The Japanese Yen continues to depreciate and is near 157 vs the USD, but it's also depreciating vs China's currency; and Japan is an important trading partner for China. Not just a strong dollar story. Currency markets are getting spicy.

Watching that 10-year Treasury yield ahead of PCE. With important econ data, the Fed meeting, and an overall bearish trend in Tsys colliding over the next week, 4.8% is still in sight.

Playing devil's advocate on growth fears: private domestic demand (GDP ex-inventories, gov't, and trade) came in at 3.1% in Q1, supporting the idea that the 'underlying' trend of econ growth remained strong...

Does this hold today??

Q1 GDP growth came in at 1.6%, below all economist estimates and the lowest since Q2 2022. Consumer spending was below ests, net exports took a full percentage point off GDP, and q/q core PCE came in hotter than expected. Rough print for markets.

Treasury yields are up 7-10bps after the weaker growth & hotter inflation data, while stocks -- which were already down 0.6% on Meta's post-earnings selloff -- are down over 1% pre-market.

Much is being made of the strong momentum from Utilities lately -- the sector is comfortably above moving averages and bordering on overbought -- but still firmly below where it was for much of 2022 and 2023.

The Japanese Yen pierced 155 and is showing increased volatility. Japan's Ministry of Finance could try to prevent further depreciation--155 was thought of as a key level. Intervention chatter strong today.

US Treasurys with a maturity of 10 years or more are down more than 40% since their 2020 peak, not to mention the length of this drawdown is by far the longest on record (h/t Strategas)

Trailing 12m earnings have been flat since mid-2022, enabling the long-term trend to 'catch up'. Q1 earnings season is still young...

All eyes on guidance this week, with over 160 S&P 500 constituents set to report earnings. Q1 results will be important, but guidance and revisions for future quarters perhaps even more important as markets grapple with valuations and momentum.

The S&P 500 is dipping below 5000. Perhaps a psychologically important round number for investors. Lots of big earnings on deck next week, will be pivotal for direction from here.

Despite markets acting calmly at the open, there was significant overnight volatility on the news of Israeli strikes against Iran--yields fell 10bps, stock index futures were down 1.5%, gold was up 1.5%, and oil was up 4%.

Bloomberg's NLP Fedspeak index has started inching higher, indicating added hawkishness. Traders are still expecting nearly 96bps in cuts from the Fed (i.e. four rate cuts) over the next 18 months--Fedspeak suggests otherwise.

💥New blog: 'Worth the Wait?' on possible paths for rates as uncertainty mounts. sofi.com/article/invest…

Comments on inflation from the Fed's newly released Beige Book don't seem so promising:

'Price increases were...running at about the same pace as in the last report [Feb].'
'...contacts...perceived upside risks to near-term inflation in both input prices and output prices.'

Oil prices are currently above the $79 level the Biden admin has indicated it would refill the SPR. If prices rise further, are more releases on the table? Prices were much higher when releases began in 2022 (>$100) and circumstances were different, but...