Deeper Analysis
Three Risks When Political Leaders Influence Monetary Policy
October 17, 2018
President Trump’s progressively blunt criticism of the Federal Reserve for a string of gradual interest rate hikes should surprise nobody. The president’s style of overturning institutions has taken him very far in politics. Criticizing Fed policy, even though the Chairman and two of the other current governors are his appointees, fits a pattern that has […] More
Spread Widens Between U.S. Non-Manufacturing PMI and Euroland’s Services PMI
October 3, 2018
The ISM-compiled U.S. non-manufacturing purchasing managers index rose 3.1 points in September to 61.6, which is a record high for this 10-year-old data series. Sub-indices for business activity/production and for jobs climbed by 4.5 points and 5.7 points, while those for prices and new business were 1.4 and 1.2 points above their August readings. The […] More
Trade War Concerns Affected U.S. and Euroland Manufacturing Purchasing Manager Indices Equally in September
October 1, 2018
In September, the ISM-Compiled factory PMI index fell 1.5 points to 61.3, while the IHS-compiled euro area PMI dropped 1.4 points to 54.6. The manufacturing sectors continued to improve, but the lower scores in each economy reflects a reduced rate of improvement in operating conditions. And America’s relative advantage was preserved, but the data do […] More
September and Third Quarter in Figures
September 29, 2018
Central bank policy rates were raised during the third quarter in the United States, U.K., and Canada but left unchanged in Japan, Switzerland and Euroland. Nevertheless, long-term interest rates climbed noticeably in all six of those economies. Thus, 10-year differentials between the U.S. and the other countries didn’t shift all that much. Moreover, the squeeze […] More
U.S. and Euroland Manufacturing Conditions Diverge
September 4, 2018
August saw the widest divergence that I can recall between U.S. factory conditions as measured by the ISM purchasing managers index and factory conditions in the euro area as measured by the IHS PMI. But there is a caveat. IHS also compiles a U.S. manufacturing PMI, and according to that measure, there was a deceleration […] More
August in Figures
August 31, 2018
Many stock markets performed well in August as such had in July. Exceptions were those in the U.K., Switzerland, and Canada. The yen and Swiss franc rose against the dollar, which otherwise advanced against the other currencies examined in this monthly feature. The dollar also strengthened 33% against the Turkish lira during August. The Bank […] More
Narrower U.S. Non-Manufacturing Advantage Last Month Versus Euro Area
August 3, 2018
The July spread between the ISM non-manufacturing U.S. purchasing managers index and IHS’s service-sector PMI for the euro area was 2.4 points smaller than June’s differential. In combination with a 2.3-point contraction of their manufacturing PMI spread reported earlier this week, the sum of the two first differences was slightly more than halved to 4.5 points, […] More
U.S.-Minus-Euroland Manufacturing PMI Spread Narrowed Sharply Last Month
August 1, 2018
Mfg PMIs U.S. Euroland Spread EUR/USD Jan 2013 53.1 47.9 +5.2 1.330 February 53.1 47.9 +5.2 1.334 March 51.5 46.8 +4.7 1.295 April 50.0 46.7 +3.3 1.301 May 50.0 48.3 +1.7 1.299 June 52.5 48.8 +3.7 1.319 July 54.9 50.3 +4.6 1.309 August 56.3 51.4 +4.9 1.331 September 56.0 51.1 +4.9 1.335 October 56.6 51.3 […] More
July in Figures
July 31, 2018
Net dollar movement against currencies in other well-developed economies was modest in July, but the U.S. currency extended gains against developing country monies. The rise in long-term U.S. interest rates pulled up other sovereign debt yields, blunting the impact on rate differentials. The Bank of Canada was the only central bank examined for this update […] More
U.S.-Minus-Ezone Non-manufacturing PMI Differential Narrowed Last Month
July 5, 2018
The ISM U.S. nonmanufacturing PMI minus IHS Euroland services PMI narrowed 0.9 points to 3.9 in June after having widened 2.7 points in May. Both economies experienced faster growth last month in these sectors. The U.S. index climbed 0.5 points to 59.1, but Euroland’s measure went up by a larger 1.4 points to 55.2. Manufacturing […] More
