Daily Comment

Daily Comment (August 10, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The dollar fell overnight as the market adjusted its expectations lower for a rate hike.  The market-implied probability of a Fed rate hike in September is 22%, and the likelihood reaches 52% in May 2017.  The yields on 10- and 30-year U.K. bonds fell to record… Read More »

Daily Comment (August 9, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It was another quiet overnight session.  Chinese inflation data (see below) was roughly in line with expectations.  U.S. equity futures are modestly higher this morning, and Treasuries are rallying a bit as well.  If anything, market action is consistent with late summer. However, there are a… Read More »

Daily Comment (August 8, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] Equity markets continue to move higher across the globe as the dollar rises in the wake of Friday’s employment data.  We have seen two consecutive strong employment reports and this has raised expectations of tighter monetary policy.  As tightening expectations ramp up, the dollar is steadily… Read More »

Daily Comment (August 5, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The big news today is the employment report, which we will cover in detail below.  We do want to note that economic data from Germany and the U.K. were unusually weak and natural gas inventories recorded a rare August draw in stockpiles. There has been some… Read More »

Daily Comment (August 4, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The big news today is that the BOE cut rates 25 bps, to 0.25%, and clearly signaled a move to zero by year’s end.  It also increased QE by £60 bn and will include corporate bonds in its purchases.  This is the bank’s first rate cut… Read More »

Daily Comment (August 3, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] In the wake of the BOJ and Abe disappointment yesterday, we have been observing a steady backup of long duration yields.  So far, this isn’t anything too serious, but the market narrative behind it is important.  There is a growing concern that BOJ monetary policy may… Read More »

Daily Comment (August 2, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The big news overnight came from Japan as PM Abe’s cabinet approved the ¥28 trillion stimulus package.  Actual new spending is only about a quarter of the headline number.  The JPY appreciated on the news and the JGB saw a modest uptick in yields.  Overall, the… Read More »

Daily Comment (August 1, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] It’s global PMI day today.  As we note below, most of the data came in around expectations.  Australia was unusually robust while the U.K. was rather weak.  Overall, the data suggests a global economy that is mostly steady. We had two fed officials speak over the… Read More »

Daily Comment (July 29, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The BOJ disappointed the financial markets.  Expectations for a larger stimulus package, maybe even helicopter money, was hoped for.  Instead, the BOJ offered to boost ETF purchases and indicated it will perform a study of its stimulus programs, hinting perhaps that more could come later… Read More »

Daily Comment (July 28, 2016)

by Bill O’Grady and Kaisa Stucke [Posted: 9:30 AM EDT] The FOMC statement was generally as expected.   The committee acknowledged the economy improved from their last meeting.  Labor markets are better and household spending is robust.  On the other hand, business investment remains sluggish.  Overall, the FOMC indicates that “near-term risks to the economic outlook have… Read More »

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