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Watching money supply

By: New_Deal_democrat

A few weeks back I noted that there was something of a divergence between financial and non-financial long leading indicators. All of the financial indicators were still positive -- some extremely positive -- while the non-financial indicators (corporate profits, housing, the personal savings rate) were mixed or negative. The one financial indicator I've had my eye on for most of this year as the first likely to turn has been money supply, and in particular real M2. Let's take a look at how they stand. First, here is nominal M1 (weekly): and here is real M1 (monthly through August): Note first of all that because inflation has generally been very somnolent, there is not much difference between the two. Read more

XE Market Analysis: North America - Oct 10, 2017

By: XE Market Analysis

The dollar posted fresh lows against a number of currencies, before coming off those lows. EUR-USD logged a nine-day high against the dollar at 1.1807. EUR-JPY and other euro crosses also posted higher, before the common currency backed off on news that Catalonia's leader Puigdemont will be holding a press conference at 13:00 CET. Read more

XE Market Analysis: Europe - Oct 10, 2017

By: XE Market Analysis

The dollar has continued to trade softer. EUR-USD climbed to a nine-day high of 1.1789, while the greenback touched fresh lows versus sterling, the Australian and Canadian dollars, and other currencies. USD-JPY continued to do its own way, briefly run higher to 112.82 before ebbing back to near net unchanged levels around 112.60-65. Read more

XE Market Analysis: North America - Oct 09, 2017

By: XE Market Analysis

The narrow trade-weighted USD index logged a new low, at 93.50, with the greenback coming under steady pressure today. The index logged a 10-week high at 94.10 just after the U.S. jobs release on Friday, as the unexpectedly negative employment print was offset by strenght in component parts of the report, which maintained expectations for the Fed to hike in December -- a drop in jobless rate to a new cycle low of 4.2% and a spike in hourly earnings. Read more

XE Market Analysis: Europe - Oct 09, 2017

By: XE Market Analysis

The dollar has opened the week on a soft footing, with the greenback posting lows in a holiday-thinned market below respective Friday lows against the yen, euro, sterling and a good number of other currencies. This follows the unexpected contraction in U.S. Read more

US Economic Week in Review: Hurricane Skewed Results Continue

By: HaleStewart

Recent hurricanes continue to impact data. Auto sales increased strongly, initial claims remain high and the employment report printed a hurricane caused contraction. It will take a few months for the impact to shake out. In other news, both ISM readings were strong and durable goods increased. Read more

US Bond Market Week in Review: Bullard Gets it Right

By: HaleStewart

Bullard is one of the Fed’s most original thinkers. He recently proposed a new interest rate regime that, instead of focusing on models, uses a very intuitive decision tree to determine if raising rates is appropriate. He gave a speech at the end of last week that asked three questions: would the US see GDP growth greater than 2% in the coming year, would inflation hit the Fed’s 2% inflation target, and would wages increase as unemployment decreases. Read more

International Economic Week in Review: Global Growth Continues

By: HaleStewart

This week, the only central bank to make a policy decision was the RBA, which maintained rates at 1.5%. In other news, the EU continues expanding at a solid pace, but the sentiment readings from the UK are weakening thanks to Brexit concerns. Read more

Weekly Indicators: credit spread makes 10 year low edition

By: New_Deal_democrat

September data was hedlined by a mixed employment report, with a loss of jobs in the establishment survey, but a huge gain in jobs, decline in the unemployment and underemployment rates, and a big increase in the employment to population ratio and labor force participation rates from the household survey. Other data included strongly positive motor vehicle sales and ISM manufacturing, and positive ISM services and August factory orders. My usual note: I look at the high frequency weekly indicators because while they can be very noisy, they provide a good Now-cast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. Read more

XE Market Analysis: Asia - Oct 06, 2017

By: XE Market Analysis

The dollar popped higher following the negative NFP print of the September jobs report, though hurricane disruptions were widely anticipated to impact. Upbeat details, such as a surge in hourly earnings, a bump up in the participation rate, and a drop in the unemployment rate to a trend low 4.2% came to the greenback's aid. Read more


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