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International Economic Week in Review: Causes of Global Deflation, Edition

By: HaleStewart

Last week was a very light week on economic numbers, so I wanted to take this time to look at a very interesting global phenomenon: deflation. Across a wide swath of countries, we’re seeing remarkably weak price pressures. First, consider the overall price level of all major commodity groups as expressed in the ETFs that track major commodity groups: Over the last year, agricultural commodities are down 22%, industrial metals are down 5.32%, energy has dropped a whopping 43% and precious metals (which are a good indicator of inflationary expectations) are down 19.4%. Read more

US retail sales: a slowdown, yes, but wait for the inflation adjustment

By: New_Deal_democrat

Yesterday's retail sales report looked mighty poor, down -0.8% m/m. It was the third straight decline in this metric. Three important points need to be made: First, a slowdown in consumer purchases is not surprising, given the slowdown in housing in late 2013 and early 2014. Read more

XE Market Analysis: North America - Mar 13, 2015

By: XE Market Analysis

EUR-USD traded lower, logging an intraday low just ahead of the European open at 1.0564 before chopping around both sides of the 1.06 level. Yesterday's rebound peak at 1.0663 was short of the previous day's high at 1.0717, suggesting that the trend still remains bearish (according to Down theory guidelines on trends), though downside momentum has paused. Read more

XE Market Analysis: Europe - Mar 13, 2015

By: XE Market Analysis

EUR-USD dipped back under 1.0600 in Asia. Yesterday's rebound peak at 1.0663 was short of the previous day's high at 1.0717, suggesting that the trend remains bearish (according to Down theory guidelines on trends), especially as a new low at 1.0494 was also seen. Read more

XE Market Analysis: Asia - Mar 12, 2015

By: XE Market Analysis

The FX market was relatively quiet in N.Y. on Thursday, keeping the greenback fairly steady through the session. EUR-USD peaked at 1.0684 after weaker U.S. retail sales data, though quickly turned lower, to eventually touch 1.0590 lows. USD-JPY fell to 120.66, briefly, before climbing back to 121.35. Read more

A Two Year Comparison of the Yen, Australian Dollar, Loonie, US Dollar, Pound and Euro

By: HaleStewart

Above is a two-year chart of six major world currencies (the Yen, Australian dollar, Loonie, US Dollar, UK Pound and the Euro) derived from BIS data. Looking at the short-term trends, we see the following: The yen is the clear value loser, which was a key component of Abenomics. Read more

XE Market Analysis: North America - Mar 12, 2015

By: XE Market Analysis

Things got a bit more two sided today. EUR-USD staged a half decent rebound to the mid-1.06s after making a new trend low at 1.0495 in Asia. The pair subsequently dove back to 1.0580 before setting near the 1.06 mark. The sharp rebound was driven by profit taking, with the market taking a cue from a 7 bp retreat in the U.S. Read more

XE Market Analysis: Europe - Mar 12, 2015

By: XE Market Analysis

EUR-USD dove to a new trend low for a seventh straight day in making 1.0495 in Asia, since lifting to the 1.0540 area. A Citigroup research note pithily observed that if EUR-USD continues to fall at the average rate of decline seen over the last couple of weeks (which is 56 pips per day), the pair will reach zero by Jul-22. Read more

XE Market Analysis: Asia - Mar 11, 2015

By: XE Market Analysis

Another day, another record high for the USD index, which ramped up 1.25% to just under the 100.00 mark. EUR-USD losses of course were the major driver, as that pairing traded into 1.0512 lows, from N.Y. session highs of 1.0628. USD-JPY was steady between 121.20 and 121.60, though EUR-JPY took a fresh tumble under 128.00. Read more

US Labor Market Statistics Indicate This Is NOT The Time To Raise Rates

By: HaleStewart

The Federal Reserve has a dual mandate: price stability and full employment. With the inflation rate far below the Fed’s 2% target, price stability has been achieved – at least for now. But with the unemployment rate at 5.5%, some commentators believe that we are at or very close to full employment, giving the Fed room to begin raising rates. Read more

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