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It was a trifecta of disinflation disaster in today's numbers, with Walmart adding to the woes with its own deteriorating environment. Retail sales were more than soft, industrial output fell, but most concerning prices fell sharply - including wholesale services costs crashing the most on record.

Eurodollar University's Money & Macro Analysis

Walmart Q1 earnings
https://corporate.walmart.com/content/dam/corporate/documents/newsroom/2025/05/15/walmart-releases-q1-fy26-earnings/q1-fy26-earnings-release.pdf

CNN Walmart warns it will raise prices because of tariffs
https://www.cnn.com/2025/05/15/business/walmart-prices-tariffs

CNBC Walmart CFO says price hikes from tariffs could start later this month, as retailer beats on earnings
https://www.cnbc.com/2025/05/15/walmart-wmt-q1-2026-earnings.html

Bloomberg US Retail Sales Barely Rise, Suggesting Some Spending Pullback
https://www.bloomberg.com/news/articles/2025-05-15/us-retail-sales-barely-rise-suggesting-some-spending-pullback

Bloomberg US Producer Prices Fell Unexpectedly in April as Margins Shrank
https://www.bloomberg.com/news/articles/2025-05-15/us-producer-prices-fall-unexpectedly-as-margins-decline

Reuters US manufacturing output falls in April on weak auto production
https://www.reuters.com/business/autos-transportation/us-manufacturing-output-falls-april-weak-auto-production-2025-05-15/

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Chinese banks cut lending - by a lot - in April, completing the defensive story seen in banking systems all around the world. However, China's is unique in several key aspects, starting with what authorities have been doing trying to change this. The reason why it has come to this for Chinese banks really is not what everyone believes.

Eurodollar University's Money & Macro Analysis

Bloomberg Why China Is Hoping $1.6 Trillion Can Fix Its Hidden Debt Problem
https://www.bloomberg.com/news/articles/2025-04-16/china-economy-can-1-6-trillion-help-solve-xi-s-hidden-debt-problem

Rueters China's property 'whitelist' lifeline stutters amid sector gloom
https://www.reuters.com/world/china/chinas-property-whitelist-lifeline-stutters-amid-sector-gloom-2024-05-14/

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Microsoft announced another round of layoffs. Coming from a company that isn't struggling nearly as much as most, it's an ominous sign. The April CPI shows why and not just for Microsoft. It instead aligns with the biggest problem in the economy, and that's not inflation which was absent from the report despite the start of tariffs. A surprise to Economists, but not to BED.

Eurodollar University's Money & Macro Analysis

CNBC Microsoft laying off about 6,000 people, or 3% of its workforce
https://www.cnbc.com/2025/05/13/microsoft-is-cutting-3percent-of-workers-across-the-software-company.html

Bloomberg Softer-Than-Expected Inflation Points to Muted Tariff Fallout
https://www.bloomberg.com/news/articles/2025-05-13/us-inflation-comes-in-softer-than-forecast-for-another-month

BLS BED/BDM
https://www.bls.gov/bdm/bdmover.htm

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Re-risking accelerated on Wall Street and for many other markets; even bond yields rose. The thinking is if trade wars broke everything, then trade deals fix it. However, the US and China don't have one, And that's only the first of several key misimpressions - starting with the 2018 example. Like then, the incoming data doesn't align with "trade wars broke it."

Eurodollar University's Money & Macro Analysis

Joint Statement on U.S.-China Economic and Trade Meeting in Geneva
https://www.whitehouse.gov/briefings-statements/2025/05/joint-statement-on-u-s-china-economic-and-trade-meeting-in-geneva/

Bloomberg US, China to Slash Tariffs During 90-Day Reprieve for Talks
https://www.bloomberg.com/news/articles/2025-05-12/us-and-china-agree-to-major-reductions-in-tariffs-for-90-days

Bloomberg Japan Rules Out Trade Deal With US That Excludes Auto Tariffs
https://www.bloomberg.com/news/articles/2025-05-12/japan-s-ishiba-says-won-t-do-trade-deal-with-us-excluding-autos

SCMP China’s consumer prices fall in April, fuelling fears of deflation
https://www.scmp.com/economy/economic-indicators/article/3309834/chinas-consumer-prices-fall-april-fuelling-fears-deflation

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What's in a single number? For this one, a whole lot of confirmation plus warning. Consumer sentiment has famously crashed and this one figure holds the key to why. Everything else that's happening comes down to this single deficiency.

Eurodollar University's conversation w/Steve Van Metre

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Canadian payrolls were dismal in April, including the biggest two-month collapse in private jobs since the lockdowns. It isn't just sentiment. While pessimism has soared, results from around the real economy is backing that up with hard data. Not just Canada, also Mexico.

Eurodollar University's Money & Macro Analysis

Jeremy Rudd Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)
https://www.federalreserve.gov/econres/feds/files/2021062pap.pdf

Transcript Chair Powell Press Conference May 2025
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20250507.pdf

Bloomberg Canada Joblessness Hits 6.9% as Tariffs Strike Manufacturing
https://www.bloomberg.com/news/articles/2025-05-09/canada-adds-7-400-jobs-unemployment-jumps-to-6-9

Bank of Canada Financial Stability Report 2025
https://www.bankofcanada.ca/2025/05/financial-stability-report-2025/

SPG Canada Manufacturing PMI April 2025
https://www.pmi.spglobal.com/Public/Home/PressRelease/487ca2cba7784b86aa9d9df3a315d744

SPG Canada Services PMI April 2025
https://www.pmi.spglobal.com/Public/Home/PressRelease/4c356ce1148c420fbee728307ef2b2dc

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Former hardcore hawk, the Bank of England pulled ahead of the Federal Reserve by rejoining the global race to the bottom. And it did so with what is being called a weird three-way split. The split was neither weird nor much of one. Instead what BoE did - and why - has already shown up here in the US. The latest confirmation comes from the Fed's very own data where job fears have exploded for the same reason(s) BoE is acting.

Eurodollar University's Money & Macro Analysis

Bank of England MPR May 2025
https://www.bankofengland.co.uk/monetary-policy-report/2025/may-2025

FOMC Chair May 2025 press conference
https://www.youtube.com/watch?v=8oX4RCJJXAM
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20250507.pdf

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Insiders are looking for the exits. Short selling sharks are circling. Regulated banks are majorly exposed to this credit segment, another one deep within the shadows. Could this explain why market signals remain near or at extremes? From swap spreads to gold ratios, there is deflationary everywhere in them and credit default swaps have cast their blame specifically toward banks.

Eurodollar University's Money & Macro Analysis

Bloomberg Short Sellers Bet Against Private Credit Lenders
https://www.bloomberg.com/news/articles/2025-05-03/short-sellers-bet-against-private-credit-lenders-credit-weekly

IMF Global Financial Stability Report April 2025
https://www.imf.org/en/Publications/GFSR/Issues/2025/04/22/global-financial-stability-report-april-2025

IMF Private Credit
https://www.imf.org/en/Blogs/Articles/2024/04/08/fast-growing-USD2-trillion-private-credit-market-warrants-closer-watch

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