The angst that characterized the first several weeks of the year continues to dissipate. Major equity markets are extending their two-week recovery into the third week. Immediate concerns about the US falling into a recession have eased.
With equity markets tumbling, escalating tensions between a Saudi-led Sunni bloc against Iran, ongoing hostilities in Syria, North Korea testing what it claims to be a hydrogen bomb, the once precious yellow metal is looking perky.
Economists expected China's reserves to fall by around $33 bln in November. Instead, they fell by a little more than $87 bln. This is the third largest decline it has recorded, and a little below the $94 bln drop reported in August.
Some observers anticipate that with the yuan’s entry into the SDR that foreign central banks will quickly add the yuan to their reserves. We are less convinced. First, “can” and “will” should not be confused. Chinese officials have waived quota restrictions for foreign...
How much of a headwind is international exposure causing US-based companies? Factset did a study earlier this month, drawing on a combination of companies that had already reported Q3 earnings and used estimated results for those who had not reported.
The January Brent oil futures contract has broken down in the last 48 hours to approach its late-August lows. It has fallen a little more than 10% over the past week. The January light sweet crude contract is also headed south, falling about 12% since the recent high on November 3. It too has...
As this Great Graphic, composed on Bloomberg, illustrates, the divergence between the two ISMs is approaching record levels. The manufacturing sector is more exposed to international competition and the strong dollar than the service sector...
The US jobs data was considerably stronger than expected and leave no doubt about the December meeting being live despite the year-end considerations that some had seen tying the Fed’s hands. The dollar broke through key chart points near JPY122 and $1.08 for the euro.
With China’s economy slowing and exports weak, a devaluation could be a way to restore economic vigor. Many accounts in the western financial press tried placing the depreciation of the yuan in this context, but it is mistaken.
I was never one that anticipated the BOJ to step up its unorthodox easing of monetary policy next week. Talking with officials here I have become even more convinced that there is no strong sense of urgency to act.
Last month the FOMC explained their decision to stand pat by citing two factors: concerns about global developments and the decline in market-based measure of inflation expectations. Within a couple of business days...
There is nothing good that can be said about the US jobs data. It was simply dreadful. Every metric disappointed, and the August series which so often is revised higher, came in lower. This will raise fresh doubts about...
There are 195 sovereign states, according to the United Nations, and two “observer states” (Vatican and Palestine). The high income countries in North America, Western Europe and Asia-Pacific account for about 15% of...
The emission scandal at the world's second largest auto maker, Volkswagen, has reportedly "rocked" the German political and business elites. Some have argued that it will rival the refugee challenge for Germany.
Temporal Inconsistencies at the Fed: The Fed's decision to delay the beginning of the normalization of monetary policy undermines confidence in when lift-off will actually take place. It is clear that many, like ourselves...
The reasons why Brazil was downgraded to sub-investment grade are clear, and don't need further discussion beyond noting that the numbers are going to get much worse before they get better.
Economics is dubbed the dismal science because it studies scarcity. A question that predates human society is how should scarcity be distributed. Nature rewards the strong, the quick, and the cunning. Societies mitigate this...
US 10-year Treasury yields have risen 30 bp since Monday's low water mark. There are a number of reports that try to link the backing up in US yields to purported sales by China. The Chinese sales, in turn, are linked...
Chinese officials surprised the market by instituting a mini-devaluation of the yuan. The 1.9% move was signaled by announcing the highest dollar fix in two years. Officials indicated that this was a one-off move in response to...
The Canadian dollar is the worst performing major currency over the past month. It has lost nearly 4.5% against the US dollar. That brings its year-to-date loss to almost 12%. There have been two main sources...
