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US Economy Still in Solid Shape

By: HaleStewart

ISM released their latest manufacturing and non-manufacturing reports this week. The manufacturing number was down 1.5 but is still a very heathy 59.3. New orders were also off, but they are also very strong (61.9). However, the real story in this report were the anecdotal comments, which contained negative information about the tariffs: “Supply constraints, extended lead times, capacity constraints [and the like], particularly in the electronics components markets, continue to frustrate and drain needed resources, have delayed production schedules and, in some cases, caused missed or delayed sales opportunities.” (Computer & Electronic Products) “International demand is strong for our products in all regions. Read more

Powell and Bullard Both See Additional Rate Hikes

By: HaleStewart

This week, there were two key speeches by Federal Reserve governors. The most important was from new Fed President Jerome Powell. I have previously described him as a technocrat; his latest speech further solidifies that description. Like most Fed governors, he believes the labor market is the single-best indicator of the economy’s health. Read more

Weekly Indicators: interest rates rise again edition

By: New_Deal_democrat

March data started out with a weakly positive jobs gain and a flat unemployment rate. Wages improved overall, but did not gain YoY for non-managerial workers. Motor vehicle sales improved. Both ISM manufacturing and services indexes decelerated but remained strongly positive. February construction spending was barely above flat. Read more

XE Market Analysis: It Isn’t Over till It’s Over as Trade Fears Persist

By: xemarketanalysis

OVERVIEW Commodity currencies are trading lower as the US Administration considers new $100 billion tariffs on Chinese imports. US non-farm payroll data is expected to show another solid growth. USD/DXY Index currently holding to close the week on a high for the second successive week. HIGHLIGHT The New Zealand Dollar is the biggest loser as commodity currencies come under pressure once again. Read more

XE Market Analysis: Dollar Rallies as Trade Rhetoric Calms

By: xemarketanalysis

OVERVIEW Risk appetite recovers amid a calmer view of trade war risks. Stock markets rally strongly, European markets up over 2%. GBP under pressure from weak services data. EUR also under pressure from softer data. US trade deficit hits 9.5 year high. HIGHLIGHT The Dollar is rallying across the board today versus the Japanese Yen where it reached a 3-week high, bolstered by a rebound in global stock markets and signs of the US looking to resolve a trade dispute with China. Read more

XE Market Analysis: China Strikes Back with Trade Tariffs

By: xemarketanalysis

OVERVIEW A cautious tone came down upon the financial markets today as China responded to the US with trade tariffs on US goods. The construction sector in the UK literally froze in March as the beast from the East put this sector into contractionary territory in March. Inflation in Europe ticked higher, while the unemployment rate dropped. US service sector activity slows albeit from buoyant levels. HIGHLIGHT China struck back in the looming trade war with the US by imposing a 25% tariff on 106 US goods, with soybeans being the focus. US DOLLAR The Dollar continues to trade in a quiet range against the Euro as the service sector PMI reading came in weaker than expected at 58.8 from 59.5 previously. BRITISH POUND The Pound continues to prove resilient as the market shrugged off the weaker than expected construction data in the expectation that activity will bounce back again in April. EURO Unemployment in the EU dropped to 8.5% while the inflation rate rose from 1.1% to 1.4%. CANADIAN DOLLAR The Canadian Dollar is weaker against its US counterpart, pulling back from an earlier five-week high amid rising trade tensions. Read more

XE Market Analysis: EU Manufacturing Sector Stumbles

By: xemarketanalysis

OVERVIEW EU manufacturing sector drops more than expected in March. UK manufacturing inches higher according to the Purchasing Manager's Index. The Reserve Bank of Australia leaves rates on hold at 1.5%. US manufacturing slowed to 59.3. HIGHLIGHT The factory boom in the EU continues to wane into March. Read more

XE Market Analysis: US and China Trading Tariffs Keep Investors Nervous

By: xemarketanalysis

OVERVIEW The Sterling is a top performer among G10 currencies. EUR is weak in the holiday-thinned market. Japan Tankan tick lower on strong JPY. USD DXY Index down 0.11% over fears that global trade war will slow economic growth. HIGHLIGHT The Sterling is carrying the crown of the top performer among the G10 currencies. Read more

The Fed between Scylla and Charybdis: an update

By: New_Deal_democrat

About three years ago, I wrote that in raising rates the Fed was caught between the Scylla of higher long rates killing the housing market and the Charybdis of falling long rates causing a yield curve inversion, and that "The Fed has to hope that long rates remain in a narrow band of stability." https://bonddad.blogspot.com/2015/05/analyzing-crosscurrents-maturing.html So far, long rates have remained within the safe zone. Read more

The EU and UK Take a Few Modest Economic Hits

By: HaleStewart

At the end of 2016, economic news from the EU started turning more bullish. Sentiment indicators from Markit economics were the first to pick this up which was followed by loan growth, retail sales, and finally industrial production. Mario Draghi - the head of the ECB – has noted this trend on several occasions, most recently in his opening statements of the latest ECB policy announcement: Let me now explain our assessment in greater detail, starting with the economic analysis. Read more


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