Deeper Analysis

Treasury Dept. Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States

January 14, 2020

China had been designated as a “currency manipulator” last August, but that label is being rescinded on the eve of the Phase One U.S.-Sino trade pact. In theory, retaliatory actions can be more speedily imposed by the President on so-called currency manipulators, but the switch in designation in reality will make little practical difference. In […] More

Closest Convergence of U.S. and Euroland Manufacturing Sectors Since January 2018

January 3, 2020

In the ISM report, a 5.9-point drop in production resulted in the weakest U.S. PMI reading (47.2) since June 2009. The components for orders of 46.8 and jobs of 45.1 were 0.4 and 1.5 points below their November results. The IHS survey of U.S. manufacturing also resulted in a lower PMI reading last month than […] More

December and 2019 in Figures

January 2, 2020

Equities performed spectacularly in 2019 as a whole and rose in December, too. Ten-year sovereign debt yields rose in December but fell in 2019. Three 25-basis point cuts were made in the federal funds target last year, reversing all by one of the four hikes done in 2018. Elsewhere, there was only a 10-basis point […] More

Comment on FOMC Statement, Forecasts, and Powell Press Conference

December 11, 2019

The Federal Open Market Committee left the federal funds target unchanged at 1.25-1.50% and reached that decision unanimously. A policy change was not expected, and there was nothing meaningfully new presented in the formal statement released today. Likewise, the updated forecasts included nothing remarkable. Projected GDP growth of 2.0% next year, 1.9% in 2021 and […] More

A Lessening U.S. Advantage Versus Euroland in Manufacturing

December 2, 2019

The ISM-compiled U.S. manufacturing purchasing managers index in October slid 0.2 index points to a 3-month low of 48.1, whereas the Euroland’s IHS-compiled PMI advanced a full point to a 3-month high of 46.9. The differential between those two data series of 1.2 points in favor of the United States was sliced in half to […] More

November 2019 in Figures

December 2, 2019

Share prices and 10-year sovereign debt yields climbed last month in most of the economies featured below. The dollar strengthened between 0.9% and 1.9% relative to the euro, yen, Swiss franc, loonie and Australian dollar but ended November with minimal net change against the kiwi, yuan or sterling. Central bank policy rates were not changed […] More

Only a Slight U.S. Factory Sector Advantage Versus Euroland

November 4, 2019

The ISM-compiled U.S. manufacturing purchasing managers index in October rose 0.5 index points to a 2-month high of 48.3, and Euroland’s IHS-compiled PMI edged 0.2 points higher to 45.9, which also represents a 2-month high. The differential between those two data series of 2.4 points in favor of the United States was similar to the […] More

Manufacturing Around the World as Depicted by October Purchasing Manager Surveys

November 2, 2019

The soft data provided by various and sundry purchasing manager surveys reported each month provide an early sign of economic conditions whose signals may or may not be confirmed by subsequent hard data. Although manufacturing covers a comparatively small piece of total activity, the other parts are dependent upon the health of manufacturing such that […] More

October in Figures

October 31, 2019

The intensification of risk related to U.S.-Sino trade talks and Brexit that happened in September receded partly in October. Monthend came and went without the U.K. leaving the EU either with or without a deal, and sufficient progress in the trade talks forestalled the threat of sharp tariff increases at least for a while. Impeachment […] More

Fed’s Pause to Last Longer Than Average

October 30, 2019

Coming into today’s FOMC announcement and press conference, Fed watchers correctly coalesced around a view that the Fed would chop 25 basis points off its federal funds rate target for the third time since July 31 but at the same time signal a pause in this easing cycle. The released statement didn’t discredit that presumption. […] More