates while raising inflation projections, is a curious message to capital markets.
Headline 2.6% YoY in April is still significantly above the 2% target and seems to be going in the wrong direction currently.
PPI, massively influenced by energy prices, thanks to the Russia | Ukraine war ( you can call it a war now 'cos Putin said) is all over the place, while dire retail sales and lacklustre GDP show an economy in dire straights. Let's hope Ms Lagarde knows what she's doing and CPI will head lower. Otherwise a Euro currency crisis is a distinct possibility.
Canada Cuts
The Bank of Canada cut 25 basis points as well. It's in the same boat as the EU in terms of the economic difficulty but also. like Australia, has crazy house price inflation driven by mass immigration.
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Denmark, Sweden & Switzerland Cut
US Consumed hammered
Weak manufacturing PMIs and strong Non-manufacturing ISMs muddied the waters further.
In The Background
Commercial Real Estate
Japan
BoJ meeting friday
China
Finally a quiet week in China
Digital Currencies
Australia
What's Next ?
G7 meeting could bring some unexpected surprises
Biden to be axed after primaries (maybe). It would be the last chance for the Democrats before November's election.
FED meeting Wednesday
On June 9th the Agreement between United States and Saudi Arabia to sell Saudi Oil in USD exclusively ends. Saudi Prince has already notified U.S. that this agreement will NOT be renewed and they will no longer accept USD. There has been zero western coverage of this.
Bank of Japan monetary policy meeting on Friday.
Oh yes and US CPI & PPI PPI.
This Week's Important Economic Indicators [London time]
Financial Planning & Analysis Manager
6moThanks Ian!