US Economy

7

Goldman on the new Fed doves

Via Goldman: We expect the FOMC to officially announce … that balance sheet runoff will begin in October. As the Fed has already communicated extensively about its plan for a gradual and predictable runoff, we expect markets to focus instead on the outlook for the federal funds rate. The key question is whether the committee’s expectations

0

Trump’s Washington agenda moving forward

Via Citi: New laws often take some time to get passed and they require a concerted effort on the part of the Executive and Legislative branches along with corporate support. Thus, despite a positive tone from Secretary Mnuchin and Gary Cohn plus support from the President, recent talk of getting tax “reform” in place may

7

How’s Donald Trump 2.0 treatin’ ya?

Via the FT today: Donald Trump’s debut address to the UN General Assembly on Tuesday morning is expected to set out a nationalistic foreign policy based on “sovereignty” and which pulls back from any vision of America as an overseas nation-builder and singles out North Korea and Iran as “rogue regimes”. A senior White House

2

Is the US economy sinking like its dollar?

DXY rebounded from its free fall Friday night: AUD also dropped its tearaway gains though remains at new highs: It was strong against EM: Gold is near break out but also reversed: Brent was hit as US stocks build: Base metals were dumped as China reversed the yuan rise: Big miners too: EM stocks eased:

15

Fed hikes swept away in hurricanes?

Via Karen Moley: … economists warn the US central bank will have no option to shelve any plans for hiking US interest rates this year to compensate for the hit to US economic activity after Harvey shuttered businesses and made it impossible for people to get to work. Some estimate that Harvey could slice as much as 1.5 percentage points off US GDP

7

Would you invest with Glenn Stevens?

Via the AFR: Former Reserve Bank governor Glenn Stevens has taken on a role as an advisor at Ellerston Capital’s new global macro fund. Mr Stevens, who retired from the central bank one year ago, will take a permanent role on Ellerston Global Macro’s Investment Counsel and will provide insights to the fund’s portfolio managers on

1

Previewing US jobs

by Chris Becker The northern hemisphere summer has ended and with it the most important economic release on the calendar is coming. Tonight’s US monthly non-farm payrolls report will be closely scrutinised and acted upon by risk managers as it sets the gauge for markets for the month to come. Following the stonking GDP print

1

USD driving metals rocket

Morgan Stanley is right today: Since mid-June, commodity price performances have been dominated by a currency trade. So what events could terminate this driver? Currencytrade, mostly: Over the last 8-10 weeks, ithas been increasingly difficult for us to identify the fundamental basis of the general lift in commodity prices (now >15-40% since mid-June). Yes, prices

2

US dollar plunges

DXY continued its swan dive last night: There’s so real support on that chart until around the 87 cents area… The EUR roared: Aussie jumped against USD, fell against EUR: It was not as strong as EMs: Gold confirmed the DXY break: Brent slumped as US petroleum is hammered by Hurricane Harvey: Base metals fell

4

Wrapping Jackson Hole

Via Westpac’s Elliot Clarke: The Jackson Hole Symposium has become a key event in the global economic calendar, having acted as a pivotal point for US monetary policy on a number of occasions. Come 2017, with FOMC Chair Yellen and ECB President Draghi both speaking, market participants again paid close attention. In the event, monetary

5

Are we past the Trump nadir?

DXY rebounded last night: AUD fell against it but rise against EUR: It fell against EMs: Gold held at the highs: Brent held at the lows: Base metals are still rising for no apparent reason: EM stocks took off: High yield too: US yields rose: And European, especially Italy: Stocks soared: Welcome to the Trump

5

Markets firm as Trump sloughs Jacksonian trappings

From WaPo: President Trump outlined a revised vision for the U.S. war in Afghanistan on Monday, pledging to end a strategy of “nation-building” and instead institute a policy aimed more squarely at addressing the terrorist threat that emanates from the region. “I share the American people’s frustration,” he said. “I also share their frustration over

