US Economy

22

Outgoing Fed President warns on Trump tax cut largesse

Don’t make an enemy of Donald Creosote. From CNBC: New York Fed President Bill Dudley painted an unflattering picture for future growth, saying in a speech Thursday that the recently passed tax cuts pose an ominous threat down the road. While he said the reforms that slash corporate taxes and lower rates for many earners

17

Trump to lose sway in Congress

The threat to Donald Trump’s presidency is not necessarily just a legal or literary one (Fire and Fury: great book, tremendous page turner, you gotta believe me). This year could see the rug taken out from under him as he suffers the same legislative malaise and roadblocks that his predecessor had to endure for eight

9

Lackluster wage growth in US jobs

Friday night saw the release of the latest employment stats from the US, the most important event on the economic calendar as it gives the Federal Reserve the clearest insight into the strength of the world’s largest economy, and hence sets its interest rate agenda and thus the direction of USD. Stocks reacted positively to the

7

Fed Minutes show concern over Trump tax cuts

Here are the full minutes of the latest FOMC meeting. The TLDR version is thus, via CNBC: Federal Reserve officials expect reductions in corporate and personal taxes to boost consumer and business spending, though they remain unsure of the impact of the new tax law ….they increased their expectations for 2018 GDP growth from 2.1

42

Trump tax plan to further crush America’s middle-class

Cross-posted from The Conversation: The U.S. middle class has always had a special mystique. It is the heart of the American dream. A decent income and home, doing better than one’s parents, and retiring in comfort are all hallmarks of a middle-class lifestyle. Contrary to what some may think, however, the U.S. has not always

10

The Australian dollar smash of 2018

DXY rebounded firmly Friday night as Trump tax reform is go: Australian dollar pulled back: EM forex took off: AUD CFTC speculative positioning lifted slightly to 41k last week, still moderately long: Gold held: Brent too: US rigs fell a bit last week but a new rush is coming: Base metals soared on growth hopes:

0

BTFD US dip!

DXY firmed overnight: AUD surged on: It demolished EMs: Gold rose: Brent too: And base metals: But big miners fell: And EM stocks: Junk was OK: Treasuries were sold: Bunds too: Stocks fell: Four events of note. US retail sales boomed: Advance estimates of U.S. retail and food services sales for November 2017, adjusted for

0

Boring! New record highs for stocks

DXY is off and running as we await the Fed: Weirdly, so is the AUD! Technical no doubt: It crushed EMs: Even though gold sagged: Brent sagged: Though base metals lifted: Big miners didn’t: Nor did EM stocks and they will keep falling if DXY runs: Junk held on: Treasuries were sold: And bunds: With

1

US jobs report preview

From Goldman: We estimate that nonfarm payrolls increased 225k in November, above consensus of +195k. In addition to a firm pace of underlying job growth, our forecast reflects some additional normalization in hurricane-affected regions, as well as above-trend retail job growth associated with the early Thanksgiving. The arrival of over 200k Puerto Ricans in Florida may

20

NYFed threatens CPImageddon by including asset prices

Via Bloomberg: US financial markets have in the last 20 years experienced three unprecedented booms in asset prices and two busts. During this span, the market value of real and financial assets held by households has increased more than $US70 trillion, an astounding amount on its own, but even more so when one considers the

2

Metals mashed as US dollar surges

DXY took off last night in some delayed response to US tax reform: That bashed AUD back into place: EM forex was mixed: But metals hated it. Gold is verging on breakdown: Brent held up: Base metals broke: Big miners too: And EM stocks: Junk was OK: US yields marched on, curve flattening too: Bunds

4

Trump busts and booms in one night

DXY has soft Friday night: AUD took off with iron ore futures: And against EMs: AUD net longs fell 1k last week to still long 39K: Gold pumped and dumped: Brent rose as US rigs added only three last week: Base metals firmed: Big miners just can’t catch the iron ore updraft: EM stocks look

5

US shares boom to new record highs

DXY was strong last night: AUD was soft: And weak against EMs: Gold jumped on another Korean missile. Yawn: Brent eased: Base metals were hit: Big miners too: EM stocks firmed: Junk too: Treasury yields climbed and the Australian spread inversion deepened: Bunds are bogged: The MB Fund S&P500 long is partying hard: US data

3

US charges into Trump boom and bust

DXY firmed overnight: AUD fell: And against EMs: Gold was firm: Brent eased: China caught up with base metals: And big miners: And EM stocks: And junk: Treasuries were bid: Bunds too: Stocks held at the highs: The US is booming. Data was strong with the Dallas Fed easing but still elevated and new home

0

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

6

Markets boom as Trump tax cuts rush ahead

DXY firmed overnight: AUD was soft against DMs: And weak against EMs: Gold fell: Brent too: And base metals: Big miners caught a bid: EM stocks took off: Junk snapped back: US yields climbed, the curve flattened: German yields did nothing: Stocks roared: Data was pretty good in the US with strong industrial production, builder

2

Risks to the mighty bull

DXY fell sharply Friday as Trump tax headbutting goes on: AUD was even weaker against DMs as the RBA paralysis sinks in: Against EMs, AUD was mixed: Gold got smacked, oddly: Brent was firm: Despite the jump in US oil production and the rig count from 729 to 738. More to come on that front:

1

Trump tax delays trigger sell-off

I’ve missed this update all week owing to flu. Some interesting stuff is going on. Last night, DXY fell sharply: AUD was stable anyway against DMs : But not as weak as EMs: Gold firmed: Brent too on Saudi tensions: Base metals fell: Big miners were hit: EM stocks eased: Junk bonds fell sharply, especially

15

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

9

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

0

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