Economic Conditions

15 September 2016

The Fed Meeting is Overshadowing European Politics

Yellow lights are flashing.  Bonds remain heavy despite a weak spate of data that would seem to remove nearly any chance that Fed will hike rates next week.  The implications of the disappointing retail sales data indicates that estimates for...

15 September 2016

The Day’s Data/Events Likely not to Push the Needle

Looking at the diary, today is the most important day of the week. The Bank of England and the Swiss National Bank meet.  The UK reports retail sales.  EMU reports CPI figures.  The US reports retail sales, industrial output, and...

14 September 2016

Searching for Stability

The markets are trying to catch their collective breath after yesterday's dramatic moves.  The sharp slide in US equities may have weighed on Asian markets, but losses are mild. Still, the MSCI Asia-Pacific Index was off 0.8%, the fifth consecutive...

12 September 2016

When Governor Brainard Talks, People Listen

Stocks and bonds have begun the new week much like last week ended.  Sharp losses are being recorded.  The US dollar is mixed, with minor losses against the euro, yen, and sterling, but a firmer tone is evident against the...

9 September 2016

Europe (German Data) Sets a Heavy Tone

The US dollar is lower against all the major currencies this week as North American participants close it out.  On the day, the dollar is consolidating swings yesterday and is narrowly mixed.  Bond yields are higher and equities are mostly...

7 September 2016

Investor Response to Rate Change Prospects has been Uneven

Disappointing industrial output figures from Germany and UK are helping stabilize the US dollar after yesterday's shellacking.  Investors have been fickle about the prospects for a rate hike this month, and the unexpected dramatic slide in the service spurred a...

6 September 2016

Another Round of Central Bank Meetings begins Down Under

The US dollar is trading heavily against most of the major and emerging market currencies. However, the losses are modest, and the greenback remains within recent ranges.  The Antipodean and Scandi bloc currencies are performing best.  The US dollar is...

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...