Well, we just got some data. Boom! That's pretty dang exciting and it makes me wanna say the lead. Yes, Absolutely. Because guess what? We just got the Joltz data release and listen to this.

We were expecting 10.5 million. The prior read was 10.824 They revised the prior read from 10.824 to 10.563 That is jobs openings, right? The Jolts is the job openings and labor turnover turnover survey. So in other words, they went from 10.8 to 10.5 in the last reading. Well, now the survey was projecting 10.5 for the current reading.

It actually came in at 9.931 Really Good Beat! We watched that live together with course member livestream and phenomenal. On top of that, we also got Factory order data a little bit weak. here. we got the prior Factory order data coming in at negative 1.6 That was revised down even more to 2.1 The current survey was negative half a percent and we got negative 0.7 So worse than expected Factory orders.

So you're getting a softening labor market now and a softening Factory order section. This should be a big bad signal to the FED stop tightening so much you tight wads. Anyway, then we got a Durable Good Orders release that was expected to come in at negative one percent. It did Durable Good orders with the exception of Transportation came in at negative one percent.

uh, or sorry. negative point one percent that is versus the expectation of zero. So pretty much everything came in weaker. Remember what durables are? They're like home appliances.

You know, think like big things like Machinery or cars or um, washing machines appliances. CNC machines? whatever. right? So it's kind of like the components that help you do stuff compared to factory orders. Being like, all right, we have the components.

what are we making with them right? Uh, and in this case, all of the data came in soft. This is very important data for the Federal Reserve The Jolts data report because it tells us this whole idea of a wage price spiral is a myth and the FED needs to relax because all of the leading indicators are pointing to disinflation. Yet the FED continues to hike as if we're experiencing re-inflation and we're not. When we look at earnings calls across the board, we are not seeing the indicators of inflation still here.

The only place maybe we're seeing it would be in Aerospace and in a weird way, pet food. But beyond that, we're just not given the fact of the availability of supply of laborers willing to work for Uber and Lyft We have plenty of people willing to work. You remember I've said many times before, Cloudflare I received over 400 000 applications for somewhere around thirteen hundred jobs as they talked about in their earnings call. McDonald's is expected to lay off a bunch of corporate workers this week.

Despite the fact that their franchise model is actually extremely profitable, they're feeling the squeeze as well. When we went through the earnings calls of other companies this week as well, we saw the same thing. No indications of a wage price spiral. Darden Is no longer able to raise prices like they previously were.

Although everybody was talking about how, oh, the restaurant industry continues to raise prices. not Darden anymore. They've raised prices yes, and prices are higher than they used to be. but the rate of increase has slowed.

Canadian Solar sees substantial deflation? Uh, ahead? Uh, what do we got? Dave and Busters Talking about both disinflation in labor and goods? Look at that. I'm going to start with labor inflation. We're seeing some relief there. I Think when you look at hourly wages sequentially, they're relatively flat.

which means quarter over quarter. I Feel like we've got that stabilized and with commodities, we've actually seen a nice decline. This is Dave Busters It's not just them, it's multiple companies. Starbucks Chipotle All the companies are almost in alignment.

I Read earnings calls almost daily and there just seems to be this extreme alignment on there is no inflation anymore. Yes, prices have gone up, but they're not continuing to run away. Which is great because it's a big indicator to the FED to do. What to pause? Follow the lead of the Bank of Australia and pause.

Let's talk about the Bank of Australia Now and remember, we've got European inflation expectations as well that came in softer than expected. But for now, Australian Central Bank and what it means for America Let's take a look at the first pause of the banking crisis. So one of the first and major pauses of the banking crisis is in the particular Uh institution. that paused is actually one that led the United States on rate hikes.

That's a sign that maybe the United States will soon follow this particular bank. So think about it. They hiked, then the U.S hiked. Now they've paused.

And what could they possibly cite? And how could their information be similar to what we're experiencing in the United States. Well, after you read this statement with me, you'll see Wow. it's surprisingly similar. Let's take a look at it right here.

This is the Bank of Australia The board decided to leave the cash rate target unchanged today at 3.6 In other words, pause the big old pauses in at Australian. Remember they they started hiking before us. That's important. Uh, All right, the board took the decision to hold interest rates steady this month and provide additional time to assess the impact of the increase in interest rates.

