Research & News
Daily Comment (October 11, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] [BREAKING: President Trump agreed to a meeting with Chinese leader Xi Jinping to discuss ongoing trade tensions during the G20 Summit. Earlier this week, U.S. officials had warned China that trade discussions would only take place if it provided a detailed list of trade concessions.… Read More »
Daily Comment (October 10, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] U.S. equity futures have weakened on an unexpected jump in core PPI (see below). Here is what we are following: China: There were a few items of interest this morning. First, Treasury Secretary Mnuchin warned China not to use a weaker currency to offset U.S. trade… Read More »
Daily Comment (October 9, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s another risk-off day; we did see U.S. equities recover yesterday into the close but the futures are indicating a lower opening. Here is what we are following: China: There has been speculation that President Trump and Chairman Xi would meet at next month’s G-20 summit,… Read More »
Weekly Geopolitical Report – The Dollar Problem: Part II (October 8, 2018)
by Bill O’Grady Last week, we introduced the characteristics of a reserve currency, including a discussion of the costs and benefits of providing the reserve currency. This week, we will conclude the report with a short explanation of the S.W.I.F.T. network and its importance to international finance. From there, we will discuss the potential competitors to… Read More »
Daily Comment (October 8, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s Monday—financial markets are in clear risk-off mode amid lots of news. It is Columbus Day, a bank holiday, so commercial banks and the Treasury market are closed today. Here is what we are following: China: Chinese markets reopened after a week-long holiday to a significant… Read More »
Asset Allocation Weekly (October 5, 2018)
by Asset Allocation Committee As the unemployment rate declines, there is a worry that wage growth may accelerate and lead to a wage-price spiral, forcing the FOMC to raise rates rapidly. Although possible, the key issue is slack in the labor market. Based on the unemployment rate, there would appear to be little; based on the… Read More »
Daily Comment (October 5, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s employment Friday! We cover the data in detail below, but the short recap is that the payroll data came in well below forecast at 134k vs. estimates of 185k. However, revisions added 87k, so the overall increase in payrolls did exceed estimates. The unemployment rate… Read More »
Daily Comment (October 4, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] It’s a global down day for equities. Rising long-duration interest rates are the most cited culprit. Here is what we are watching today: Rising long-duration yields: Long-duration yields are mostly a function of the policy rate and inflation expectations. Determining the policy rate is a snap. … Read More »
Daily Comment (October 3, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] Risk-on is in the air this morning. Here is what we are watching: Italy: Financial markets are showing some signs of relief this morning following the populist government’s promise to lower fiscal deficits after 2019.[1] This has the look of a common promise made around the… Read More »
Daily Comment (October 2, 2018)
by Bill O’Grady and Thomas Wash [Posted: 9:30 AM EDT] We are seeing a bit of weakness this morning, mostly due to comments coming out of Italy. Here is what we are watching: Italy: The head of the finance committee in the lower house of Italy’s legislature, Claudio Borghi, was quoted as saying that Italy would… Read More »