Deeper Analysis

Faster Non-Manufacturing Growth in the U.S. and Euroland

October 4, 2017

The Institute of Supply Management reported a big 4.5-point jump during September in the U.S. non-manufacturing purchasing managers index. At 59.8, such signaled the quickest expansion of activity since August 2005. Sub-components for new business, prices, and production increased by 8.4, 5.9 and 3.8 points, respectively. IHS Markit Economics calculated a 1.1-point increase in Euroland’s […] More

Manufacturing growth in the U.S. Accelerated More Rapidly in September than its Euro Area Counterpart

October 2, 2017

A grinding appreciation of the euro has been correlated with an improving trend in U.S. manufacturing relative to its Euroland counterpart. The euro last month averaged $1.1905, the strongest monthly mean since December 2014. Not coincidentally, the U.S.-minus-Euroland factory PMI differential of +2.7 in September was higher than any month since December 2014. The Institute […] More

September and Third Quarter in Figures

October 1, 2017

The Fed, ECB, and BOJ did not change monetary policy during the third quarter, so short-term interest rates were very stable. But more hawkish talk from the Fed and ECB, a surprise Bank of Canada rate hike, and higher British inflation lifted longer-term rates in those economies during the quarter. A mixed dollar in August […] More

A Compelling Argument for the Fed to Stay the Course of Rate Normalization

September 18, 2017

This week’s Federal Open Market meeting is not expected to raise the 1.00-1.25% federal funds target but is nonetheless anticipated as an event that may shed many clues regarding future policy. The disconnection between a tightening labor market yet continuing sub-target inflation has kindled speculation that there may not be any further interest rate increases […] More

Second Quarter Japanese Growth Not as Robust as Estimated Initially

September 12, 2017

In mid-August, Japanese officials stunned markets with an announcement that real GDP had expanded 4.0%, the most since a 4.6% annualized quarterly increase in the first quarter of 2015. Analysts were at the time expecting a pace of around 2.5%, and it turns out the market consensus was correct after all. Growth was revised downward […] More

August in Figures

August 31, 2017

Ten-year sovereign debt yields feel pretty much in tandem during August except in Japan where the drop was less sizable but consistent with the Bank of Japan’s target. Short-term interest rates remained low and well anchored by ultra-loose monetary policy stances. The dropped significantly against the Chinese yuan and marginally against traditional “hard currencies” like […] More

Second-Quarter Growth in Selected Industrial Economies

August 30, 2017

United States: A 3.3% rise of personal consumption on a seasonally adjusted annualized rate (SAAR) accounted for 76% of the 3.0% SAAR advance of real GDP. Net exports and non-residential business investment increased, too, and made a collective 1.1 percentage point (ppt) contribution to GDP, while government spending slid 0.3% SAAR on quarter and by […] More

PMIs: Euroland Did Better than the United States Last Month

August 3, 2017

The U.S. non-manufacturing purchasing managers index slumped 3.5 points to an 11-month low of 53.9 in July, depressed by declines of 5.4 points in new business, 4.9 points in business activity, and 2.2 points in employment. Euroland’s services PMI, by contrast, stayed unchanged with a reading of 55.4 in July, causing the differential between the […] More

U.S. and Ezone Factory Purchasing Manager Surveys in July 2017

August 1, 2017

The sharp relative improvement in U.S. manufacturing vis-a-vis Euroland seen in June was reversed partly a month later. The U.S. PMI fell 1.5 points to 56.3, while Euroland’s PMI declined by a lesser 0.8 points to 56.6. The euro continued to appreciate against the dollar in July, suggesting that the PMI will probably move back […] More

July in Figures

July 31, 2017

On the final day of July, the Dow hit a record high, and the dollar touched its weakest level against the euro since January 14, 2015 and softest yen value since mid-June. July was a difficult month for the U.S. presidency, even by Trump standards. Also, the future path of Fed policy became less certain, […] More

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