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How much must interest rates spike for the economy to roll over?

By: New_Deal_democrat

Interest rates are the most potent background long leading indicators. Last week I wrote that I did not see them as having risen enough at this time to cause a recession, and noted that I thought they had to rise to at least about 3.25%, and for a sufficient period of time. Here's why. The below is a graph of 10 year treasury yields over the last five years, minus 2.6%, so that a 2.6% yield shows as zero: Note that the 2013 "taper tantrum" caused yields to rise over 2.6% for about 1 year, from midyear 2013 to midyear 2014, and to a maximum of just over 3%. Read more

XE Market Analysis: North America - Feb 20, 2018

By: XE Market Analysis

The dollar has been in rebound mode after making fresh major-trend lows on Friday, gaining yesterday in the absence of North American and a number of major Asian markets, and extending further upward today. The gain was concomitant with market narratives talking about the rise in 2-year Treasury yields to near 10-year highs (which has been seen ahead of the auction of 2-year notes later today). Read more

XE Market Analysis: Europe - Feb 20, 2018

By: XE Market Analysis

The dollar continued to hold firm, extending the same theme for a second day. This came with 2-year U.S. Treasury yields rising to a near 10-year high in Asia today, and with stock market sentiment having soured somewhat following a week-long rebound. Read more

XE Market Analysis: Europe - Feb 19, 2018

By: XE Market Analysis

The dollar traded generally firmer today in low volumes with a number of Asian nations enjoying public holidays today, including China, Hong Kong and Taiwan. North American markets will also be absent today. EUR-USD logging a two-session low of 1.2392, and USD-JPY recouped above 106.60, extending a rebound from Friday's 15-month low at 105.52. Read more

US Economic Week in Review: Some Disappointing Coincidental Numbers

By: HaleStewart

This was a mixed week for U.S. economic data. One leading indicator – the 4-week moving average of unemployment claims – was positive. But while the headline number for building permits was very strong (+7.4%), a huge jump in multi-unit structures (5+ unit permits rose 25%) were responsible for the increase. Read more

US Bond Market Week in Review: An Overblown Inflation Fear

By: HaleStewart

At this point, I almost feel unqualified to talk about inflation and inflationary pressures in the economy. I have, after all, spent the better part of the last 4-5 years discussing the possibility of deflation or, more specifically, weak pricing pressures. Read more

International Economic Week in Review: The Global Growth Wave Continues

By: HaleStewart

The overall trend of major international news continues to trend in a positive direction. Japan is on solid growth footing while EU news is well into its second year of an overall bullish tone. Australia’s employment situation continues to improve. Read more

Weekly Indicators: payroll tax withholding falls off a cliff edition

By: New_Deal_democrat

January data this week included very positive housing permits and starts, as well as very positive consumer confidence as measured by the U. of Michigan. Industrial production and capacity utilization were negative, as were retail sales. Consumer prices increased a significant +0.5%, and producer prices increased significantly as well. Read more

XE Market Analysis: Asia - Feb 16, 2018

By: XE Market Analysis

The dollar bounced modestly to end the week in N.Y. on Friday, with the move largely attributed to short covering into what will be a long U.S. weekend. The DXY advanced from three-plus year lows of 88.26 seen overnight, topping at 89.04 following strong housing starts data, and firmer import prices. Read more


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