Currencies

Seriously, Good Luck Dethroning the (euro)Dollar

By |2019-11-21T17:56:50-05:00November 21st, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Scarcely a week will go by without some grand prediction of the dollar being dethroned. Set aside how if anything is to be deposed it would have to be the eurodollar, these stories typically follow the same formulaic approach: Country X is moving away from dollar reserves, “diversifying” its holdings because of the geopolitics of Y. Usually, it is the [...]

Rate Cuts, Repo, and (No) Money Printing

By |2019-11-20T16:02:35-05:00November 20th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I don’t think that was quite the message the FOMC wanted to send. It’s pretty clear what the Committee wanted to say, or wanted everyone to hear. The members are done with rate cuts because everything looks great. Sure, it all looked great to them last year but, as has become the conventional interpretation of late, hey, at least it [...]

More (Badly Needed) Curve Comparisons

By |2019-11-20T12:43:24-05:00November 20th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Even though it was a stunning turn of events, the move was widely celebrated. The Federal Reserve’s Open Market Committee, the FOMC, hadn’t been scheduled to meet until the end of that month. And yet, Alan Greenspan didn’t want to wait. The “maestro”, still at the height of his reputation, was being pressured to live up to it. The Fed [...]

I Can’t Get No Re-cession

By |2019-11-19T17:15:15-05:00November 19th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Germans managed to do it, to avoid meeting the dreaded technical definition of recession. While not a meaningful one, conventional wisdom assigns the classification to any economy which features two straight quarters of declining output typically measured by real GDP. Germany’s was slightly negative in Q2 with most expectations for a repeat in Q3. Instead, deStatis reported last week [...]

TIC for September: Not Repo But ‘Further Flaws’

By |2019-11-19T12:15:42-05:00November 19th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Treasury Department’s TIC for September 2019 finally arrived yesterday. Two months in arrears, it’s often torturous having to wait for the detailed cross border bank figures to show up for particularly noteworthy months. You might remember September for something going on in repo, and TIC is right where we’ve been tracking (trying to) global repo and collateral flows since [...]

The Financial Midpoint Comes Into Focus

By |2019-11-18T16:51:54-05:00November 18th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Another dovish example to be put on the growing pile of good things? The People’s Bank of China (PBOC) earlier today trimmed one of its many policy rates. The 7-day reverse repo rate will be reduced from 2.55% to 2.50%, a 5 bps cut practically pointless in functional terms widely interpreted instead for its purported “meaning.” Like the Fed, the [...]

Another Perfect Example of the Euro$ Squeeze

By |2019-11-18T12:50:44-05:00November 18th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Earlier this month, the Statistics Bureau of Japan had reported an enormous surge in household outlays. For the month of September 2019, the Japanese had splurged on everything from big ticket items to regular discretionary products. Total spending in the month was up 9.5% year-over-year in real terms, an enormous increase which had been the fastest pace ever recorded in [...]

Powell’s Strong Economy Canceled By Powell’s Data

By |2019-11-15T18:10:33-05:00November 15th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

US Industrial Productions continues to more and more resemble the worst of the Euro$ #3, that “manufacturing recession” of four years ago. Back at the end of 2014 and lasting well into 2016, IP was led lower by the oil crash among other problems. They called it a supply glut but we all know that wasn’t ever the case. What [...]

Retail Sales Make It Two Toward The Second Act

By |2019-11-15T16:40:41-05:00November 15th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

One monthly result does not make a trend. Two? Still not a trend, but edging closer to one and more solid analysis. If making a claim based off the potential for one high frequency result is going out on a limb, then a second result confirming the first while not yet solid ground is at least a bit thicker of [...]

The Frights of Repo-ween: Technical Things and Scaredy-cats

By |2019-10-31T20:50:18-04:00October 31st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s not the level of bank reserves. It never was. QT was always a distraction. As I’ve said from the very beginning, the same thing the Fed’s researchers (rather than top policymakers) will say you if you ask them, the level of bank reserves only tells us what the Fed is doing. It does not, and will not, describe anything [...]