The United States: Below is a long-term chart of the “milk, eggs, and bread” basket (red) broken into the three components (in dollars). This basket is now the cheapest in a decade.
– Here is a summary breakdown.
Rates: As central banks taper their QE purchases and the Fed starts shrinking its balance sheet (first chart below), the net new supply of sovereign bonds is expected to rise significantly over the next couple of years (second chart below).
Equity Markets: Quarterly earnings reports have been going quite well so far.
Commodities: The sugar market remains oversupplied.
Emerging Markets: Oil-driven GDP expansion in Saudi Arabia is coming to an end. That’s why the Kingdom is eager to diversify its economy away from energy.
China: Softer-than-expected inflation in the US sent the renminbi FX forward rates to pre-US-election highs.
The Eurozone: While the euro area’s growth expectations continue to get upgraded, inflation forecasts remain subdued.
Global Developments: Here is a helpful summary of fiscal and monetary policy dynamics for the largest economies.
Food for Thought: Streaming video businesses are making inroads in original content production.
Edited by Joseph N Cohen
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Thanks to Josh Marte (@joshdigga), Matt Garrett (@MattGarrett3), Joseph Cohen (@josephncohen), Ycharts.com, S&P Global, and Moody’s Investors Service for helping with the research for the Daily Shot.
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