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The two most important pieces of data last week were the GDP releases for Japan and the EU, both of which raise concerns. While Japan grew at a 3.8% annualized pace in the second quarter, GDP decelerated to an annualized 1.9% in the third quarter. Household consumption – which had been performing well, dropped as did exports. Read more
Monthly reports in the last week for October were all negative. Industrial production and capacity utilization decreased. Wholesale inventories increased. The Empire Manufacturing index turned negative. Third quarter unit labor costs also decreased - good for corporate profits but bad for labor/consumers, although the second quarter was revised higher. Read more
The dollar traded lower into the weekend on Friday, impacted by softer U.S. data. The Empire State index unexpectedly turned negative, while industrial production missed the mark as well, and import prices slipped less than expected. Stocks continued their march higher in the aftermath of Yellen's confirmation hearing on Thursday. Read more
Earlier this week I wrote that gas prices were at a near 3 year low, appearing to validate the suggestion I meade two years ago, that the Oil choke collar would begin to disengage this year. Obviously, paying lower prices for energy puts more money in consumers' pockets for other spending, and/or for increased saving. Read more
A risk-on theme prevailed, which saw the yen underperform and the Australian dollar and other growth correlating, high-beta currency types outperform. EUR-USD was net steady during the European AM session, holding moderately firmer levels from yesterday's New York closing levels. Read more
A risk-on theme prevailed, which saw the yen underperform and the Australian dollar and other growth correlating, high-beta currency types outperform. Fresh dovish-talk from the Fed chairman-elect Yellen was the prime factor, who said yesterday during testimony that, "I consider it imperative that we do what we can to promote a very strong recovery." This propelled the MSCI Asia Pacific index to a near 1.5% advance. Read more
Senate confirmation hearings for Fed chair nominee Yellen were the focal point of Thursday's N.Y. session, where she largely hardened her dovish leanings. Wall Street responded with a modest rally, while Treasury yields and the dollar pulled back some. Read more
The charts below show the unemployment rate for the EU, US and UK, respectively. The EU and US’ combined GDP is nearly $28 trillion dollars, accounting for a large portion of the world’s economic output. The UK, while somewhat smaller, is still one of the world’s 10 largest economies. Read more
The dollar traded on the softer side as markets positioned off dovish Yellen comments in prepared remarks ahead of her confirmation hearing later today. She said that the economy and jobs are performing far short of potential, which buoyed sentiment amid expectations that under her leadership the Fed will stay easy for longer. Read more
The dollar traded on the softer side as markets positioned off dovish Yellen comments in prepared remarks ahead of her confirmation hearing later today. She said that the economy and jobs are performing far short of potential, which buoyed sentiment amid expectations that under her leadership the Fed will stay easy for longer. Read more
