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XE Market Analysis: Asia - Oct 16, 2014

By: XE Market Analysis

The dollar was mostly lower in N.Y. trade on Thursday, despite the bounce back on Wall Street, and some decent U.S. economic data. Weekly jobless claims were the lowest in years, while industrial production and the Philly Fed index both beat expectations. Read more

U.S. Consumer Spending At A Moderate But Sustainable Pace

By: HaleStewart

The latest market correction has attracted a great deal of attention. And, it has once again placed a great deal of focus on the underlying economic condition of the US economy. As I noted yesterday, both the leading and coincident economic indicators (which comprise a total of 14 different economic statistics) are pointing to continued moderate US growth. Read more

XE Market Analysis: North America - Oct 16, 2014

By: XE Market Analysis

The dollar rebounded as the market turned to the dollar in an risk averse environment as European stocks turned sharply lower. News that Spain's auction of 10-year paper fell short of target was both a symptom and a risk-off catalyst, while the Ebola outbreak is inviting comparisons in the media to the economically disruptive 2003 SARS outbreak in Asia. Read more

XE Market Analysis: Europe - Oct 16, 2014

By: XE Market Analysis

The dollar has consolidated Wednesday's losses seen after soggy U.S. PPI and retail sales data. Asian stocks continued to tumble, and another risk-off day looks likely in Europe amid fears about Ebola, which is inviting comparisons to the economically disruptive SARS outbreak in Asia in 2003. Read more

XE Market Analysis: Asia - Oct 15, 2014

By: XE Market Analysis

It was a wild ride in the markets in N.Y. on Wednesday, as the dollar, Treasury yields, and Wall Street all went into the tank. The selling started in earnest after a trifecta of weak U.S. data, which include soft retail sales, cool PPI, and a sharp pullback in the N.Y. Read more

US Economy Is In Decent Shape

By: HaleStewart

While the recent equity market sell-off has gotten a lot of headlines, the underlying US economic condition -- which provides the fundamental backdrop for US equity performance -- has been ignored. To rectify that situation, let's take a look at the leading and coincident economic indicators, starting with the leading: The table above is from the latest Conference Board US press release with the negative contributions to the LEIs circled in red. Read more

XE Market Analysis: North America - Oct 15, 2014

By: XE Market Analysis

The dollar oscillated higher in Asia before oscillating lower during the European AM session, unable to capitalize on recent weak data out of Europe. EUR-USD has been holding the mid-1.26s after recovering from 1.2624, which was a two-day low. Final German HICP inflation was confirmed at 0.8% y/y to little market impact. Read more

XE Market Analysis: Europe - Oct 15, 2014

By: XE Market Analysis

The dollar extended gains in early Asia before consolidating slightly lower. Yesterday's weak set of data out of Germany and the U.K. had underscored the relative attractiveness of the greenback, even if a Fed tightening remains some way off. EUR-USD logged a new low for the week at 1..2620 before recovering to the 1.2650 area. Read more

XE Market Analysis: Asia - Oct 14, 2014

By: XE Market Analysis

The dollar was mostly firmer in N.Y. trade on Tuesday, though was generally inside of narrow trading ranges versus major currencies. EUR-USD found support under 1.2650, while USD-JPY struggled on moves over 107.00. Cable moved down under 1.5905, while another bashing in the oil market took USD-CAD to trend highs over 1.1270. Read more

The message of the bond market

By: New_Deal_democrat

Stock prices are making a nice downward spike. Bond yields are also declining smartly. While a lot of energy has been spent trying to decipher the message of stocks, what is the message of bonds? The answer, I believe, is both good news and bad news. Here's the bullet-point version: since bond yields are a long leading indicator, and stocks a short leading indicator, bonds are looking further out into the future an air pocket in stock prices is not unexpected, since for the last year, stocks have gotten ahead of corporate profits, whereas over the longer term, the two tend to converge declining bond yields in a very low inflation environment such as now foretell weakness in the near future (i.e., over the next 12 months or so) declining bond yields - if significant enough - foretell a rebound in activity further in the future, i.e., more than 12-18 months away whether the shorter term weakness translates into an actual downturn is usually forecast by a significant increase in the spreads between corporate bonds and treasuries spreads have not widened significantly to date, so no downturn in the near term is forecast, but on the other hand bond yields have not declined significantly enough to suggest a strong rebound thereafter Now let's take a more detailed look. As I've pointed out in prior commentary, the bond market's relationship to stock prices changed since 1998. Read more

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