CITI'S HARD DATA AT TROUBLING TWO YEAR LOW!

Citi bank is showing the fall in the US Hard Data Surprise Index which on Friday tumbled to a fresh two-year low.

The fall to such low levels occurred due to the near one standard deviation miss in June retail sales.  In contrast, US soft data surprises are staging somewhat of a recovery at the moment having bounced off recent lows of -56 to -6. This increase was largely due to positive surprises from both ISM surveys.

he steep decline in the "hard" data : while until now conventional wisdom has generally assumed that the US economy is broadly rebounding, with conventional wisdom assuming a replay of the 2016 event, Citi cautions that "the fall in the Citi US data change index currently is interesting." One can insert a different word here.

CITI'S CHART OF THE WEEK

Where does the above leave Citi?

Taking all of this into account, we harbor growing concerns for equity markets and entered into a cross-asset trade, where we positioned for equity market downside, funded via selling volatility in oil markets.

To which Janet Yellen had a response: she pulled at 180 and turned dovish this week, sending global stocks to all time highs, followed by even worse economic data in the US, which in turns sent the S&P to a new all time high as animal spirits got reignited (See top chart) ...