I find it very uncomfortable to be in such agreement with monetary policy officials like Jay Powell. He and I both look at the inflation data, for example, and have come to the same conclusion that these consumer, producer, and commodity price deviations won’t last; though we arrive at our same view coming from very different use of analysis.Today, the [...]
88.1 Uh Oh! The Eurodollar Has Inverted (Again) ———Ep 88.1 Summary———When the US Treasury yield curve inverts it is a warning that recession is on the horizon. What about when the Eurodollar Futures yield curve rolls over on its back? Not good news either. Would you believe that there's a kink in the curve now? Would you believe it's not [...]
And just like that, snap of the fingers, it’s gone. Without a “bad” Treasury auction, there was no stopping the bond market today from retracing all of yesterday’s (modest) selloff and then some. This despite the huge CPI estimates released before the prior session’s trading, and now PPI figures that are equally if not more obscene. The BLS reports today [...]
Three in a row, huge CPI gains. According to the BLS, headline consumer price inflation surged 5.39% (unadjusted) year-over-year during June 2021. This was another month at the highest since July 2008 (the last transitory inflationary episode). The core CPI rate gained 4.47% last month over June last year, the biggest since November 1991. More impressive (or worrisome, depending upon [...]
The Salvadoran colón is still technically legal tender in El Salvador. The country’s government under President Francisco Flores had passed the Law of Monetary Integration in 2000, taking effect on January 1, 2001. This legalization of the US dollar for domestic circulation didn’t specifically remove the colón from common purchases or prohibit its use; the country’s Central Reserve Bank just [...]
Another day, another alarming piece of data delivered from China. Anyone looking for where the PBOC’s “surprise” RRR cut late last week is coming from, the Chinese car market provides yet another pretty stunning and consistent example. Together with other recent datapoints, as well as uniformly falling global bond yields, it’s more evidence for the growing very possibilities of a [...]
So much going on this week in the bond market, it actually overshadowed the ridiculous noise coming from the Fed’s reverse repo. Some maybe too many want to make a huge deal out of this RRP if only because the numbers associated with it have gotten so big. To end Q2 2021, financial counterparties “lent” just about $1 trillion to [...]
There are three letters you never want to see hit the Chinese news. Actually, it’s the same letter just repeated three times. If the People’s Bank of China (PBOC), the country’s central bank and top bank regulator, ever decides to reduce or cut their RRR you know things are getting serious. And not in a good way.This, of course, won’t [...]
Yield curve control, remember that one? For a little while earlier this year, the modestly reflationary selloff in bonds around the world was prematurely oversold as some historically significant beginning to a massive, conclusive regime change. Inflation had finally been achieved across multiple geographies, it was widely repeated, and this would create problems, purportedly, as these various places would have [...]
Quirks or kinks in the eurodollar futures curve are nothing new, materializing from time to time as much for technical reasons as anything else. Still, there are those instances – such as June 2018 – when these represent meaningful changes in outlook and condition. Back in the middle of that year, the sudden inversion in the curve along the 2020-21 [...]
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