It’s interesting what the eurodollar futures curve has done today. Over the past several weeks, of course, the curve has collapsed though with much more focused buying at the front end of it. That’s understandable given the common scenario being priced in – that the Fed will reluctantly be forced into sizeable rate cuts very soon. In fact, the current [...]
There were only two possibilities and both related to their release. Either the Communist Chinese government was going to delay them, or would just say, screw it, everyone knows they’re going to be bad so let ‘em fly. There weren’t any questions about the data itself. Sure enough, the first glimpse at China’s economy in its full virus effects was [...]
With interest rates tumbling all over the world, gold should be killing it. Instead, gold is getting killed. The major correlation for this precious metal has been the bond market, falling yields. And that makes intuitive sense; gold as a hedge pays no interest, but if competing safety instruments like UST’s end up paying up a lot less then gold [...]
It’s really not hard to appreciate why markets are freaking out right now. The economic narrative is, and has been, all wrong. Jay Powell says that faraway overseas pressures had taken just a little off what had been awesome economic growth. Despite what had become an obvious drag on trade and manufacturing, the unemployment rate, to Powell, spoke softly to [...]
The WTI futures curve is supposed to be in backwardation, though the word “supposed” is a loaded term. Backwardation is more of an ideal condition than one you might find most often in practice. There’s almost as much contango as backwardation in the futures market’s history. It’s not so easy to balance all the complexities that are spun through oil [...]
That’s the thing about these eurodollar cycles; they aren’t short. We’re conditioned on the belief that the business cycle is, or at least the recession piece. According to convention, the economy peaks and within a relatively short period of time it falls apart. The shock and its very immediate aftermath. The lengths of time involved here in the post-crisis era [...]
Germany’s Finance Minister Olaf Scholz ignited and invited controversy today when he signaled that the federal government is looking at a possible suspension to constitutional budget measures. With a nasty political fight certain to follow, even temporarily adjourning the country’s so-called debt brake would not be easy. With Chancellor Angela Merkel’s party already in a precarious position, one might wonder, [...]
Earlier today, Mexico’s Instituto Nacional de Estadística y Geografía (INEGI) confirmed the country’s economy is in recession. Updating its estimate for Q4 GDP, year-over-year output declined by 0.5% rather than -0.3% as first thought. On a quarterly basis, GDP was down for the second consecutive quarter which mainstream convention treats as a technical recession. On a yearly basis, it was [...]
When Mario Draghi sat down for his scheduled press conference on April 4, 2012, it was a key moment and he knew it. The ECB had finished up the second of its “massive” LTRO auctions only weeks before. Draghi was still relatively new to the job, having taken over for Jean-Claude Trichet the prior November amidst substantial turmoil. The non-standard [...]
It’s another example of the difficulties in trying to evaluate and analyze non-economic factors. China’s virus outbreak is a nightmare for those unfortunately living through it, and Chinese officials aren’t doing themselves any favors. Trust is a sketchy enough concept. The WHO today says there is no pandemic, which, as Erik Townsend of MacroVoices points out, immediately puts this announcement [...]
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