October payrolls were exceptionally weak, yet LT rates jump? With more rate cuts from the Fed basically assured, questions swirl around the Treasury selloff having many people wondering if there is a 'Trump trade' going on here. The answers are right there in front of us. Eurodollar University's conversation w/Steve Van Metre https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

This isn't about October or hurricanes. Government just confirmed jobs market is in big f-ing trouble.  Eurodollar University's Money & Macro Analysis BLS Employment Situation October 2024https://www.bls.gov/news.release/archives/empsit_11012024.pdf CNN Messy October jobs report muddied by strikes and storms ahead of Election Day https://www.cnn.com/business/live-news/us-jobs-report-october-11-01-24/index.html https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The government's latest data confirms the dramatic slowdown sweeping across the labor market. We've been documenting hours being cut, quitters quitting quits, no one hiring, and now even a few layoffs. Not only do the latest figures back all that up, they also help explain consumer behavior and even the last GDP estimate.  Eurodollar University's Money & Macro Analysis CNBC Ford guides to low end of 2024 earnings forecast as it slightly tops Wall Street’s third-quarter...

Another seemingly solid US GDP report for the books thanks in large part to a huge allotment of missiles. Does this mean the soft landing has been achieved?  Even if it has been achieved, we wouldn't know it from GDP data. Instead, history shows cyclical changes all look decent just before them. The latest quarterly data is not just comparable, it is, surprisingly, worse than every other period entering recession. Eurodollar University's Money & Macro...

Repo fails make sense being an indicator of collateral difficulties. Same for the 4-week US Treasury bill rate when it falls substantially. But how does Japanese government bill yields fit into the US$ repo picture? And why are they such a solid fit for it? The answer lies in the carry trade and what it means for funding markets as well as US recession risks.  Eurodollar University's Money & Macro Analysis Bloomberg Mizuho Buys ‘Safe’ Assets on Risk That US Soft Landing...

Some unexpected bad news out of South Korea has implications for AI and a lot more. The investment boom triggered by ChatGPT has been a critical support for especially the Asian economy. Now there are signs it is cooling off along with a further setback in autos. Inopportune timing, to say the least.   Eurodollar University's conversation w/Steve Van Metre Bloomberg South Korea’s Economy Ekes Out Growth as BOK Assesses...

Gold continues to soar to record highs, but why? Most will say inflation though bullion is actually a terrible inflation hedge. The reason why many people believe this is the one time during the Great Inflation. Gold's run in the seventies was instead about what happened in the sixties long before the inflation. And it's the same thing - the other end of it - that we're seeing today.  Eurodollar University's Money & Macro Analysis FRB Boston Bretton Woods Conference...

A lot of people are asking if the Fed now regrets cutting rates by 50 bps in September, or maybe cutting at all. Recent data make it seem as though the soft landing never went anywhere, plus what appears to be happening with market interest rates. In truth, every part of this Fed "regret" trend is wrong, starting with the view from the central bank itself.  Eurodollar University's Money & Macro Analysis Federal Reserve Beige...

Another central bank moves up its rate cut plans, accelerating its rate reductions with a 50-bps cut. At the same time the IMF lowers growth projections and warns risks of more downside are rising. These two developments are related to the same thing. It's becoming clearer where this weakness is coming from and that's why the public sector is starting to become more aggressive.  Eurodollar University's Money & Macro Analysis Bank of Canada October 2024 Monetary Policy...

Huge thanks to Eric Basmajian and train-traveler Mike Green for answering member questions. Member/Subscriber Live Q&A recorded October 22, 2024.

We are seeing the full effects of the debt crisis paradox. And it only seems like a "paradox" from hte perspective of conventional wisdom on the matter. Government debt is indeed bad for the economy, but not AT ALL in the way most people are led to believe or assume. This creates another paradox, one where that mainstream criticism does a lot to discredit all criticism thereby making even more debt likely.   Eurodollar University's Money & Macro Analysis Milton Friedman Newsweek February...

