US Economy


Inside the US junk bond sell-off

From Moody’s: Fewer Defaults Will Stave Off Much Wider Spreads The high-yield bond market recently incurred a jarring sell-off. On October 24, the composite speculative-grade bond yield and its spread over Treasuries bottomed at 5.46% and 340 bp, respectively. By November 15, the spec-grade yield had jumped up to 6.13%, while the spread swelled to


Trump tax cuts all for the 1%

From Nouriel Roubini at Project Syndicate: US President Donald Trump, in partnership with congressional Republicans, is pursuing tax cuts that will blow up the fiscal deficit and add to the public debt, while benefiting the rich at the expense of middle- and working-class Americans. Once again, Trump has not hesitated to betray the people he


No surprise: Trump Administration’s Tax Plan to blow Budget deficit

Fitch Ratings has released an analysis of the Trump Administration’s tax reform proposal, which estimates that while growth would receive a short-term sugar hit, the US’ “structural” Budget deficit would also expand, lowering long-term growth, in addition to increasing inflationary pressures and causing monetary tightening: Such reform would deliver a modest and temporary spur to


US jobs preview

Via Calculated Risk: On Friday at 8:30 AM ET, the BLS will release the employment report for October. A key question is how much did hurricanes Harvey and Irma impact employment in September – and how much will employment bounce back in October. Merrill Lynch economists expect the following: We forecast that nonfarm payrolls increased


Australian dollar rallies as Trump tax reform revealed

DXY was firm last night: AUD was strong against DMs: And EMs: Gold was stable: Brent too: Base metals fell: Big miners roared again: EM stocks fell: High yield yawned: The US curve flattened again: European yields fell: Stocks held on: There are two things going on here. First, there is little China relief rally


More record highs for global stocks as ASX black hole expands

DXY roared Friday night and the future is up: AUD crashed but rebounded on news that Jerome Powell is now Fed favourite. EUR is weak as Catalonia disintegrates: Against EMs, AUD was mixed: AUD speculative longs eased 5k last week but remain hilariously, wonderfully long at 57k: Gold held on: Brent broke out. WTI is


All the way with the USA, Australian dollar smashed

DXY has delivered on the promise of its bullish inverse head and shoulders chart. We’re off and running now: AUD was pounded power against USD but rose against an even more weak EUR: EMs were even weaker than AUD: Gold is verging on break down: Brent is powering on: Base metals still smokin’ the crack:


US senate passes budget in tax reform boost

Via The Guardian: The Senate has approved a multi-trillion dollar budget that Donald Trump has called a “first step towards massive tax cuts”, a largely symbolic move that sets the stage for Republicans to rewrite the US tax code without a single Democratic vote. The Senate voted 51-49 to pass the budget resolution, a blueprint


Captain Glenn turns doomsayer on global inflation

Via Captain Glenn in his new role as hedge fund seer: Former Reserve Bank of Australia governor Glenn Stevens says global investors have become complacent about the risks of a sharp rise in inflation that would have “considerable implications” for financial markets. An unexpected pick-up in inflation measures could see “markets flip from their current


New record highs for stocks

DXY launched last night then lost the lot. The chart remains bullish: AUD was weak against DM: But strong against EM: Gold was soft: Brent was firm on US hurricane outages and OPEC output cut extension talk (a certainty): Base metals were mixed: Big miners were crushed by Xi Jinping: EM stocks rebounded: High yield


Who is the new Fed chair?

BofAML on the contest of contests: Contestant #1: Kevin Warsh Kevin Warsh is a lawyer by trade, who is currently a distinguished visiting fellow at the Hoover Institution and lecturer at Stanford. He was a Fed Governor from 2006 to 2011, which was the heart of the financial crisis. Prior to the Fed, he worked