Tag Archive: inflation

Start Long With The (long ago) End of Inflation

2021-12-24

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2021-12-24

With the eurodollar futures curve slightly inverted, the implications of it are somewhat specific to the features of that particular market. And there’s more than enough reason to reasonably suspect this development is more specifically deflationary money than more general economic concerns.

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One Shock Case For ‘Irrational Exuberance’ Reaching A Quarter-Century

2021-12-22

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2021-12-22

Have oil producers shot themselves in the foot, while at the same time stabbing the global economy in the back? It’d be quite a feat if it turns out to be the case, one of those historical oddities that when anyone might honestly look back on it from the future still hung in disbelief. Let’s start by reviewing just the facts.

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The Chagrin of Beijing and the Problem of Time

2021-12-19

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2021-12-19

The central bank meeting cycle is over. Most of the important high-frequency data has been released until early January. The US debt ceiling has been lifted, avoiding an improbable default. A year ago, there was a sense of optimism, with a couple of vaccines being announced and monetary and fiscal stimulus boosting risk-appetites. Populism, which had been in the ascendancy after the Great Financial Crisis, seemed to be retreating in Europe and the...

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Testing The Supply Chain Inflation Hypothesis The Real Money Way

2021-12-18

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2021-12-18

Basic intuition says this is a no-brainer. Producer prices rise, businesses then pass along these higher input costs to their customers in the form of consumer price “inflation” so as to preserve profits. This is the supply chain hypothesis. Statistically, we’d therefore expect the PPI to lead the CPI.And this was expected for much of Economics’ history, taken for granted as one of those self-evident truths (kind of like the Inflation Fairy). After...

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Weekly Market Pulse: Has Inflation Peaked?

2021-12-13

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2021-12-13

The headlines last Friday were ominous: Inflation Hits Highest Level in Nearly 40 Years. Inflation is Painfully High… Groceries and Christmas Presents Are Going To Cost More. Inflation is Soaring..

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Yuan Rises Despite China’s Move and the Fed’s Course is Set Regardless of Today’s CPI

2021-12-10

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2021-12-10

Overview:  After US equity indices posted their first loss of the week,  Asia Pacific and European equities fell.  While the MSCI Asia Pacific Index fell for the first time since Monday, Europe's Stoxx 600 is posting its third consecutive decline.  US futures are trading slightly firmer.  The US 10-year Treasury yield is up about 1.5 bp to 1.51%, which is about eight basis points higher than it settled last week when the sharp drop in equities saw...

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The Productive Use Of Awful Q3 Productivity Estimates Highlights Even More ‘Growth Scare’ Potential

2021-12-08

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2021-12-08

What was it that old Iowa cornfield movie said? If you build it, he will come. Well, this isn’t quite that, rather something more along the lines of: if you reopen it, some will come back to work. Not nearly as snappy, far less likely to sell anyone movie tickets, yet this other tagline might contribute much to our understanding of “growth scare” and its affect on the US labor market.

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US CPI to Accelerate, while Omicron adds Color to Covid Wave that was Already Evident

2021-12-04

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2021-12-04

At the risk of over-simplifying, there seem to be three sources of dynamism in the investment climate:  Covid, the Federal Reserve, and market positioning.  The last of these is often not given its due in narratives in the press and market commentary, so let's begin there.  The anthropologist Clifford Gertz once posed the question about distinguishing between someone winking and someone with a twitch in their eye, and a person mimicking the wink or...

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The Greenback Finds Traction ahead of the Jobs Report

2021-12-03

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2021-12-03

Overview:  The Omicron variant has been detected in more countries, but the capital markets are taking it in stride.  Risk appetites appear to be stabilizing.  The MSCI Asia Pacific Index rose for the third consecutive session, though Hong Kong and Taiwan markets did not participate in the advance today.  Europe's Stoxx 600 is struggling to hold on to early gains, while US futures are narrowly mixed.  The US 10-year yield is a little near 1.43%,...

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This Is A Big One (no, it’s not clickbait)

2021-12-02

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2021-12-02

Stop me if you’ve heard this before: dollar up for reasons no one can explain; yield curve flattening dramatically resisting the BOND ROUT!!! everyone has said is inevitable; a very hawkish Fed increasingly certain about inflation risks; then, the eurodollar curve inverts which blasts Jay Powell’s dreamland in favor of the proper interpretation, deflation, of those first two.

