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Currencies

Three (Rate Cuts) and GDP, Where (How) Does It End?

By |2019-10-31T20:32:01-04:00October 30th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve has indicated that it will now pause – for a second time, supposedly. Remember the first: after raising its benchmark rates apparatus in December while still talking about an inflationary growth acceleration requiring still more hikes, in a matter of weeks that was transformed into a temporary suspension of them. Expecting the easy disappearance of “transitory” factors, [...]

Big Risks Left (and Right) In Europe

By |2019-10-31T20:25:58-04:00October 29th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Another local election in Germany, another stunning defeat for the ruling center. How many more of these does anyone need before they realize the electorate is going to keep in migrating toward the poles? And it all stems from the one reason; there is no and has been no economic growth. But because the so-called establishment has insisted the economy [...]

There’s No S-L-R In R-E-P-O

By |2019-10-31T20:18:32-04:00October 29th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

JP Morgan’s CEO Jamie Dimon has been running around Washington claiming that mid-September’s repo rumble was the result of the post-crisis regulatory environment. He now says that his bank had the spare cash and was willing to cash in on double digit repo rates but it was government rules which prevented that from happening. It’s unclear (but we can, and [...]

More Points For, And Pointing To, The Midpoint

By |2019-10-28T19:09:09-04:00October 28th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It’s not surprising that the Census Bureau would report another weird sideways trend in wholesale sales. After all, the agency has already produced that kind of pattern in the related data for durable goods. For reasons that aren’t going to be explained, economic activity across the supply chain from producers to consumers has been curtailed. That hasn’t mean outright shrinking [...]

The Midpoint

By |2019-10-28T16:42:16-04:00October 28th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The idea of a midpoint can be misleading in that we might immediately think of one in terms of time. The middle being exactly in the middle, halfway from the beginning while also halfway to the end. A midpoint need not be so pedant. In looser usage, it can instead denote merely the separation in between two otherwise irregularly spaced [...]

Somehow Still Decent European Descent

By |2019-10-25T18:40:18-04:00October 25th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

How times have changed. In the middle of 2018, we were told the risks to the global economy were all tilted to the upside. If central bankers weren’t careful, they chanced an uncontrollable inflationary breakout, the kind that would make the last few years of the 2010’s look too much like the 1970’s. Always eager to bottle up the inflation [...]

The Fed and PBOC: Joined At The Zoo

By |2019-10-25T12:48:35-04:00October 25th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Federal Reserve wasn’t the only major central bank conducting open market operations (OMO’s) this week. On the other side of the Pacific, the People’s Bank of China (PBOC) had been, too. Big ones. And in both places, nobody really seems to know what to make of them even though they are actually connected to the same offshore dollar problem. [...]

Downward Home Prices In The Downturn, Too

By |2019-10-24T19:03:26-04:00October 24th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Census Bureau reported today New Home Sales remained at a better than 700k SAAR in September following the big jump over the previous few months. Though the number was slightly lower last month than the month before, it wasn’t meaningfully less. As discussed yesterday, while that might seem the Fed’s rate cut psychology combined with the bond market’s pessimism [...]

More Down In The Downturn

By |2019-10-24T18:19:23-04:00October 24th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Flash PMI’s from IHS Markit for the US economy were split in October. According to the various sentiment indicators, there’s a little bit of a rebound on the manufacturing side as contrary to the ISM’s estimates for the same sector. Markit reports a sharp uptick in current manufacturing business volumes during this month. The manufacturing index came in at 51.5, [...]

The Spread of Collateral, Credit, and Spreads

By |2019-10-23T18:29:33-04:00October 23rd, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When we talk about money dealers (not just primary dealers) and liquidity, we aren’t just zeroing in on the repo market. Money market conditions such as what we can observe in the part of the global repo market that ends up hitting the tape can be helpful in assessing overall liquidity. It isn’t, however, the complete picture. If money dealers [...]

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