Keep an eye on these government bond auctions, especially for Spain and Portugal, as a bad auction can provide the catalyst for further risk aversion: June 9th: 09:00 GMT Germany: 2y Schatz Auction €6bn 09:30 GMT Portugal: 3y and 10y auctions €1.5bn 09:30 GMT UK: New 2020 Gilt £3.75bn 17:00 GMT US: 10y Note Auction $21bn June 10th: […]
Archive:
US
Global markets may be converging on a new ‘volatile’ norm as investors revalue risk, as governments begin the painful process of deleveraging to more sustainable debt levels. Thus far fears of sovereign defaults have remained contained to the usual suspects—fundamentally weak nations—leading investors to flock to the safe-havens of the U.S., Japan, and Germany. Risk […]
As of this morning, not only have US equities (as measured by the MSCI)outpaced their global counterparts, but on a year-to-date basis it’s the only index still showing gains, albeit somewhat modest. Interestingly, as of this week the spread between the MSCI US and MSCI World index reached its highest spread of the year, mostly due to […]
Next week the Fed will cease purchasing agency MBS, to an industry outsider this innocuous sounding fact may not garner much attention, but the reality is the implications are likely very significant, and are already making themselves apparent in the market. Former Fed Chairman Alan Greenspan recently referred to last week’s jump in U.S. interest […]
As the invisible hand of the market continues wrestling the imprudent hand of governments; consequences will be felt across the globe as one hand hits the table… Government stimulus and monetary policy has undoubtedly led us out of one of the worst recessions since the Great Depression, but what impact will these policies have on […]
Since China opened the flood gates to foreign investment in the 1990s, the country has significantly outpaced the developed world, especially the US, in terms of economic growth (see Chinese vs. US real GDP growth chart). Consequences of China’s success have included increased urbanization (see population chart) and a burgeoning middle class. Never before in […]
I have received several inquiries regarding the recent divergence between the BDI and my dry bulk shipping index (DBSI), and thought I should touch on the subject. First and foremost I believe that a large portion of the divergence can be explained as a US dollar story. Also, recent weakness has been mostly isolated to […]
As seaborne shipping acts as the bridge for global trade, the US’s railroad and trucking systems are the backbone of domestic bulk transport. It goes without saying that at some point the majority of goods imported to or exported from the US likely find themselves traveling on a rail car or truck before reaching their […]
As expected the Fed announced no changes to the target range for the federal funds rate, which currently stands at between 0% and 0.25%. The market was trading up prior to the announcement on what was generally expected to be a more constructive economic outlook from the Fed. In fact the Fed did seem more […]
Payrolls in the US fell by -247,000 in July, with the unemployment rate moving to 9.4% from 9.5%. This compares to last month’s revised change of -443K, and a consensus forecast of -300K. This number exceeds both the streets and my own expectations. The drop in the unemployment rate was caused by a reported decrease […]