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Economic Conditions

6 September 2016

Meanwhile, the Rest of the World Markets had a Work Day

Several developments took place while US markets were closed for its Labor Day holiday.  Most of the economic news was favorable.  This included a strong snap back in the UK service PMI,  more evidence that the moral suasion campaign to...

5 September 2016

Buck(ing) the Data

The US dollar showed an unexpected resiliency to the disappointing August employment data.  The dollar's resilience in the face of the jobs data may reflect that many see the report did not alter investors' or policymakers' information set.  It did not...

2 September 2016

Now about that September Rate Hike

The US grew 151k jobs last month and when coupled with the 20k upward revision to the July figure the net job creation is not far from the 170k-180k median expectation.  However, the details were more disappointing.  Average hourly earnings...

2 September 2016

Jobs Report, and more about UK Data

The US dollar is little changed ahead of the job report.  Our near-term bias is for a lower dollar.   Sterling is flat and is holding on to about a 1% gain this week.  The Japanese yen is about a 0.3%...

30 August 2016

Decoding the R* (R-Star) Mystery

The market recognizes that the indication by the FOMC at the end of last year that four rates hikes in 2016 may be appropriate was far from the mark.  At the same time, investors are coming around to the prospects...

30 August 2016

Odds of a September Rate Hike Move Higher

The US dollar is trading firmly, largely within yesterday's ranges.  The odds implied by the September Fed fund futures eased to 36% from 42% before the weekend, but ahead of Fischer's Bloomberg TV appearance, and tomorrow's ADP employment estimate, the...

29 August 2016

Yellen is Part of a Larger Equation

With 17 simple words and the help of clarification from her deputy, Yellen changed the near-term dynamics in the capital markets.  By saying that "...I believe that case for an increase in the federal funds rate has strengthened in recent...

29 August 2016

Summer goes On, but not the Market Doldrums

The US dollar had spent the last full week of August mostly confined to narrow trading ranges against the major currencies until the Yellen spoke as at the end of the week.  She confirmed the constructive assessment of the economy...

25 August 2016

Post-Yellen, Trading Incentives to Resume Next Week

The US dollar remains mostly within the ranges seen yesterday against the major currencies. The market awaits fresh trading incentives and the end of the summer lull, which is expected next week.  The Jackson Hole Fed gathering at which Yellen...

24 August 2016

Can the Yellen Build-up be Too Much?

The US dollar is going nowhere fast.  It is narrowly mixed against the major currencies.  The market waits for fresh trading incentives, with much hope placed on Yellen's presentation at Jackson Hole at the end of the week.  Is it...

22 August 2016

The Dollar, What to Watch For, and Jackson Hole

The US dollar lost ground against nearly all the major currencies last week. The sole exceptions were the Australian dollar, where pressure ahead of the weekend following Moody's decision to cut the outlook for five Australian banks wiped out the previous...

19 August 2016

After a Rough Week, the Dollar Finds a Footing

The US dollar is trading firmly ahead of the weekend as part of this week's losses are recouped. The gains are sufficient to put it higher for the week against the Australian dollar.  If its gains against the Aussie were...

18 August 2016

Maybe Wage Inflation is the Answer?

All that is solid is melting.  After Copernicus, we know that earth is not the center of Creation.  Darwin showed us that humans are part of the animal kingdom.  Freud told us we are not even masters of our own...