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Oil is heading down today trading as if the situation in Hormuz was normalized, when in fact it’s far from normal as we speak. Take a look at the top chart below: oil tankers traffic is still very low compared to pre war levels, and progress on negotiations is slow and fragile. There are still major points to agree in the MoU between Iran and the U.S. Trump is trying to convince the public the worst is over, but reality shows that is not still the case. Oil is trading below 7

The market dynamic is accelerating and it’s seems to be approaching a delicate phase. Please take a look at the charts below: on the top one, you can see how the momentum factor is, by far, the dominant force in this market, more than 3X the growth factor. What are the implications? Take a look now at the second and third charts; companies are taking advantage of the insatiable market appetite for equities, to raise capital on public markets. SpaceX, Anthropic, Google and oth

The U.S. treasury auctioned 3 and 6 month T-bills yesterday, and both increased their yield enough to raise some eye brows. The 6 month bill is paging you now an annualized yield of 3.84% (from 3.68%). The 2 year Treasury bond real yield is now above 2%, with inflation ramping up. Investors are starting to realize that Mr Warsh is right; inflation is a choice, and we’ve chosen to live in a more inflationary world. Yields are just adapting to the new reality. Absent a recessio

The world keeps waiting on diplomacy to work its magic between Iran and the U.S., but it may have to wait a little longer. Talks began yesterday, amid tensions: Iran had briefly closed the Strait of Hormuz, and Trump issued threats of renewed strikes if Iran pursued nuclear weapons or supported Hezbollah. Vance emphasized diplomacy and an outstretched hand while stressing U.S. red lines. That’s the infamous “carrot and stick” American strategy. Sessions lasted into the night,

Several major central banks appear to be pivoting toward or initiating a new rate hiking cycle, driven primarily by persistent or resurgent inflation pressures exacerbated by geopolitical tensions, particularly the Iran conflict’s impact on energy prices. Yesterday, Iranian authorities announced the closure of the Strait of Hormuz again, which signals the fragility of the negotiations, and points to a sustained energy supply disruption. The European Central Bank raised its ke

Tokens are the fundamental unit of consumption in large language models (LLMs) and other AI systems. They represent chunks of text—roughly sub-word pieces that models process for both input, (your prompt, context, documents), and output (the response). Why is this relevant now? Because the consumption of tokens is exploding, and they are creating their own economy. And it’s very likely that they will be one of the most important components of the global economy if AI delivers

Another day, another surprise in the negotiations between the US and Iran. The memorandum of understanding (MoU) was signed electronically on Wednesday, marking a preliminary framework to extend a fragile ceasefire from the conflict. Thanks to that framework, we should have Immediate and permanent end to military operations on all fronts, including Lebanon and the reopening of the strait of Hormuz. With that, comes a 60-day window for negotiations on a more comprehensive deal

In his first FOMC press conference yesterday, following a decision to hold the federal funds rate steady at 3.5%-3.75%, new Fed Chair Kevin Warsh outlined a vision for evolving the Federal Reserve’s operations through greater focus on its core dual mandate (price stability and maximum employment), reduced forward guidance, and structured reviews via task forces. Warsh strongly emphasized the FOMC’s unanimous commitment to delivering price stability, noting that inflation has

Optimism around an interim US-Iran peace/framework deal, potentially easing sanctions and reopening aspects of the Strait of Hormuz, has driven oil prices lower, with Brent and WTI holding or trading below $80. 2 Iranian oil supertankers appear to have cleared the U.S. blockade in Hormuz and might be on its way to its final destination. It does look like the deal might go through. They’re expected to sign it on Friday in Geneva. The Dow. Jones Industrial Average hit a new all

The Bank of Japan (BOJ) raised its short-term policy rate by 25 basis points to 1.0% yesterday. This is the highest level since 1995 (a 31-year high), marking the BOJ’s fifth hike since ending negative rates in March 2024. The decision was widely expected (markets had priced in ~90-100% probability) and passed by a 7-1 vote, with one dissenter citing downside risks to the economy. The move aims to address inflation pressures from elevated energy prices linked to the Iranian c