To date, and the economic Outlook Global inflation they say remains High uh. and this is actually Something That We're wanting to pay attention to as well. In the United States is, wait a minute If uh, yes, inflation is high, why would you potentially pause? Well, they give us some reasons and in my opinion it actually might give some indications to the United States. Take a look at this: Global Inflation remains high in headline terms.

it is moderating. Although service price inflation remains high in many economies, service price inflation is of course, that third type of inflation that we're facing in the United States as well. phase one being goods and disinflation, phase two being Housing Services disinflation, and then phase three being all other services specifically Healthcare, retail, hospitality, and otherwise. And this remains high in many economies.

The outlook for the global economy remains subdued, with below average growth expected this year. And next, the recent banking system problems in the U.S and Switzerland have resulted in volatility in the financial market and a reassessment of outlooks for Global interest rates. These problems are expected to lead to tighter Financial conditions, which would be an additional headwind for the global economy. So they, like us, are recognizing this potential for tighter Financial conditions, leading to basically the equivalent of more hikes.

So that's potentially why they're taking a pause. Now, listen to this on CPI and inflation. Well, CPI being inflation, a range of information, including monthly CPI indicators suggests that inflation has peaked in Australia. Now, this is good because we would imagine that the Federal Reserve in Jerome Powell might say something convincingly like this at some point in the near future as well.

Imagine if Jerome Powell came out and the next meeting in May and said inflation's peaked, we're confident of it. It would Really, if they didn't pause, then lead markets to start pricing in. Oh, they're setting up for a pause and be quite bullish because remember, nobody really expects the FED in this cycle to actually cut rates until inflation is conquered. That's a big deal.

and I Think a lot of folks forget that the FED isn't here to cut at the sign of potentially a recession. If anything, they are engineering this recession in order to make sure inflation has been convincingly conquered. Multiple different reports whether it's JP, Morgan Morgan Stanley whether they're Bears or bulls suggest it's clear the FED is not cutting anytime soon until inflation is conquered. but Australia actually gives us hope that wait a minute.

Maybe maybe that Peak is closer than we think or that Peak is already well behind us to the point where central banks can start reacting. And so that makes this such a unique occurrence. where the bank of Australia which again led the rate hike rate increase a cycle is now pausing. Goods Price inflation is expected to moderate over the months ahead due to global developments and software demand in Australia.

Meanwhile, rents are increasing at a faster Pace In some years and vacancy rates are low, the price of utilities is rising, and the Central Bank forecasts for inflation is expect directed to decline this year and next to around three percent by mid 25, medium-term inflation expectations remain anchored and it's important this Remains the case. This is also quite interesting because what you have is the central banks basically saying in Australia hey, look, we want to get to about a three percent inflation Target and we're willing to wait until 2025 for that to happen. Now that's pretty incredible. It's almost as incredible as the paid promotion here to get 12 free Stocks by going to Metcaven.com a free link down below.

Uh, but think about that for a moment if the bank of Australia is saying look, we're going to pause. We realize inflation is still high, but we're at Peak. Let's now just let our raid hikes actually function and we're okay with not only a three percent inflation Target but we're willing to wait another two and a quarter years to get to three percent. They said it'll be three percent by mid 25 is two years and a quarter is how long they're willing to wait to not get to two percent, but to get to three percent And this could be something that our Federal Reserve does as well.

All they have to do is say yeah, we're okay with an average of two percent by mid 2025. Kind of interesting. Let's keep going with uh, the statement from the Royal Bank of Australia Oh, there we go. Fix that, all right.

So growth in the Australian economy has slowed with growth over the next couple of years expected to be below Trend that's been drawn Powell's goal as well to push us into an environment of below Trend growth. There is further evidence that the combination of higher interest rates, cost of living pressures, and the decline in housing prices is leading a substantial slowing in household spending. While some households have substantial savings buffers, others are experiencing a painful squeeze in their finances. This is usually the difference between poor income households and wealthier households.

The unemployment rate is near a 50-year low and unemployment is also low. Many firms continue to experience difficulty hiring workers, although some report an easing in labor shortages and the number of vacancies has declined. So very similar again to the United States very low unemployment. Probably also our 50-year low in unemployment and a difficulty to hire new workers.

