Deeper Analysis

Biggest Euro Area Advantage Over U.S. Since August 2016

December 1, 2017

The ISMĀ purchasing managers index for U.S. manufacturing settled back a further 0.5 points in November to 58.2 from 58.7 in October and a 13-year high of 60.8 in September. A reading of 58.2 still represents a robust rate of expansion and all the more so because sub-indices for production (up 2.9 points to 63.9) and […] More

November in Figures

November 30, 2017

The dollar fell mostly during November, constituting a change in direction from movements in October. Nonetheless, U.S. stocks recorded impressive gains just as they had the month before. Japanese share prices also climbed sharply in November, but many European stock markets declined. Investors became more confident that the Federal Reserve would hike interest rates in […] More

Non-Manufacturing PMIs in the U.S. and Euroland

November 6, 2017

The U.S. non-manufacturing purchasing managers index compiled by the Institute of Supply Management edged up 0.3 points to 60.1 in October. Faster growth in sales and jobs outweighed slower growth in new business and prices. Euroland’s services PMI for October fell 0.8 points to 55.0. The German, Italian, Spanish and Irish readings each droppedĀ more than […] More

Similar October Manufacturing PMI Indices in U.S. and Euroland

November 2, 2017

It was reported today by IHS Markit that Euroland’s manufacturing purchasing managers index rose 0.4 points to an 80-month high of 58.5. Being above 50 since July 2013 means that conditions in manufacturing have been improving since then, and the higher level in October means that the rate of improvement quickened last month. This faster […] More

October in Figures

November 1, 2017

Whereas September had experienced upward pressure on long-term interest rates, October had a slight downward bias. The rhetoric after central bank meetings in Japan and Euroland was a bit more dovish than expected, leaving an impression there will not be an initial interest rate hike in 2018 by either. Stock markets performed will during October, […] More

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