Tag Archive: Great Graphic

Great Graphic: Trade-Weighted Dollar

US TWI has appreciated a little since the end of Q1. The euro and sterling's strength are exceptions to the rule. The dollar has edged up against the currencies of the US top four trading partners here in Q2.

Great Graphic: Gas and Oil

Steep falls in gasoline and oil prices. Large build in gasoline inventories and record refinery work shifted some surplus from oil to the products. OPEC is expected to roll over its output cuts, but non-OPEC may find it difficult and US output...

NAFTA Trade Update

The trade tensions between the US and Canada set the Canadian dollar to lows for the year. The dollar's downside momentum against the Mexican peso has eased. The Canadian dollar looks attractive not against the US dollar but against the peso.

Longevity and Income

Rich people live longer than poor people in the US. This disparity undermines the progressive nature of Social Security. Disparity of income seems more important than the slowdown in growth in explaining why few US people are doing better than their...

State of Dollar Bull Market

The dollar market is intact, despite the pullback here at the start of 2017. We have seen similar pullbacks in 2016 and 2015. Divergence remains the key driver.

Euro’s Record Losing Streak Against the Yen

The euro has fallen for 11 consecutive sessions against the yen. Interest rates, US and German in particular, seem to be the main driver. Technicals are stretched, but have not signaled a reversal yet.

Great Graphic: Emerging Market Stocks

MSCI Emerging Market Index is up 12.25% here in Q1. The index is approaching long-standing technical objectives. Look for profit-taking ahead of quarter-end as fund managers rebalance.

Great Graphic: Fed’s Real Broad Trade Weighted Dollar

To begin assessing the dollar's impact on the US economy, nominal bilateral exchange rates may be misleading.  From a policymakers' point of view, the real broad trade weighted measure is more important.  The Federal Reserve tracks it on a monthly...

Primary Budget Balances in EMU

Greece debt has rallied as a repeat of the 2015 crisis seems less likely. The EC may turn its attention to Italy's structural deficit. There are several countries, including France that is forecast to have a larger primary deficit in 2018 than 2017.

Dollar Index: The Chart Everyone is Talking About

Many are discussing a possible head-and-shoulders pattern in the Dollar Index. We are skeptical as other technical signals do not confirm. We recognize scope for disappointment over the border tax and the next batch of employment data, but European...

Great Graphic: US and Japan Five-Year Credit Default Swaps

For the first time since the financial crisis, the 5-year CDS on JGBs is dipping below the 5-year US CDS. It appears to be more a function of a decline in Japan's CDS than a rise in the US CDS. We are reluctant to read too much into the small price...

What is Good for the Dollar is Bad for Gold

The Dollar Index is powering ahead, moving higher for the eighth consecutive session. Over the past 100 sessions, gold and the Dollar Index move in the opposite direction more than 90% of the time. The technical condition of gold is deteriorating.

Great Graphic: Interesting Sterling Price Action

Sterling is having an interesting day. It fell in the face of the US dollar's bounce but has recovered fully. It has not yet traded above yesterday's high (~$1.2510) but it may. It does appear to be tracing out a hammer in Japanese candle stick terms.

The Dollar: Real or Nominal Rates?

Real interest rates are nominal rates adjusted for inflation expectations.Inflation expectations are tricky to measure. The Federal Reserve identifies two broad metrics. There are surveys, like the University of Michigan's consumer confidence survey,...

Great Graphic: French Premium over Germany Continues to Grow

European premiums over Germany typically increase in a rising interest rate environment. France's premium is at the most in two years. France is still set to turn back the challenge from Le Pen.

Great Graphic: Mexico and China Unit Labor Costs

Mexico has been gaining competitiveness over China before last year's depreciation of the peso. The depreciation of the peso, and other US actions can contribute to the destabilization of Mexico. An economically prosperous and stable Mexico has long...

Great Graphic: How a Strong Dollar Weighs on Net Exports

Investors appreciate that a strong dollar can impact US growth through the net export component of GDP. The dollar's appreciation can push up the price of exports and lower the cost of imports. The St. Louis Fed took a look at how the strong dollar...

Great Graphic: Trade and Tariffs-End of an Era?

This Great Graphic was tweeted by the Financial Time's John Authers, who got it from @fathomcomment. The green line is the inversion of global trade (right-hand scale). The blue line is a trade-weighted average global tariff rate. What the chart shows...

Great Graphic: Is the Pound Sterling?

Sterling's 2.75% rally today is the biggest advance in more than eight years. The UK government has done a good job of managing expectations. Over the last week or so, Prime Minister May and Chancellor of the Exchequer Hammond has made it clear that...

The Difference of an A and BBB for Italy

DBRS cut Italy's rating to BBB from A. It will increase the haircut on Italy's sovereign bonds used for collateral by Italian banks. It is not a mortal blow or a significant hit, but is not helpful, except to add pressure on Italy and further reduce...
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