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Rockefeller Treasury Services, Inc. Analytics | 11 of April
11 April, 2017 15:30

Rockefeller Treasury Services, Inc. Analytics | 11 of April

The yield differential is not the only FX determinant, but it’s a big factor. The US yield is dropping by more than the German yield, and we can suspect that the German yield is influenced by flows out of French paper—and can explode upwards once those elections are over.

Rockefeller Treasury Services, Inc. Analytics | 7 of April
07 April, 2017 15:00

Rockefeller Treasury Services, Inc. Analytics | 7 of April

When the payrolls number is released this morning at 8:30 am ET, we will have the expectations vs. the actual issue, but with two sets of expectations. We also get the usual second thoughts over the details—chiefly the participation rate and average wages. At a guess, discussion of this critical indicator will be cut short by talk about the US airstrike against Syria, which has more questions than answers so far.

Rockefeller Treasury Services, Inc. Analytics | 5 of April
05 April, 2017 16:00

Rockefeller Treasury Services, Inc. Analytics | 5 of April

The FX market continues to tread water, in large part on data coming in lower than expected (PMI’s, auto sales) but the June rate hike still seemingly on the table. The CME FedWatch tool gives the June hike a probability of 58.9%, the same as the day before. And yet the bond gang is not on board. The 10-year yield low yesterday was 2.316%, the lowest in over a month (Feb 27).

Rockefeller Treasury Services, Inc. Analytics | 4 of April
04 April, 2017 16:00

Rockefeller Treasury Services, Inc. Analytics | 4 of April

If the dollar were simply following the 10-year yield, it would be falling. But it’s not. It’s following the 10-year yield differential, and the Bund is falling by more than the note. But the two PMI’s yesterday were both pretty grim and generate an aura of gloom. The dollar may be on borrowed time.

Rockefeller Treasury Services, Inc. Analytics | 3 of April
03 April, 2017 16:00

Rockefeller Treasury Services, Inc. Analytics | 3 of April

The WSJ last week featured a story on “soft” data (consumer sentiment) vs. “hard” data (PMI) and asserts it’s the NY Fed’s weighting of soft data that gets it to 3% in Q1 GDP, while the Atlanta Fed likes the hard stuff and gets only 0.9%, A recent WSJ survey gets 1.9% with a high end of 3.6%.

Rockefeller Treasury Services, Inc. Analytics | 29 of March
29 March, 2017 15:00

Rockefeller Treasury Services, Inc. Analytics | 29 of March

We thought we smelled a dollar recovery on the way but thought it would be due to a reaction against the overreaction to Trump’s many failures. We did get some of that, with talk about tax reform bubbling up to the surface. But we must be watching too much cable TV news, with its emphasis on Russia-related scandals and whether there is a cover-up going on.

Rockefeller Treasury Services, Inc. Analytics | 28 of March
28 March, 2017 16:00

Rockefeller Treasury Services, Inc. Analytics | 28 of March

We think we smell a whiff of recovery of favorable sentiment toward the Trump reflation trade. The bond gang has yet to get on board so this is probably little more than the usual Tuesday pullback, but you never know. For one thing, the Atlanta Fed may have a Q1 forecast of a lousy 1%, but other reputable forecasters have a lot more—like the New York Fed, which sees 3% in its “Nowcast.”The chart is from the Daily Shot.

Rockefeller Treasury Services, Inc. Analytics | 27 of March
27 March, 2017 15:00

Rockefeller Treasury Services, Inc. Analytics | 27 of March

We wrote on Friday “The dollar has a chance to recover from an oversold condition if the market comes to feel that the sell-off was overdone, just as the original build-up had been overdone. A more pragmatic outlook on the Trump reflation trade could be dollarfavorable. This doesn’t take away the weight from an insufficiently hawkish Fed, but it would help. It’s not clear that this is going to happen, though.”

Rockefeller Treasury Services, Inc. Analytics | 24 of March
24 March, 2017 16:00

Rockefeller Treasury Services, Inc. Analytics | 24 of March

The dollar has a chance to recover from an oversold condition if the market comes to feel that the sell-off was overdone, just as the original build-up had been overdone. A more pragmatic outlook on the Trump reflation trade could be dollar-favorable. This doesn’t take away the weight from an insufficiently hawkish Fed, but it would help.
It’s not clear that this is going to happen, though.

Rockefeller Treasury Services, Inc. Analytics | 23 of March
23 March, 2017 16:00

Rockefeller Treasury Services, Inc. Analytics | 23 of March

Regional Feds talking about the Fed sticking to the plan for three hikes this year failed to impress, showing a lack of respect for the Fed. To add insult to injury, disbelief comes right after the Fed managed to herd the bond market cats into accepting the March hike.

There is no end to the oil falling
23 March, 2017 16:00

There is no end to the oil falling

Growth of oil reserves in the United States dropped the price of oil once again. For the first time this year Brent crude oil quotations have fallen below the psychological level of $50 per barrel. The agreement between OPEC and other major producers to reduce production could not solve the oversupply problem.

Another oil declining
22 March, 2017 15:00

Another oil declining

Oil prices are continuing to fall after yesterday's collapse to the lowest levels since November of the last year. Another collapse in prices was caused by data from the American petroleum Institute, which have reported about new increase of raw materials reserves in the United States.