Inflation & Unemployment, Chip Shortages and Musk's New Dogetwit

The cryptocurrency market was optimistic yesterday. Everyone pretended as best they could that the environment was an incomprehensible anomaly, which it is better not to remember. Double-digit daily growth rates across virtually the entire spectrum of the market indicate quite definitely that the memory of today's investors is at the level of a goldfish (according to the old myth of 3 seconds).

It would seem that just a couple of days ago, everyone cursed Musk with his tweets, which in many ways contributed to the crypto-pacalypse on Wednesday. But already yesterday he was again worn in his arms, especially by dogecoin fans, who received another hype injection from Musk. Although there is a feeling that the eco environment of his Twitter readers is becoming more and more self-contained. At least for the uninitiated, it is difficult to understand what was so positive for the dogecoin in yesterday's tweet: "How much is this doge in the window." In our opinion, there is no point in tweeting, or in the current prices for dogecoin, or in Musk's attempts to catch up with the hype around DOGE.

Meanwhile, with each new portion of macroeconomic data, the inflation problem becomes more and more material. For example, in April producer prices in Germany rose by 0.8% MoM and 5.2% YoY (levels not seen since 2011). Tellingly, the previous period of similarly rapid growth in manufacturing inflation in Germany (2010-2011) ended with an increase in ECB rates, after which inflation began to decline. Against the background of this information, the yield on German bonds climbed up (reached a two-year maximum). Thus, the markets are trying to discount against the future tightening of the ECB's monetary policy. The first step of which, obviously, will be to reduce the volume of purchases of bonds.

On the other side of the Atlantic, Ford has decided to temporarily shut down a number of its factories. The reason is the global shortage of semiconductor chips. According to the CFO, Ford expects to lose about 50% of planned production in the second quarter due to chip shortages. And Ford is not an exception to the rule. It is worth waiting for similar news from other automakers.