Greetings, The United States: Here is the progression of tariffs on Chinese imports (increasingly impacting consumer products). Rates: Here is an updated chart on Treasury holdings. China: Deutsche Bank expects China’s current account balance to flip into deficit next year. The Eurozone: When is the ECB’s “liftoff”? Equities: While bank shares tend to …
Continue reading “The Daily Shot Brief – October 18th, 2018”
Greetings, The United States: Here, we have a few additional updates on the housing market. • This chart shows mortgage originations by loan type. • The housing sector’s contribution to the GDP remains below the pre-crisis highs (the housing recession began in 2006). • And here is the housing affordability index by region. Rates: With cross-currency swap …
Continue reading “The Daily Shot Brief – October 17th, 2018”
Greetings, The United States: Google search frequency for home financing continues to drift lower. Rates: Here is an updated FOMC dove-hawk spectrum. China: China’s domestic liquidity has contracted. Will we see interbank rates spike as we approach the year-end? The Eurozone: Based on the current spread levels, Italian debt should be …
Continue reading “The Daily Shot Brief – October 16th, 2018”
Greetings, The United States: The probability of a recession over the next six months remains modest. Rates: This chart shows who is long and short the two-year Treasury futures. China: The rate differential between China and the US has been closing, which has been putting downward pressure on the yuan. The Eurozone: …
Continue reading “The Daily Shot Brief – October 15th, 2018”
Greetings, The United States: This scatterplot shows US average hourly wages vs. the unemployment gap. As wage growth improves, so should the core PCE inflation (the Fed’s preferred measure). Here is Morgan Stanley’s core PCE forecast for next year. Rates: Most of the increase in Treasury yields over the past 30 days has been …
Continue reading “The Daily Shot Brief – October 12th, 2018”
Greetings, The United States: This chart shows the divergence between the US and China’s business activity. Is it sustainable? Rates: This chart compares the 3-month T-bill yield to the equivalent rate in Germany and the UK. China: Portfolio flows are still positive but have slowed. The United Kingdom: Below is the UK’s service-sector …
Continue reading “The Daily Shot Brief – October 11th, 2018”
Greetings, The United States: Railcar loadings remain well above the levels we saw in previous years, pointing to robust growth in the US. Rates: How much of the Treasury yield increase has been due to the Fed’s quantitative tightening? China: This chart shows the key indicators for China’s real estate and construction sector …
Continue reading “The Daily Shot Brief – October 10th, 2018”
Greetings, The United States: Models show that the probability of a recession next year has diminished (pushed out to 2020). Rates: The probability of three Fed rate hikes in 2019 keeps climbing. China: F/X forwards continue to point to a weaker yuan ahead. The Eurozone: Despite higher oil prices, the Eurozone’s long-term …
Greetings, The United States: Despite the manufacturing sector’s relatively small contribution to the (service-focused) US economy, factory earnings make up a significant portion of the total nonfinancial operating profits. Global Developments: How long do economic expansions last? The analysis below is based on 77 advanced-economy recessions. China: Despite concerns about a slowdown, …
Greetings, The United States: The FOMC has consistently been underestimating the pace of declines in the unemployment rate during this cycle. Global Developments: How have the government debt-to-GDP ratios changed since 2006? China: The rate of new project approvals suggests increasing fiscal stimulus. The Eurozone: Has the Fench debt-to-GDP ratio peaked? …
