• Upcoming Fed meeting: Being contrarian has good reason

    Since the March Fed meeting, there have been no significant changes in the US economy to justify the current expectations of three rate cuts until February 2020 (the most likely outcome).

  • Ballooning US government debt. Should it scare away investors?

    Major foreign holders of US debt – including “official” buyers such as central banks and government organisations and private investors, have increased their holdings, despite by recent acceleration of growth rate of borrowing by the US government.

  • What is the relationship between gold and interest rates? Should we expect the development of correction?

    Three meetings of central banks — the Fed, the Bank of Japan, and the Bank of England — will take place this week, and the first remarkable reaction in the market was a brisk liquidation of gold holdings.

  • Key economic events and reports of the upcoming week

    Monday, June 17, 2019 – Inflation Report Hearings (GBP).

  • Cooperation vs. Competition: OPEC favours the former

    OPEC and other oil exporting nations, including Russia, are in the final stage of negotiating an agreement, which may be signed in early July, aimed at cooperation in the oil production domain, Japanese Nikkei newspaper reported referring to comments of Russian Energy Minister Alexander Novak.

  • Chinese data keeps disappointing suggesting more stimulus measures are ahead

    Seeing downside surprises in the Chinese economic data is gradually becoming a habit. The growth rate of industrial output slowed to a 17-year low in May while decline in investment in fixed assets suggests that a quick recovery in production can’t be expected in the near-term.

  • Ailing manufacturing and services sector prompt Chinese authorities to ramp up credit easing

    US commercial oil inventories have been almost uninterruptedly growing from mid-March since the prices above profitability threshold permitted producers to step up production efforts. OPEC statements about rebalancing efforts have limited impact and weren’t positive enough to curb fears associated with consumption outlook.

  • Goldman Sachs and Deutsche bank warn investors about a pipe-dream

    Goldman Sachs has recently been a token of vocal opposition to market consensus regarding the path of the Fed interest rate.

  • Powell’s “act as appropriate” wording sends stock higher and dollar plunging, as trade risks intensify

    China’s confidence in the need of a fresh round of credit stimulus could strengthen, as shown by the services PMI report from local agency, Caixin. The agency’s formula for the activity index gives more weight to private companies, compared to government PMI estimates which can be biased toward government supported, and thus more stable enterprises. According to the Caixin report, services PMI fell in May from 54.5 to 52. 7 points, missing projections. The composite index that combines production and services fell from 52.7 in April to 51. 5 points in May.

  • Are there any ways for China to avoid tariffs?

    One of Trump’s more-welcome results from the tariffs on Chinese goods was a reduction of the trade deficit with China. Last year, trade data posted ambiguous results, where, despite the introduction of tariffs, the deficit in trade rushed to a new negative record.

  • JP Morgan suggests 60% chance of recession by 2020

    The trade war led to an impressive reversal in the scenarios of development of global economy, periodically released by large banks. In its latest release, JP Morgan warns clients about possible two rate cuts by the Fed in 2019 while Barclays sees the need for three rate cuts on an emergency basis. Goldman Sachs looks a little more optimistic for now abandoning the case for one rate hike in 2020.

  • Key economic events and reports of the upcoming week

    Monday, June 3, 2019 – Caixin Manufacturing PMI (May)(CNY), German Manufacturing PMI (May)(EUR), Manufacturing PMI (May)(GBP), Inflation Report Hearings (GBP), ISM Manufacturing PMI (May)(USD).

  • Risk-off sentiments reappear after Trump imposes tariffs on Mexico

    The flight from risk assets to safe heavens drove gold price sharply higher on Friday, following a sudden tariff blow to Mexico and a continued deadlock in the US-China tariff spat.

  • New leg of credit easing for Chinese economy soon?

    The tariff war is slowly but surely shaking one of the most fragile pillars of the Chinese economy — the private small enterprises in the manufacturing sector.

  • Why is the yield curve inversion only a warning but still not a sign of recession?

    Inversion of the US yield curve continues, becomes stronger and captures more and more sections of the curve, but why is this just a warning, not a sign of recession?