1. Morgan Stanley expects inflation to come down next year.

Meanwhile, Euro zone bond yields hover around multi-year highs as investors are waiting for this week's ECB meeting.
The ECB is widely expected to raise rates, with the key question for investors being whether they will give any indications about their future plans.
Markets currently see around an 80% chance of a further rate hike by December this year, on top of a move this week and in June.

2. The debasement trade starts with the Japanese Yen.

The debasement trade is an investment strategy where people move money out of traditional fiat currencies (like the U.S. dollar or euro) and into scarce hard assets to protect their purchasing power.
Greater demand for Japanese domestic assets (higher Japanese bond yields) would imply repatriation from overseas holdings, including US Treasuries, generating dollar sales against the yen as active real-money portfolio reallocation flows take place.
JPMorgan estimated that roughly $100b of bearish yen positions remain outstanding and said a complete unwind could theoretically push the yen yen into a 142-146 range.

3. The trillion dollar question behind the AI trade.

The bullish case requires the ubiquitous Jevons paradox (the idea that greater efficiency in using a resource can increase, rather than reduce, consumption of it) to do a lot of the heavy lifting. If token price falls, it’s assumed demand for compute must rise sufficiently to compensate.
This applies to the cost of intelligence too. For instance, if open-source models — with less of an incentive to burn more tokens than proprietary models — become more efficient at completing tasks, users and agents will just increase their demand to do more of them.
But what if token demand isn’t limitless? That is perhaps the biggest structural question of the bullish argument.
For the the task universe to keep growing, two things are necessary: models must keep improving, and there’s an ever-growing set of new tasks that they can handle. Neither can be taken for granted.

Below: token prices are falling.

4. Diagnostic companies.

The excitement surrounding Moderna and Merck’s personalized mRNA cancer vaccine added more than $50 billion in combined market value for the two drug companies. But it is also creating a gold rush in a growing corner of healthcare: tumor sequencing.
Personalized cancer therapies require a genetic roadmap for each patient. The tumor has to be sequenced to identify the mutations the vaccine should target. If these therapies become blockbusters, the diagnostic companies doing that sequencing could hold a lucrative tollbooth on every dose.

5. Bottlenecks are being uncovered in every part of the AI value chain.

Some bite more than others.
Here is an overview of supplier concentration and supply scarcity.

Not a subscriber yet?