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Pessimistic Omicron Assessment Squashes Risk Appetites

2021-11-30

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2021-11-30

Overview: A pessimistic assessment offered by the CEO of Moderna shattered the fragile calm seen yesterday after the pre-weekend turmoil.  Risk appetites shriveled, sending equity markets lower and the bond markets higher.  Funding currencies rallied, with the euro and yen moving above last week's highs.  The uncertainty weighs on sentiment and makes investors question what they previously were certain of.  The MSCI Asia Pacific Index fell over 1%...

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The Black Friday Stock Market Crash – Gareth Soloway

2021-11-30

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2021-11-30

Black Friday 2021 saw the largest stock market sell-off since 1931. Is this the start of a bigger crash, has the trend changed or is this just a one-time blip? We ask Gareth Soloway of InTheMoneyStocks.com what his charts are suggesting and why he is so bullish on gold Watch the Video to Learn More Make sure you don’t miss a single episode… Subscribe to our YouTube channel Click Here to Download Your...

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Sentiment Remains Fragile

2021-11-29

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2021-11-29

Overview: The fire that burnt through the capital markets before the weekend, triggered by the new Covid mutation, burned itself out in the Asian Pacific equity trading earlier today. A semblance of stability, albeit fragile and tentative, has emerged. Europe's Stoxx 600 is up about 1%, led by real estate, information technology, and energy.  US index futures are trading higher, with the NASDAQ leading.  Benchmark 10-year yields are firmer.  The US...

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Jobs (US) and Inflation (EMU) Highlight the Week Ahead

2021-11-27

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2021-11-27

The new covid variant and quick imposition of travel restrictions on several countries in southern Africa have injected a new dynamic into the mix.

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Why Governments Hate Gold

2021-11-27

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2021-11-27

Do governments hate gold?  The answer: Yes — Governments hate gold because they cannot print it, and it is difficult for them to control.

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The ‘Growth Scare’ Keeps Growing Out Of The Macro (Money) Illusion

2021-11-26

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2021-11-26

When Japan’s Ministry of Trade, Economy, and Industry (METI) reported earlier in November that Japanese Industrial Production (IP) had plunged again during the month of September 2021, it was so easy to just dismiss the decline as a product of delta COVID.

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Flash PMIs Play Second Fiddle to US PCE Deflator and Accelerating Inflation

2021-11-20

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2021-11-20

The flash November PMIs would be the main focus in the week ahead if it were more normal times.  But these are not normal times, and growth prospects are not the key driver of the investment climate.  This quarters' growth is largely baked into the cake.  The world's three largest economies, the US, China, and Japan, are likely to accelerate for different reasons in Q4 from Q3.  Europe is the weak sibling, and growth in the eurozone and UK may slow...

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European Gas Jumps, while the Euro and Yen Slump

2021-11-17

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2021-11-17

Overview: The prospects that the 6.2% CPI will prompt the Fed to move quicker continue to underpin the dollar.  The euro fell to about $1.1265, its lowest level since last September, and the Japanese yen slumped to a fresh four-year low.  The JP Morgan Emerging Market Currency Index tumbled 1% yesterday, the largest decline since February.  A more stable tone is evident in Europe, as the euro has recovered above $1.13, and the JP Morgan Index is...

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China’s CPI Accelerated to 1.5%, US CPI to Approach 6%

2021-11-10

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2021-11-10

Overview: As bond yields slumped yesterday, stocks snapped their advancing streak.  The Stoxx 600 fell for the first time in nine sessions yesterday and is lower today.  The S&P 500 ended a nine-session advance, and the NASDAQ snapped a 12-session rally.  Futures on the indices point to a lower open.  Bonds are paring yesterday's gain, which saw the US 10-year yield fall below its 200-day moving average (~1.45%) and may explain the soft auction...

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US and China’s October Inflation Featured in the Week Ahead

2021-11-07

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2021-11-07

The cycle of the major central bank meetings has passed.  The Anglo-American central banks and Norway are ahead among the high-income countries in the adjustment of monetary policy. Meanwhile, the pandemic continues to scar, and flare-ups are extending the economic and social disruption in some large countries, including China and Russia.  Parts of Europe are experiencing another wave, including Ireland, the UK, and Germany. From the RBA and ECB to...

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