1

A peak inside the Jackson Hole

Via Goldman: The key development in Federal Reserve communication last week was a wide-ranging interview with FRBNY President Dudley. Two quotes in particular stood out to us. First, Dudley suggested that so far he has not changed his “dot”; if things go as planned then he “would be in favor of doing another rate hike

3

Where Trump goes, the USD follows

by Chris Becker Reporting and analysing the demise of the Trump Presidency is not hard work, but it bears well in protecting your portfolio. While a handful of US stocks have benefited since the election, leaving most other markets in limbo, currency-land has been upended as the realisation of a stalemated Congress that cannot enact

0

Trump fires a fall guy, now what?

DXY fell Friday night: AUD was up against DMs: But down against EMs: Gold was up a bit: Brent roared as the US rig count fell: Base metals were mixed: EM stocks firmed: High yield was mixed: Big miners stable: US yield edged up: Not European: Stocks edged down: The White House conflict is over

19

Bannon: US in “economic war” with China

Via The Guardian: White House chief strategist Steve Bannon has given an unusual interview in which he claimed there was no military solution for North Korea, the far right was a “collection of clowns” and the left’s focus on racism would allow him to “crush the Democrats”. Bannon, who has been called the mastermind behind Donald Trump’s nationalist

6

Are US stocks a bubble about to burst?

As said this morning, the Fed hedged dovish minutes today with this: This overall assessment incorporated the staff’s judgment that, since the April assessment, vulnerabilities associated with asset valuation pressures had edged up from notable to elevated, as asset prices remained high or climbed further, risk spreads narrowed, and expected and actual volatility remained muted in

70

Trump isolated as neo-Nazi crisis escalates

From the NYT: President Trump’s main council of top corporate leaders disbanded on Wednesday following the president’s controversial remarks in which he equated white nationalist hate groups with the protesters opposing them. Soon after, the president announced on Twitter that he would end his executive councils, rather than put “pressure” on executives. The quick sequence

3

US wage growth better than it looks?

Via the Fed: The July jobs report from the U.S. Bureau of Labor Statistics brought welcome news on wage growth: Median weekly earnings rose 4.2% on an annual basis, the fastest pace seen since 2007. The underlying story about wage growth may be even better than the headline number suggests, according to updated work by

43

When a Superpower leads with its chin

The memory-free Australian press likes to couch Donald Trump as a random mad man taking America down untrodden paths to disaster. In truth he is something more complex and less easily judged for the dependent ally. Leaders do not spring from holes in the ground. They are their political culture, parties and people manifest. Through

26

The Democratic case for restricting immigration

By Leith van Onselen Left-leaning magazine, Vanity Fair, has published a well-argued article laying the Democratic (left) case for restricting immigration into the United States: With stricter border enforcement, employers would immediately start to feel a reduction of available labor, as is already happening… With the share of low-skill workers becoming smaller, many sorts of

0

US employment on track but wage inflation dormant

by Chris Becker The most important economic event on the calendar came and went on Friday night, the US monthly employment data print, or “nonfarm payroll” or NFP. It was a good print, coming in slightly over expectations, but didn’t fire up stocks nor bonds after the release. Here’s the sticky from the BLS via Calculated Risk:

41

The Mooch is gone as Trump deadlocks the Swamp

by Chris Becker Is the civil war in the White House – bigger than the first one back in 1860 according to Trump – over with the dumping of freshly minted mini-me Anthony Scaramucchi? Was The Mooch sacrificed for the greater good by incoming Chief of Staff John Kelly? Does anyone want to work at

2

US growth rebounds, meets expectations

by Chris Becker Friday night saw the release of the much anticipated second quarter US GDP print with the Bureau of Economic Analysis (BEA) reporting 0.6% growth, or 2.6% annualised. While this was much better than the first quarter, and only slightly below expectations, the so-called acceleration is seasonal and does not represent a new