Chicago Fed Nat’l Activity Index: February 2016 Preview
The three-month average of the Chicago Fed National Activity Index (CFNAI) is expected to tick higher in the February update that’s scheduled for Monday (Mar. 21), based on The Capital Spectator’s average point forecast for several econometric estimates. The average projection for -0.08 reflects a slight improvement over the previous month, which indicates US economic activity […]
Thoughts On Conspiracy Theories Of The Dollar’s Losses
In our work, we have argued that the dollar is having its third significant rally since the end of Bretton Woods. The first rally was associated with Reagan though it began under Carter and followed 100 bp hike by a new Federal Reserve Chairman (Volcker). On a real broad trade-weighted basis, the dollar appreciated by more than 50% over the seven […]
Dollar Loses Ground
We’ve seen a change in the tone to FX markets this week, with the dollar index moving to new lows for the year, and is now down a cumulative 5% since the start (calculation helped by close at 100.0!). Remember, once again, many started the year with a bullish dollar view, based on the Fed continuing its […]
US Money Supply And Debt – Early Warning Signs Remain Operative
Still Slowing Down Year-end distortions have begun to slowly come out of the data, and while broad true US money supply growth remains fairly brisk, it has begun to slow again relative to January’s y/y growth rate, to 7.8% from 8.32%. So far it remains in the sideways channel (indicated by the blue lines below) […]
Why Currency Traders Are So Confused
This morning the WSJ leads with an article that summarizes the prevailing market confusion at the moment, namely that global currencies are soaring, “defying central bankers” despite a flurry of easing around the globe in the past month, all of which have been undone by one Fed dot plot which cut the number of rate hikes forecast […]
Why Are Stocks Moving? Printing Massive Amounts Of Money, Or In The Fed’s Case Refusing To Tighten?
Why are Stocks Moving? Printing massive amounts of money, or in the Fed’s case refusing to tighten? As obvious as the tech crash in 2000 or the housing bubble… are bells ringing in your ears why stocks are moving. We are trend followers and we all know that stocks rally due to liquidity… we saw […]
USD: The Pain Trade – Morgan Stanley
The fallout from the dovish Fed decision continues and some see a long term change to the downside. What’s next? Here is the analysis from Morgan Stanley: Here is their view, courtesy of eFXnews: More short-term USD weakness. “The dovish Fed – discouraging USD bulls – has led to a de-positioning move supporting the once shunned currencies. GBP, […]
The Stock Market Likes Higher Inflation… For Now
The US stock market continued to climb out of a hole yesterday. The S&P 500 closed at its highest level so far this year. Yesterday’s rise comes a day after the Federal Reserve decided to hold off on rate hikes, citing increased macro risks–here and abroad. But if equities are reacting positively to revived expectations […]
EC Have Economists Learned Nothing Since The 1970s?
Judging by Ambrose Evans-Pritchard’s 15th March article in the Financial Times, which rehashes the most popular economics-related fallacies of the 1970s, the answer to the above question is a resounding NO. Here’s an excerpt from the article that neatly encapsulates the ideas that were widely believed by economists during the 1960s-1970s, that were shown to be false during […]
WTI Crude Oil And Natural Gas Forecast – March 18, 2016
WTI Crude Oil The WTI Crude Oil market rose during the course of the session on Thursday, breaking above the $40 level. This is a very interesting move, because we know that shale oil producers are looking to enter the market somewhere around the $40 level. Because of this, it’s hard to imagine this market […]