Will this be the good one? The U.S. and Iran appear to have reached a peace agreement. Details vary slightly by source (US and Iranian sides emphasize different aspects), but the core elements include: 1. Immediate and permanent cessation of hostilities on all fronts, including Lebanon. 2. US commitment to non-interference in Iran’s internal affairs and respect for Iranian sovereignty. 3. Lifting of the US naval blockade on Iranian ports within 30 days. 4. US withdrawal o

No rate change is expected at this week’s FOMC meeting. Rates should remain in the 3.50%-3.75% target range. This is Kevin Warsh’s first meeting as Fed Chair, and it includes a Summary of Economic Projections (SEP, or “dot plot”) along with his post-meeting press conference. According to Fed Funds Futures, the probability of “no move” is 97.1% (see chart below. No economist in recent Reuters polling expects a cut, and a hike is extremely unlikely now. The statement is likely

The highly anticipated event of the first half of the year finally happened: SpaceX (ticker: SPCX) went public via one of the largest and most anticipated IPOs in history on June 12, 2026. Key IPO Details: (1) IPO Price: Fixed at $135 per share (a “take-it-or-leave-it” price rather than the more common range-and-price-later approach). (2) Shares Offered: Approximately 555.56 million Class A common shares. (3) Amount Raised: Roughly $75 billion, the largest IPO ever by proceed

The May 2026 U.S. jobs report released yesterday showed stronger-than-expected labor market resilience. Nonfarm payroll employment rose by 172,000 in May. This beat consensus forecasts (around 85,000) and followed an upwardly revised April gain of 179,000. Unemployment rate held steady at 4.3%. You would think the market would like the news. But stocks sold off sharply on the stronger than expected data, as it diminished hopes for imminent Fed easing and pushed bond yields hi

Another day, another headline of possible peace deal with Iran, but as usual, with strings attached. Which means no deal. In the domestic front, things are moving in credit markets with the hyperscalers. The CapEx demand is becoming so big that by the end of the year, almost all the operating cash flow from these companies will go to AI related investments (bottom chart). That means they will continue to tap the bond market, and investors are starting to price that in. In the

The U.S. published its monthly inflation data yesterday, just a week before the June FOMC meeting which will be the first one for the new chairman of the Fed, Kevin Warsh. The top chart below is worth more than a thousand words: the economy is running hot. The main reason is the energy supply shock provoked by the Iran conflict and the closure of the strait of Hormuz. And if you look at the bottom chart, which shows the global strategic oil reserves, you can see that the “fun

When we thought the U.S.- Iran peace deal was going to be signed, a US Army Apache helicopter was downed near the Strait of Hormuz, off the coast of Oman. The two crew members were rescued uninjured by a US sea drone. President Donald Trump blamed Iran for the incident, as a response, The US military launched “self-defense” airstrikes on Iranian targets, primarily in southern Iran near Bandar Abbas and Qeshm Island. Strikes hit air defense systems, ground control stations, su

Inflation is slowly but surely coming back, not only in the U.S., but globally. Take a look at the table below. Even though price stability is a mandate for central banks, only 8 out of the top 30 have inflation rates that are below their targets. And in most cases, the CPI is so massaged that the real inflation is way higher than what the CPI reflects. As a consequence, the global economy is going to run hot for a while. In the case of the U.S., the new Fed chairman believes

At dawn today, Israel decided to launch an air strike on Iran infrastructure, in response to ballistic missiles sent by Iran to Israel (reportedly intercepted), which came in response to Israeli attacks to Hezbollah in Lebanon. This occurred despite the fact that Trump asked Netanyahu not to proceed with any attack and accept the (supposedly) deal with Iran. Perhaps it’s just a trick by the americans to allow Israel to attack Iran and blame them for blowing up a deal that did

The week is starting red hot on the far east. Japan and the Philippines have officially begun negotiations on where exactly the boundaries of their exclusive economic zones (EEZs) lie in the Pacific Ocean. These zones happen to be too close to or even within Taiwan realm, and China has decided it’s not going to let this one pass. This is a huge gray area because depending on who you ask, China does not have jurisdiction over Taiwan. An EEZ extends up to 200 nautical miles (ab