The US dollar caught a strong bid to start the week. The prospects that Yellen will keep the June rate hike in play after the FOMC minutes are diminishing it may be lending the dollar support, though US rates are only slightly firmer.
The Greek issue has been sufficiently resolved for now that investors’ focus will shift elsewhere in the week ahead. The answers to three questions will dominate the market’s attention. 1) How strong are the deflationary forces? 2) Are the cyclical recoveries still intact? 3) What is the outlook for Fed policy?
Minutes after the German finance ministry rejected Greece’s offer, the ECB released its first record of its recent meeting. The only item that rises to the level of a surprise might be that the ECB considered buying corporate bonds.
President Obama is asking congress to raise the minimum wage (MW) to $10.10 an hour, from $7.25. The appeal has taken place only months after Gov. Jerry Brown of California signed a bill to raise the MW in California to $10 an hour in 2016.
Although it is easy to think of a MW increase as a benefit on the surface, it is not that simple. The increase, alongside at least two state proposals, will only harm small businesses, and reduce the amount of full or part-time jobs.
Less Americans are buying houses and applying for mortgages in a trend that is hurting the new housing and construction industries.
In three separate reports from different agencies and private firms released Wednesday, the United States real estate sector showed marked weakness while manufacturing productivity was significantly weaker than expected.
The capital markets are particularly difficult to navigate at the moment. The news stream is noisy. There are three confusing issues: the Fed, Greece and Australia.
What should one think about the FOMC minutes? The market clearly saw the minutes as dovish and reducing the chances of a June lift-off. The debt market rallied, with the December 2015, Fed funds implied rate slipping below 50 bp, and the dollar came off. However, we think that 1) the market is exaggerating the dovishness and 2) take on board events since last month’s meeting.
On a normal Friday, Kara-Suu’s Al-Sarahsiy Mosque is packed with thousands of worshipers from across southern Kyrgyzstan. They come to this town of 20,000 to listen to the sermons of Rashot Kamalov, the mosque’s charismatic imam. Kamalov is respected for criticizing brutal and corrupt officials, society’s moral decline and Western pop culture.
Tomorrow is an important day for the ECB. Yes, it does appear a Greek compromise is getting closer as the brink draws nearer. Yes, the ECB is preparing to launch its new and more aggressive asset purchase program, just as the Eurozone real sector data and financial data are improving.
The recent Japanese hostage crisis has divided public opinion on its dealings in the Middle East. On 20 January, the extremist organisation Islamic State of Iraq and Syria (ISIS) released an online video showing two Japanese men kneeling in orange jumpsuits beside a masked man who demanded that Japan pay a US$200 million ransom within three days. The sum was no coincidence. On 17 January Japanese Prime Minister Shinzo Abe pledged US$200 million in non-military aid for countries fighting ISIS.
As banks slowly approach the age of digitalization they already seem to be facing tough challenges that are related to their own systems’ security. Banks have been victims to many cyber crimes but so far the crimes had been related to hacking into customers’ accounts. The shift from hacking customers’ accounts to hacking banks’ systems seems to be one of the latest and perhaps the biggest and quietest cyber crimes. In the past, bank robberies might not have been so planned and professional but with changes in technology, even cyber crimes seem to keep up.
