Inflation in Europe - September?
Euro-zone inflation slowed in June – signals more evidence that price pressures are moving towards ECB target of 2.0%
- June CPI rose at annual 2.5% (in line with estimates and down from 2.6% in May). Core CPI remained unchanged at 2.9% but…
- …resilient strength in labor market is contributing to upward wage pressures that remain a concern (especially services sector)
- ECB predicts that inflation will move sideways for rest of 2024, washing out base effect from statistics
- Lagarde insists that more time and more data is needed to make sure that risks for inflation resurgence have passed. September gains traction
PCE - one small step closer
Fed’s preferred inflation measure decelerated in May – bolstering the case for lower interests rates later this year.
- Core PCE index for May increased by 0.1% from prior month – smallest advance since late 2020. Yields fell on the news
- Data was influenced by declining gasoline prices and a drag from durable goods.
- Fed will remain data dependent but…
- …the report gives Fed officials some hope that inflation is moving in right direction, also given that signs have been arising that the US job market is losing steam – payrolls on Friday will as always be highly scrutinized
Biden vs. Biden
Biden’s disastrous performance during the first debate increases concerns and doubts over his candidacy
- Democrats publicly (and privately) expressed alarm in aftermath questioning whether the President should remain in the race. Nevertheless he should be confirmed as the democratic candidate
- Biden’s objective was to reassure the public of his strength and stamina – mission failed! Trump now appears to be clear favorite to capture the White House
- Trump victory would have big consequences for US trade policies, tax system, civil rights and the nation’s relationships with allies and adversaries.
- The Supreme Court’s decision on President’s immunity opens a new chapter in US history
Own goal
As most pundits had anticipated, the results showed the far right (Rassemblement National) clearly in the lead:
- With 33.1% of the votes, the RN comfortably beat the left (Nouveau Front Populaire) on 28.1%. Macron’s Ensemble trailed on 20.8%
- An own-goal saved Les Bleus in the UEFA 2024 quarter-final, but Macron’s own-goal looks ominous
- Due to the very high turnout, more than 300 constituencies are facing a three-way second ballot; candidates will withdraw in order to contain the far-right
- Bond and equities initially reacted positively to the prospect of a hung parliament, but a lot still can happen
Why generative AI?
Main Generative AI applications are video, image, chat, coding, translation, music as well as tools for lawyers, doctors, architects and many more ….
- Graphics processing units (GPU) and Application-Specific Integrated Circuits (ASIC) play a key role in driving AI growth forward
- In addition High Bandwidth Memory (HBM) which are specifically designed for high-performance graphic accelerators (GPUs), datacentre AI ASICs are on the step for extraordinary growth
- The third pillar of the AI value chain is the Advanced packaging market, expanding at 10% CAGR until 2028.
- We are optimistic for the whole value chain of AI and see a correction of the major players as a buying opportunity
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