Deeper Analysis

March and First Quarter in Figures

April 1, 2017

March saw an introspective pause to the market euphoria of the first two months of 2017, but the quarter still experienced a broadly lower dollar and strong stock market gains for the most part, the Japanese Nikkei being a notable exception. Ten-year sovereign debt yields were mixed and resulted in less supportive U.S. premiums at […] More

Comment on U.S. Current Account Data

March 21, 2017

U.S. President Trump has cast great attention on the U.S. trade and current account deficits, calling such a drag on the growth of U.S. real GDP and jobs and insinuating that the deficit expanded and the jobs and GDP situations deteriorated under his predecessor’s stewardship. The facts indicate otherwise¬†otherwise. The current account deficit averaged 2.5% […] More

FOMC Preview

March 15, 2017

Over the past six weeks since the last FOMC policy announcement on February 1, the dollar has appreciated marginally more than 1.0% against the euro and yen, and the 10-year Treasury yield is advanced 9 basis points. Whereas these changes tighten monetary conditions, a 9% net decline in oil prices and a 5% rise in […] More

Mexico’s Contribution to U.S. Trade Imbalance

March 7, 2017

Merchandise trade between the United States and its southern neighbor has become a central policy priority of the Trump administration. U.S. companies have been accused of exporting jobs to Mexico where labor is cheaper. A second complaint is that Mexico allegedly engages in unfair trade practices, and a third is that income earned by legal […] More

Non-Manufacturing PMIs: U.S. and Ezone Both Improve

March 3, 2017

The non-manufacturing U.S. PMI rose 1.1 points to a 16-month high of 57.6, and Euroland’s services purchasing managers index 1.8 points to a 69-month high of 55.5. The sum of these spreads and the manufacturing PMI differential rose 0.8 points to 4.4, giving the U.S. its widest combined advantage since the middle of 2015. PMIs […] More

Widest U.S. Manufacturing Advantage Versus Euroland in Two Years

March 1, 2017

The Institute of Supply Management’s U.S. manufacturing purchasing managers index jumped 1.7 points in February to a 28-month high of 57.7. This faster improvement of conditions was led by new orders, up 4.7 points, and production, up 1.5 points. Inflationary pressured settled back a point but remained well above the 50 level that separates expansion […] More

February in Figures

February 28, 2017

Equities were bid sharply higher in February, and the dollar appreciated mostly. Ten-year sovereign debt yields, which had risen during January, reversed course. Short-term interest rates were steady, and commodity prices climbed. 10-Yr Yield o2/28/17 01/31/17 Chg v End-Jan U.S. 2.38% 2.45% -7 Basis Points Germany 0.20% 0.43% -23 Japan 0.04% 0.07% -3 U.K. 1.15% […] More

FOMC Minutes

February 22, 2017

Minutes from the January 31/February 01 meeting of the Federal Open Market Committee policy review revealed little information that contradict general perceptions of the current thinking and contingent intentions of policymakers. The meeting was the first after the one in December that had raised the federal funds target by 25 basis points. Donald Trump had […] More

Little Change in U.S. Non-Mfg or Euroland Service Sector PMI Readings

February 3, 2017

The Institute of Supply Management’s U.S. non-manufacturing purchasing managers index dipped 0.1 of a point to 56.5 in January as business activity and new orders grew less rapidly than in December but jobs and prices expanded at a faster pace. Euroland’s service sector PMI was unchanged at 54.4. The national readings for France, Ireland, and […] More

Bigger U.S. than Ezone Acceleration in Manufacturing Last Month

February 1, 2017

The U.S. Institute of Supply Management reported a 1.5-point increase in the manufacturing purchasing managers index to a very robust 26-month high reading of 56.0. That advance, which followed a combined 2.5-point increase in the last¬†two months of 2016, was powered in January by gains of 3.5 points in prices, 3.3 points in jobs, and […] More