But things are starting to loosen and those are the conditions that led Australia to pause starting to sound very similar to the United States Right now we're sitting at about a 50 50 chance of pausing I Do think there'll be a psychological benefit to the Federal Reserve to getting us to five percent, so I wouldn't be surprised if there's one more hike in the pipeline and then a pause, especially since right now at 4.75 and I think hearing okay fed lower bound rate is five percent is a good psychological way to show the FED is really serious about inflation. But uh, but beyond that I think further hikes are less certain, especially since now you've got the Bank of Australia saying wage growth even though it's growing is actually consistent with their inflation Target and their goal is to return to a two to three percent inflation regime. The path to a soft Landing remains a narrow one, but they're taking the steps to get through a soft Landing by pausing now I Personally I Think that's that's uh, very fascinating I Want to look now in reaction to this at the Goldman Sachs Financial conditions index and maybe what we can do as well is look at inflation break evens because generally what we want to see are that Financial conditions are at least somewhat elevated. they don't necessarily have to be as high as previously, and we want to see that the five-year Break Even Inflation rate is staying stable and not skyrocketing after those OPEC production Cuts Yesterday we did see the five-year break even take up, so it'd be good to see how it's moving today.

I Have both of those charts, so let's pull those up and then evaluate those alongside what we just heard from the Bank of Australia. So the first chart is right here. Oops, Right here there we go. This is the first chart.

This is the five year Break Even inflation rate. You can see we had a nice little surge here after. uh, you know, an oil oil price cut or sorry, oil production cut, but it really shrunk yesterday. This surge was actually a lot higher.

I Would go as far as saying we were up to about 2.6 yesterday on the five year break. Even so, we've really dropped down some of the severity of those oil production Cuts here in terms of inflation expectation. so I would say that's actually very good news. I Don't think it's so terrible that we remain potentially along this sort of average right here, which would be about the last nine month average.

That's probably not horrible. I Do think before we get any kind of cuts, we need to see this level down to about 1.6 so it's going to be a moment before we actually get that down. Uh, and then here we have the Goldman Sachs Financial Conditions Index This Titan substantially during the Uh banking crisis as it was starting. but Financial conditions actually quickly loosened again and so right now we're sitting at some of the lower levels that we've been in since December and about the end of January So Goldman Sachs Financial conditions lowering slightly.

Uh, this. uh, this all comes at the same time as you've got the 10-year treasury yield right now, sitting at 3.46 The two-year just for comparison. The two-year treasury yield right now is sitting at just about 4.01 so you've still got that inversion of about 55 basis points between the two and the 10-year at the moment. The three month, which is another pretty common one, is sitting at 4.9 which is pretty widely inverted.

4.9 to 3.46 puts you at almost a 1.4 percentage point in version. Pretty substantial between the two. and if we look at that historically, I Know we've had some recent re-steepening of the curves, and often people like to say that as the curve re-stepens that's when you know a recession is imminent. But so far, it doesn't actually seem like that's happening to the three month tenure.

That did happen. With the fives and the tens, you got some re-steepening the twos and the tens. and for those two, but you're not seeing any of that At the Fed's preferred measure of recession, which is actually this one right Here, This is what your three month tenure looks like. That's the math that I just sort of mental math calculated.

and look how steep this inversion has gotten here. I'll hide myself for a second so you can see this a little bit more broadly. There you go. Look how steep that is.

144 basis points 1.44 Here of inversion, you've had some volatility, but I think the trend is exceptionally clear here when we draw a line, not a curved line. There we go. When we draw sort of the trend line here, it suggests we're still substantially inverting relative to, uh, seeing any kind of, uh, steepening of that curve. Now again, usually the steepening is the painful part, unless of course this is just a measure of hey, you know we still expect time, And this is the only counter argument against the inversion of the yield curve.

Hey, well, the yield curve is as inverted as it is, because, well, obviously, inflation is going to be high for the next few months. so we're going to demand a higher yield now than we will 10 years from now. You're really taking the polar extremes, right? The near term and the long term. Basically purely liquid and almost purely eLiquid.

Although treasuries are relatively liquid, it from a Time perspective, it makes a lot of sense that you could just hold the three months to maturity. and it's basically like cash. We do a lot of that with House Hack a lot of rolling three months. So uh, that's pretty remarkable Now, not only is that remarkable, but it's worth keeping an eye on.

Uh, these, uh, these what the Bank of Australia is doing and other central banks are doing because it really potentially can give us a leading indicator. especially since the bank of Australia led the Fed. So with that said, remember Bank of Australia leading indicator and they just paused. Their arguments for pausing is: let the lagging effects hit.

We don't have a wage price spiral. Wages are growing as expected. we're slightly below Trend growth and maybe we can actually thread the needle of a soft Landing nobody. Well, I should say very few people actually think that's possible to stick this off Landing But there is a lot of Hope.

But always remember, hope is not an investing strategy. Instead, do your own fundamental analysis or join us in the fundamental live streams link below.