Up and Adam

The report highlights heightened inflation concerns following a hot April PPI print and notes a record inverse correlation between stocks and yields. It also expresses caution regarding UK assets due to political turmoil and the sustainability of SPR oil drawdowns.

Key Takeaways

• 1.April PPI data came in hotter than expected, with core PPI reaching its fastest growth rate since December 2022, driven by service costs.
• 2.Equity markets are increasingly sensitive to yield changes, as the inverse correlation between the S&P 500 and 10-year yields is at its highest level since 1999.
• 3.UK political instability and election losses have led to an 'underweight' rating on UK assets, including the FTSE 100 and the pound.

Table of Contents

• Previous Close
• Future
• Today's Events
• Hot PPI Print Keeps Inflation Concerns In Focus; Trade Prices On Deck At 8:30 AM ET
• It May Not Feel That Way, But Equity Correlation To Yields Is Actually Inverse
• Heightened Inflation Risks Lead To Tepid Demand At Treasury Auctions Despite Higher Yields
• UK Faces Political Turbulence—A Potential Risk For Its Equities, Bonds, And The Pound
• Largest Weekly Release From The SPR Helps Mitigate Price Shock, But Raises Longer-Term Questions
• Disclosures

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