The PBOC really needn’t have conducted the last few of its RRR raises. By the time they were in the books, Chinese inflation was already well underway toward being tamed. Though their CPI wouldn’t register for a few more months still, peaking in July 2011, commodities had already turned decidedly downward. Copper went first, hitting its high on Valentine’s Day. [...]
I doubt there will be an official report created and published surrounding the events of May 29. Unlike those on October 15, 2014, which did trigger a Treasury Department alphabet-soup-of-partners response, it wasn’t crashy enough this time around. The UST market experienced a true panic more than three and a half years ago, though one of buying rather than selling. [...]
Whether we notice them or not, there are a lot of things that do happen on a seasonal basis. Economists have tried to eliminate these patterns from our thoughts and analysis largely by smoothing them out with seasonal adjustments. But in money as markets there remain these bottlenecks. People have asked me from time to time why I use the [...]
Like all sentiment surveys, Germany’s ZEW is susceptible to overzealousness on the part of the survey participants. The Zentrum für Europäische Wirtschaftsforschung is a think tank located in Manheim that has since 1991 carried out this broad questionnaire. Up to 350 analysts are included in the panel, each working at a bank, insurance carrier, or major industrial firm located in [...]
In early 2011, Chinese consumer prices were soaring. Despite an official government mandate for 3% CPI growth, the country’s main price measure started out the year close to 5% and by June was moving toward 7%. It seemed fitting for the time, no matter how uncomfortable it made PBOC officials. China was going to be growing rapidly even if the [...]
We ended last week on a pretty sour note. The eurodollar futures curve has inverted ever so slightly, which isn’t a very good sign of things to come. Since the inversion has to do with different pressures pressing on different parts, convention pays all attention only to the front. It’s there where the Federal Reserve acts out its forecasts. Because [...]
The eurodollar futures curve has already turned on them. That’s why the sudden interest in things like federal funds futures. If it seemed yesterday with the release of the last meeting minutes that the FOMC members appear to be getting nervous, there is good reason. The eurodollar curve is already slightly inverted. Remember, these contracts deal with probabilities and distributions [...]
The opening shots of the so-called trade war have actually been very kind. It’s the sort of stuff Keynesian Economists live for. Activity has been accelerated across a broad front. US imports moved first and now perhaps US exports are in on it, according to the latest Census Bureau estimates. To begin with, the import side. Inbound trade rose 8% [...]
Welcome to the slowdown. It isn't much - yet - and it may just be a passing phase, but there is little doubt that the US economy has slowed somewhat. The rise in short term interest rates has stalled and the long end of the curve has rallied. The result is a flatter yield curve but it isn't the flatness [...]
There are two very big problems with these constant, increasingly shrill labor market anecdotes. The first is that they don’t end up meaning what the tellers think they do. The purpose of these stories is clear enough, it’s just that the logic doesn’t work in the end. Here’s another example from the Wall Street Journal this week. Companies are now, [...]
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