Economic Conditions

5 August 2016

At Least the U.S. Created Jobs…Canada, not So Much

The market's angst over the underlying trend in the US labor market eases with the help of the second consecutive robust report.  The 255k rise in non-farm payrolls was well above expectations, and the details were mostly favorable. There were...

5 August 2016

The U.S. Jobs Backstory

The focus is squarely on the US employment data today, ahead of which the capital markets are mostly consolidating yesterday's Bank of England inspired moved. The Australian and New Zealand dollars, alongside sterling, which is up about half a cent...

3 August 2016

PMIs Make News and the Dollar takes a Break

The US dollar is consolidating yesterday's losses.  The greenback's upticks have thus far been shallow and unimpressive, except perhaps against the New Zealand dollar, which is off 0.8% ahead of next week's RBNZ meeting.  Softer than expected labor cost increase...

2 August 2016

Durable Goods Prices are Falling

This Great Graphic is deceptively simple.  It is chart from the Bureau of Economic Analysis based on the price indices from components of personal consumption expenditure. The rust line is service prices.  They are steadily increasing.  No deflation or disinflation...

1 August 2016

The Reserve Bank of Australia and other Happenings

August has begun off with clear price action.  The US dollar is stronger against nearly all the major currencies.  Bond yields are higher.  Equities and commodities are mostly lower.  However, outside of the purchasing managers July manufacturing prints, these do...

1 August 2016

Could More Underwhelming News be on the Way?

The US dollar is trading with a small upside bias in narrow trading ranges.  The main news has consisted of PMI reports, while investors continue to digest last week's developments.  In particular, the BOJ's underwhelming response to poor economic data...

1 August 2016

The Importance of Being August

Four events this week will command the attention of global investors.  1. The Reserve of Bank of Australia is first.  It is a close call, though the median in the Bloomberg survey favors a cut, including most of the banks...

1 August 2016

GDP News Puts the Brakes on Dollar Advance

The US dollar advance was stopped in its tracks by the disappointingly weak Q2 GDP figures.  The 1.2% annualized growth rate was roughly half of the pace expected.  The FOMC statement earlier in the week did not leave the impression...

28 July 2016

A Wild Ride into the Weekend

Tomorrow could be among the most challenging sessions of the third quarter.  The focus is primarily on Japan and Europe, but the US reports its first estimate of Q2 GDP.  After a six-month soft patch that heightened fears in some...

28 July 2016

Looking Further Out for Fed Action Clues

After reversing lower yesterday after the FOMC statement, the US dollar has continued to move lower against the major currencies, save sterling.  While the market is not fully confident of a rate cut by the Reserve Bank of Australia, indicative...

26 July 2016

How did the Yen Become So Attractive?

The strength of the Japanese yen is the main development in the foreign exchange market today.  It has gained nearly 1.5%, as short-term participants grow skeptical of the kind of stimulus that had driven the yen around 7.5% lower between...

25 July 2016

Is there Additional Upside for the Dollar and S&P?

The US dollar gained against all the major currencies over the past week.  It also rose against many emerging market currencies.  A notable exception was the Chinese yuan.  The yuan rose before the weekend, extended its advancing streak to four...

22 July 2016

The Brexit in a Flash (PMI)

As the week draws to a close, there are three main developments in the capital markets.  First, the profit taking seen in US equities yesterday has continued in Asia and Europe today.  The MSCI Asia Pacific Index and the Dow...

20 July 2016

Post-referendum Fear of Contagion Lessens

It is a bizarre turn of events.  Just as the Game of Throne's Westeros is a map of the UK put on top of an inverted Ireland, so too do UK events seem to be a strange permutation of the...

19 July 2016

Top 5 Tuesday

The US dollar is sporting a firmer profile today, but it is not the driver.  Heightened speculation that Australia and New Zealand may cut interest rates next month is pushing those respective currencies more than 1% lower today.  The Canadian...