Euroland PPI
Lessening Confidence that U.S., European, or Japanese Central Banks Will Ease Monetary Policy Soon or By Much
November 7, 2023
A big takeaway from the 1970s is that inflationary periods evolve in waves when monetary policy is sensitive to signs of weakening growth. That is why central bankers for the past year have been emphasizing a need not just for actual and expected price deceleration but strong confidence that inflation will return all the way […] More
Fitch’s Downgrade of the U.S. Debt Rating Pushes Long-Term Interest Rates Higher
August 3, 2023
In the wake of the announced downgrading of U.S. government debt and amid doubts about a coming recession, the 10-year Treasury yield rose nine basis points overnight and touched a high of 4.18%, which compares to 3.31% just over four months ago. 4.18% is the highest level since early last November. Other 10-year sovereign debt […] More
Price of Oil Back in the Spotlight
June 5, 2023
At the weekend’s meeting of OPEC plus oil ministers, Saudi Arabia announced a further production cut of one million barrels barrels per day, effective July 1, and WTI oil is trading 2.6% higher as a result although about $1.5 below today’s earlier peak. The dollar has opened the week on an up beat, with gains […] More
Mulling Service-Sector PMI Results and Waiting for the ECB Rate Hike
May 4, 2023
The dollar is modestly softer this Thursday, with drops of 0.2% against the yen and 0.1% versus the euro, Canadian dollar, and sterling. Ten-year sovereign debt yields have risen six basis points in Italy, 4 basis points in Spain, 2 basis points in Germany and the United States and a basis point in Great Britain. […] More
New Woes for Crypto… Service Sector Purchasing Manager Surveys Beat Expectations
March 3, 2023
The price of Bitcoin tokens plunged around 5% overnight. The dollar has declined 0.4% against the Swiss franc and yen, 0.3% versus sterling and the Australian dollar, but just 0.1% relative to the euro. It’s been an up day by and large for equities, with gains of 1.6% in Japan, 1.5% in India, 0.7% in […] More
U.S. Data Out Today Supports Fed Message that a Rate Cut in 2023 is Highly Doubtful
January 5, 2023
The 2022 dynamic of progressively tighter Fed policy supporting the dollar and depressing stocks and bonds remains intact. Minutes from the December FOMC meeting project higher interest rates persisting for some time and indicates that market valuations that imply an initial rate cut late in 2023 are premature. Although inflation cooled in recent months in […] More
Stronger-Than-Forecast U.S. & Canadian Labor Market Reports Reverse Market Momentum
December 2, 2022
North American labor markets again showed great resilience in the face of elevated inflation, tighter monetary policies, and mounting recessionary fears. Normally, that would be a good development for financial markets but not, like the present, when central bankers are trying to endow labor markets with some slack. U.S. share prices had marked time prior […] More
Big Market Turnaround: Equity Rebound and Lower Dollar and Sovereign Debt Yields
October 4, 2022
Market expectations of how much further the federal funds target rate will be raised in the coming six months have been scaled back significantly. The catalyst has been evidence of softer U.S. demand, notably visible in yesterday’s ISM-compiled purchasing managers survey of manufacturers, which dropped 1.8 index points to a 28-month low of 50.9. Sub-indices […] More
Shortlived Equity Rally, More Inflationary Reports, and Day One of an Historic FOMC Meeting
May 3, 2022
Tech stocks had rallied in the final hour of Monday trading, but futures point to a likely drop of at least 0.5% at the start of Tuesday’s session. Share prices fell 0.9% in New Zealand, 0.6% in Taiwan, 0.4% in Australia, and are down 0.8% in the U.K., whose market had been closed for holiday […] More
Financial Markets Reflecting Concerns about Stagflation and Russian Military Aggression
April 6, 2022
Investors are bracing for aggressive monetary policy tightening in the United States and elsewhere to counter inflation that has climbed shockingly high, and business confidence in the one-year economic outlook has been scaled sharply backward. Ten-year sovereign debt yields jumped overnight by ten basis points in the United States and Great Britain, eight bps in […] More
