Category Archive: 5) Global Macro

Dollar Trading Sideways as FOMC Meeting Begins

The FOMC begins its two-day meeting today with a decision out tomorrow afternoon; Senate Minority Leader McConnell has finally agreed to a power-sharing deal based on the 2001 model; President Biden signaled willingness to negotiate his stimulus proposal in order to get a bipartisan deal; Fed manufacturing surveys for January will continue to roll out; Brazil reports mid-January IPCA inflation

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Dollar Flat as Markets Await Fresh Drivers

Discussions on President Biden’s proposed $1.9 trln fiscal package are getting off to a rocky start; Fed manufacturing surveys for January will continue to roll out. ECB Governing Council member Olli Rehn viewed yield curve control for the region as “not sensible”;

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Dollar Weakness Continues Ahead of ECB Decision

Joe Biden became the 46th President of the US; three Democratic Senators were also sworn in; weekly jobless claims data will be the highlight of an otherwise quiet week; Fed manufacturing surveys for January will continue to roll out; Brazil kept rates on hold at 2.0%, as expected ECB is expected to keep policy unchanged; Norges Bank kept rates steady at 0%, as expected;

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Dollar Continues to Soften Ahead of Inauguration

President-elect Biden will be inaugurated and becomes the 46th President of the United States at noon; he will hit the ground running by announcing a raft of executive orders upon taking office; Janet Yellen’s confirmation hearing was revealing; Canada and Brazil are expected to keep rates unchanged.

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The Dangerously Diminishing Returns on Monetary and Fiscal Stimulus

Allow me to translate the risible claims of Jay Powell and Janet Yellen that their stimulus policies haven't boosted wealth inequality to the moon: "Let them eat cake."

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Drivers for the Week Ahead

President-elect Biden will be inaugurated Wednesday; security in Washington DC and many state capitols has been beefed up due to concerns of violence; the Senate reconvenes Tuesday and will immediately begin work on confirming Biden’s cabinet choices; reports suggest that if asked, Yellen will disavow a weak dollar policy whilst affirming commitment to a market-determined exchange rate.

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Politics Get Weird, Markets Don’t Care

A mob, led by a shirtless man wearing a Viking helmet, stormed the Capitol building a couple of weeks ago and five people died before order was restored. A man from upstate New York sat in a Senator’s office and smoked a joint. Another roamed the halls of Congress with a Confederate flag.

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Consumers, Producers, and the Unsettled End of 2020

The months of November and December aren’t always easily comparable year to year when it comes to American shopping habits. For a retailer, these are the big ones. The Christmas shopping season and the amount of spending which takes place during it makes or breaks the typical year (though last year, there was that whole thing in March and April which has had a say in each’s final annual condition).

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If the Fed’s Not In Consumer Prices, Then How About Producer Prices?

It’s not just that there isn’t much inflation evident in consumer prices. Rather, it’s a pretty big deal given the deluge of so much “money printing” this year, begun three-quarters of a year before, that consumer prices are increasing at some of the slowest rates in the data.

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Rising Probability For A Second Payroll Minus (and its implications)

Revolving consumer credit declined again in November 2020, according to data released by the Federal Reserve last week. Though the monthly seasonally-adjusted change was small, it still represents significant uncertainty and material mistrust of the underlying economic condition among a broad section of consumers.

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Is 2021 an Echo of 1641?

If you don't discern any of these dynamics in the present, what are you choosing not to see? The reason why history rhymes is that humanity is still using Wetware 1.0 and so humans respond to scarcity, abundance and conflicts over them in the same manner.

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Dollar Regains Some Traction as Markets Search for Direction

House Democrats will move ahead with impeachment proceedings today; December CPI data will be the US highlight; heavy UST supply this week wraps up with a $24 bln sale of 30-year bonds; December monthly budget statement will be of interest the Fed releases its Beige Book report; several Fed officials pushed back against notions of tapering anytime soon

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Dollar Runs Out of Steam as Sterling Leads the Way

The US curve continues to steepen; real US yields have become less negative; UST supply will remain an issue as $38 bln of 10-year notes will be sold today; Brazil reports December IPCA inflation.

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2021: If It Wasn’t For Bad Luck, We Wouldn’t Have No Luck At All

If we have indeed begun a sustained "reversal of fortune", it might be prudent to consider the possibility we're only in the first inning of a sustained run of back luck.

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They’ve Gone Too Far (or have they?)

Between November 1998 and February 1999, Japan’s government bond (JGB) market was utterly decimated. You want to find an historical example of a real bond rout (no caps nor exclamations necessary), take a look at what happened during those three exhilarating (if you were a government official) months.

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There’s Always A First Time

Is it a race against time? Or is it trying to set aside today so as to focus entirely on a specific kind of tomorrow? It’s easy to do the latter especially when today is what it is; you can’t change what’s already gone on.

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The Tyranny Nobody Talks About

All the tricks to hide our unaffordable cost structure have reached marginal returns. Reality is about to intrude. There is much talk of tyranny in the political realm, but little is said about the tyrannies in the economic realm, a primary one being the tyranny of high costs: high costs crush the economy from within and enslave those attempting to start enterprises or keep their businesses afloat. Traditionally, costs are broken down into...

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Seizing The Dirt Shirt Title

In mid-December 2019, before the world had heard of COVID, China’s Central Economic Work Conference had released a rather startling statement for the world to consume. In the West, everything was said to be on the up. Central banks had responded, forcefully, many claimed, more than enough to deal with that year’s “unexpected” globally synchronized downturn.

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The Coming War on Wealth and the Wealthy

Here's looking at you, Federal Reserve--thanks for perfecting 'legalized looting' and neofeudalism in America.

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2020 Was a Snack, 2021 Is the Main Course

One of the dishes at the banquet of consequences that will surprise a great many revelers is the systemic failure of the Federal Reserve's one-size-fits-all "solution" to every spot of bother: print another trillion dollars and give it to rapacious financiers and corporations.

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