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XE Market Analysis: Sterling Caught Between Politics and Economics

By: xemarketanalysis

OVERVIEW Sterling remains sensitive to politics and economics as the Brexit negotiations begin in a cordial manner. The Japanese economy reports solid exports at their highest level for two years. The Reserve Bank of Australia is becoming concerned about the increasing levels of credit. HIGHLIGHT The Pound has weakened in reaction to comments made by Bank of England’s Carney, saying that now is 'not yet' the time to raise interest rates. US DOLLAR The US Dollar has rallied on expectations of higher rates, despite the Federal Reserve members pouring cold water on the outlook for interest rates by saying it is worth waiting until the end of the year to access the next rate hike. BRITISH POUND The Pound remains in focus as the Conservatives report that talks with the DUP are expected to reach a sensible agreement. Read more

The housing slowdown has arrived

By: New_Deal_democrat

On Friday housing permits and starts both declined, and significantly enough that they have become a negative. Let's take a closer look. First of all, here are permits for all structures (blue) and for single family homes (red): I track single family permits because they are just as leading as permits overall, but much less noisy. Read more

XE Market Analysis: Sterling Future is Uncertain as Brexit Negotiations Begin

By: xemarketanalysis

OVERVIEW The Sterling remains stable on the day that the formal Brexit negotiations begin. The Federal Reserve's Dudley has painted a positive picture of the U.S. economy. Euro is steady after Macron achieves a parliamentary majority. South African Rand plummets as political instability strikes again. HIGHLIGHT The Pound has been watched very closely as political instability and uncertain negotiations to leave the European Union have begun. Read more

US Equity and Economic Review: Slightly Weaker Than Projected Numbers Might Be a Bit Concerning

By: HaleStewart

Recent data has been weaker than projections. Last week, auto sales dipped and the latest employment report was somewhat disappointing. This week retail sales, industrial production and housing starts numbers were off. Earlier this week, Bloomberg noted this development: While President Donald Trump is looking for some "very good numbers" on U.S. Read more

International Economic Week in Review: the BOE and BOJ Shift Their Inflation Thinking

By: HaleStewart

Good news continue on the global front: both the Financial Times “Nowcasts” and the World Bank are projecting slightly above trend global growth. This shouldn’t be surprising. EU news became slightly more bullish at the end of last year and has continued in that vein during the 1H17. Read more

Weekly Indicators: housing and the Fed overshadow weekly steadiness edition

By: New_Deal_democrat

May data underwhelmed this week. Producer prices were unchanged, while consumer prices declined. That was the best news. But industrial production was flat, while capacity utilization declined. Retail sales declined, including in real terms. Consumer sentiment as measured by the University of Michigan declined. Read more

XE Market Analysis: U.S. Housing Market Shows Further Signs of Slowing

By: xemarketanalysis

OVERVIEW U.S. housing starts fell 5.5% and building permits fell 4.9% last month. U.S. consumer sentiment dipped in June with the Uni Michigan index dropping from 97.1 to 94.5. Bank of Japan keeps interest rates on hold and rules out from an early exit from its stimulus due to weak inflation. Eurozone inflation data confirmed headline CPI slowed to 1.4% in May and the core rate was just 1%. Greece and its creditors have finally reached an agreement to enable it to receive the next tranche of €8.5bn in loans. HIGHLIGHT Oil prices are approaching their lowest levels of the year as supply continues to increase, despite OPEC's attempts to limit supply and support prices. Read more

US Bond Market Week in Review: The Fed is Missing the Inflation Picture

By: HaleStewart

On Wednesday, the Fed voted to raise interest rates 25 basis points. To support their argument, they observed that “the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have moderated but have been solid, on average, since the beginning of the year, and the unemployment rate has declined.” The following charts use data from the latest BLS employment report: The 3 and 6 month moving averages of establishment job growth (top and bottom chart, respectively) are moving lower – the 3 month, more so. Read more

Loonie At 2-Month Highs After BoC Comments

By: xemarketanalysis

OVERVIEW Markets appear to be in a happier mood today, with Asian, European and US stocks indicies higher. UK inflation continued to accelerate last month, hitting its highest level in almost 4 years. A deal between the Conservative's and the DUP party in Northern Ireland has been largely agreed (BBC) Germany's ZEW survey showed investor morale unexpectedly fell in June. Australian business conditions dipped one point last month to +12. HIGHLIGHT The Canadian Dollar rose sharply yesterday in response to hawkish comments from Bank of Canada Senior Deputy Governor Carolyn Wilkins that raised the prospect of an earlier rate hike. Read more

Waiting on the yield curve

By: New_Deal_democrat

As I wrote last week, nobody should ever rely on a single indicator to forecast the economy. There is always some indicator that at any given time is consistent with a recession. Even those that are most reliable occasionally have a misfire.or at very least a near miss. Read more


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