Macro Hive
Key Events G10 In the US, there is… NFP – Friday. I agree with the consensus though the number will be difficult to interpret because of the impact of hurricanes. PCE, personal spending and income – Thursday. We expect core PCE MoM at 24bp. I will be focusing on the low savings rate as it […]
Dominique Dwor-Frecaut
Summary Unemployment has been increasing for the past 1.5 years, triggering Sahm’s rule. But Sahm’s rule is more a statistical regularity than a predictive model of recession. With other labour market indicators and aggregate demand data pointing at expansion, the US economy is not headed for recession. Market Implications We are short 10Y and 30Y […]
Antonio Del Favero
Summary US monetary policy (MP) does not look that restrictive, and financial conditions (FCs) are supporting labour market and economic growth. While the mistakes of the great inflation have been avoided, core inflation will struggle to return to target. The Fed and markets are still too optimistic about cuts. The election outcome could just mean […]
Dominique Dwor-Frecaut
Summary A bottom-up assessment of monetary policy transmission suggests policy fine-tuning would be difficult. Residential investment is the demand component most responsive to funding costs but accounts for only 3.5% of GDP. The Fed impacts consumption, which accounts for 70% of GDP, mainly through equity and home prices rather than through funding costs. Non-residential investment […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were down -0.4% over the past week, with equity models up 0.6% WoW, FX models down -0.7% WoW and rates models down -0.6% WoW. Momentum models are down over a […]
Dominique Dwor-Frecaut
Summary NFPs again surprised on the upside by a wide margin. The release details show the labour market tightened in September. This may reflect the end of the 2022-24 immigration surge that allowed for disinflation with strong growth. Ahead, the Fed could start facing the traditional employment vs inflation trade-off. Market Implications I still expect […]
Macro Hive
Key Events G10 In the US, there are two key data releases: CPI and PPI – Thursday and Friday. As always, the Fed will focus on the PCE estimate to be derived from CPI and PPI rather than on CPI. The PCE estimate is unlikely to be large enough to prevent the Fed from cutting […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were down -0.4% over the past week, with equity models down -0.3% WoW, FX models down -0.6% WoW and rates models down -0.1% WoW. Momentum models are down over a […]
Dominique Dwor-Frecaut
Summary US dockworkers in ports accounting for 60% of maritime freight have gone on strike. The impact on growth and inflation is likely to be limited as any deep disruption would likely see the Biden administration intervene. Market Implications I still expect two more 25bp Federal Funds Rate (FFR) cuts in 2024. Dockworkers on Strike […]
Macro Hive
Summary A Republican sweep (red WH and Congress) could result in stagflation and force the Fed to hike. Meanwhile, a Democratic sweep (blue WH and Congress) would likely align with the Fed’s current projections. Market Implications A Trump victory would likely lead to bear steepening in the yield curve, and a stronger USD especially vs […]
Macro Hive
Key Events G10 In the US, there is… NFP – Friday. A repeat of last month’s pattern of moderate NFP with lower unemployment and faster wage growth could signal lower immigration flows and associated tightening of the labour market. PMIs – Tuesday (manufacturing) and Thursday (services). PMIs are more important from a trading than from […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were flat the past week, with equity models up 0.3% WoW, FX models up 0.2% WoW and rates models down -0.5% WoW. Momentum models are down over a three-month time […]
Macro Hive
Key Events G10 In the US, there main data are: PCE, personal income and spending – Friday. No market-moving surprise likely; Powell already told us in the presser he expects 2.7% for core PCE. Personal income and consumption are likely to continue to show robust income growth and consumption underpinned by a low savings rate. […]
Macro Hive
Key Events G10 In the US, the main data points are: Retail sales – Tuesday. With services spending growing faster than goods, retail sales have printed below consumption for the past couple of years. Therefore, the consensus forecast of 0.3% MoM for the retail sales control group is consistent with continued above trend consumption growth. […]
Richard Jones
Summary Momentum models were down 0.1% over the past week, with equity models down 0.1% WoW, FX models down 0.4% WoW and rates models up 0.3% WoW. Momentum models are down in aggregate over a three-month time frame, with rates models the best performing (+0.6%). Market Implications Momentum models remain bearish the USD – our […]
Macro Hive
Key Events G10 In the US, the main data points are: Trump and Harris debate, Tuesday 9pm EST. The debate could bring more clarity on the candidates respective policies. The challenge for President Trump will be to move away from personal attacks on VP Harris and for VP Harris to shore up her credibility on […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were down 0.1% over the past week, with equity models down 0.8% WoW, FX models down 0.1% WoW and rates models up 0.3% WoW. Momentum models are down in aggregate […]
Macro Hive
Key Events G10 In the US, the main data points are: NFP – Friday. If the print shows no marked improvement on July and is below consensus for UE falling to 4.2%, the Fed will likely frontload rate cuts, starting with 50bp in September. JOLTS – Wednesday. The U/V ratio is more important than headline. […]
Richard Jones
When evaluating the performance of our momentum models we are considering the average performance across the one-, three-, and 12-month momentum models. Summary Momentum models were up 0.4% over the past week, with equity models up 0.8% WoW, FX models up 0.5% WoW and rates models down 0.1% WoW. Momentum models are all down over […]
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