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Another blah day of trading, although volume levels did increase, the trading range was very tight if not for some intraday fireworks with 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.

More importantly, we get import/export prices tomorrow along with claims 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 inflation, that is where we are likely to see it tomorrow. 5-Year CPI swaps traded up again today, closing above 2.6%, their highest level since October 2023.
 

Even 10-year CPI swaps are trading higher and are now 2.54%. These aren’t short-term inflation expectations rising, these are long-term inflation expectations, and what seems concerning about them is where they are currently. I mean, we are talking about a potential new Fed chair that is going to come and start cutting rates, at a time when long-term inflation expectations are in a position to really run higher.
 

Well, the 10/2 today finally broke out of the flag pattern, but it happened because the 2-year fell by 5 bps, and the 10-year fell 3 bps. It could be a false start, but we should find out more in the coming days.
 

META broke support today, 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 in its recovery, and if Meta starts to fade, I think it will tell us a lot about where the market goes overall.
 

Anyway, that’s all for now.

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