• Key Economic Events and Reports of the Upcoming Week

    Monday, October 21, 2019 – PBoC Interest Rate(CNY). Tuesday, October 22, 2019 – Core Retail Sales (MoM) (Aug)(CAD), Existing Home Sales (Sep)(USD). Wednesday, October 23, 2019 – Crude Oil Inventories(Oil). Thursday, October 24, 2019 – German Manufacturing PMI (Oct)(EUR), ECB Interest Rate Decision (Oct)(EUR), Core Durable Goods Orders (MoM) (Sep)(USD), New Home Sales (Sep)(USD). Friday, […]

  • Markets are Skeptical about QE but Draghi is Adamant about the September move

    The new ECB’s stimulus package will not significantly help bring inflation back to target, economists surveyed by Reuters said, adding that the risk of recession in the eurozone has increased over the next two years. According to the September meeting, the ECB announced the resumption of asset-purchases for an indefinite period and took the deposit […]

  • The “Smart way” to Calculate GDP in China Could Hype the Real Growth Rate

    The “Official” pace of economic expansion in China in 3Q once again fell short of expectations, dropping to its lowest level in 30 years. Growth equaled the lower limit of the range set by the government at 6.0 – 6.5%. In order to maintain the growth rate in 4Q in the target range the government […]

  • A Hidden Problem of the US Consumer

    The lingering discord between the PMI surveys in the US manufacturing / non-manufacturing sector and the steady dynamics of consumption is probably the only thing that contains recession fears. As Morgan Stanley noted, the foundation of the current expansion was the absence of consumer shocks, which, in fact, began most of the past recessions. A […]

  • What Does High Inflation in the UK Tell us?

    In the “club” of developed countries, an inflation rate which is persistently higher above the target level and, all the more, high inflationary expectations, are a rather unusual phenomenon. Structural changes that explain the long-term decline in inflation are nearly the same everywhere — an aging population, a decrease in long-term GDP growth rates, more […]

  • Fed: We Need QE but Think of Another Name for it

    The minutes of September FOMC meeting released on Wednesday showed that most members expressed their support for the rate cut in September, but opinions were divided on the future course of monetary policy. With almost complete certainty, the minutes indicated that the policymakers will have to tackle the issue of balance sheet expansion on the […]

  • Key economic events and reports of the upcoming week

    Monday, October 7, 2019 – China – National Day.

  • Some Fed Members are ready to cut Rates on Risks of Slowing Consumption

    Two members of the Fed management team made it clear that they were ready to vote for more cuts in response to deterioration of activity in the services sector, but the deputy head of the US regulator spoke more cautiously on this matter.

  • Why Should we Expect Weak NFP Data in September?

    After an unexpectedly weak rise in the number of vacancies in the United States in August, when the US economy added only 139K jobs, September is also likely to be below the trend with a forecast of only 145K, a 0.3% MoM increase in salaries and 3.7% unemployment.

  • There are Bank Reserves, but not for all

    The jump in short-term funding costs in the US last month and subsequent liquidity injections from the Fed through emergency repos fueled debates about a new round of QE.

  • The Old Good “Ratchet Effect” in US Government Spending

    Some of you might notice that there was a major rebound on the US economic front in late Q3, which is best reflected in the index of economic surprises calculated by Citi.

  • Are Buybacks the Only Foothold for Stocks Currently?

    After the tax relief package was approved in the US in 2017, share buybacks pace of growth switched to the mode of “updating records”, and 2019 seems to be no exception. The ‘convenient’ and ‘easy to use’ tool, to maximize the company’s market valuation, was especially liked by technology companies. One recent example was Microsoft, which announced a buyback of shares to the tune of $40 billion. The company’s shares climbed 2.8% on the welcomed news.

  • “Rough Pressure” Backfires for the Left in the US

    Rough pressure backfires for the left in the US. The information, as they say, from the third party about Trump’s pressure on Zelensky in the investigation of Biden’s dark affairs in Ukraine, culminated in the formal inquiry of impeachment by the Democrats. Who, as it turned out, did not even bother to examine the underlying evidence.

  • Trump Impeachment Won’t Likely Happen and Here is Why

    “Democrats Week” remains the hottest source of trading clues on Wednesday. The call for Trump impeachment sent stock indices to a two-week low, and the increased risk aversion revived the trend up in risk-free assets. The dollar will briefly regain the status of a defensive asset, strengthening against other major currencies.

  • BoJ Kuroda: The Central Bank is Ready to Cut Rates in Response to External Risks

    The head of the Bank of Japan, Haruhiko Kuroda, said on Tuesday that if the Central Bank had to explore new depths of easy monetary policy, it will concentrate on near- and medium-term parts of the yield curve to avoid its further flattening.