Does the Bank of Canada need to exist? Canada shares a lot more than just a common border with the US, interest rates, inflation, even changes in economic output. And those are all pointing in the wrong direction. The Canadian experience provides a perfect example of what globally synchronized really means in all its facets.  Eurodollar University's conversation w/Steve Van Metre https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

This may end up being the final straw for what's left of the global economy. With more highly negative signals from copper, gold, oil and swaps, even bond spreads here, we're getting more impressions that the part rolling recession is now rolling right on into the full thing. If this one goes, that's usually it.  Eurodollar University's Money & Macro Analysis Bloomberg Carmaker Misery Is Dragging Down Global Credit Market...

A whopping 98% of American voters in one mainstream poll say the economy is a major concern, including 79% who rate it their top worry. Economists, the media, politicians, policymakers are at a loss to explain this. The latest data from the US government shows why that is, both the confusion and the underlying trouble. A vast majority of the evidence continues to consistently agree with what Americans are saying. Eurodollar University's Money & Macro Analysis NRF Census Retail Sales Data...

Wall Street was rocked by a huge plunge in orders for ASML, a company which produces machines that touch practically every part of the global economy. That was followed by another four-letter firm, LVMH, which reported a shock decline in revenue. Both showing the same thing from very different angles, further confirming - along with swap markets - why there will be another leg down in interest rates. Eurodollar University's Money & Macro Analysis ASML Homehttps://www.asml.com/en ASML Q4...

We are in the thick of bank earnings and quarterly reports. The one theme they keep coming back to is...losses. It's become such a problem even JPM CEO Jamie Dimon snapped during his last earnings call. The thing is, in spouting off he told the truth about all of it.  Eurodollar University's Money & Macro Analysis Bloomberg Jamie Dimon Is Right. Forget the ‘Damn...

Another update from top Chinese officials on the status of "stimulus" comes amidst a flurry of macro and banking data from the country. While many will claim the former cancels out the increasingly grim nature of the latter, the previous data still matters at the very least to describe the size of the hole China will have to climb out of. Assuming it is even making a reasonable attempt to. That last press gathering provided few assurances.  Eurodollar University's Money & Macro...

A big jump in jobless claims actually muddies the picture for the labor market. Meanwhile, consumer prices that many in the mainstream are claiming as sticky...are. But not for the reasons stated. We're seeing "sticky" prices in the technical sense, and that's not good.  Eurodollar University's conversation w/Steve Van Metre  Bloomberg Odd Lots Austan Goolsbee Explains the Fed’s Big Rate...

The world’s major growth engine the past few years is showing more and worsening signs of finally cracking, including its currency hitting a record low just today. I’m not talking about the US, obviously, nor is it sickly China. India. If India has stumbled, too, as the rupee suggests, then there might be no escaping globally synchronized.  Eurodollar University's Money & Macro Analysis Bloomberg India’s Industrial Output Declines For First Time in Two...

There is a story brewing in repo. Fails have broken a long run trend and they did it in early August. Latest data from FRBNY says that's still the case. It fits with a bunch of other data as well as brings up the ongoing unwind in the real yen carry trade. Finally, behind all of it is US recession fears driving fails, collateral, Japan's withdrawal, and more. And you don't have to take my word for it; hear it (or read it) straight from a carry trader himself.  Eurodollar University's Money...

While everyone - especially in Chinese and China-related stocks - get caught up in last month's "stimulus" frenzy, the overlooked the only real news that came out of it. Very quietly, the country's top bank regulator just casually mentioned the government was gathering a trillion yuan to "recapitalize" China's biggest six banks. Yeah. Meanwhile, volatility has hit the previously insane equity surge.  Eurodollar University's Money & Macro Analysis ***Eurodollar University's Fall...

Another recession warning and this one is related to brewing problems with unemployment. The September payroll report has put mainstream focus back on a soft- or no-landing scenario, but we've been there before not long ago. Meanwhile, apart from the unreliable payroll figure everything else continues to point to bigger trouble, including Americans who have stopped using their credit cards.  Eurodollar University's Money & Macro Analysis ***EURODOLLAR UNIVERSITY FALL SALE***Subscriptions...

US economic weakness continues to show up outside the country as much as inside (last payroll estimate notwithstanding). Japan's government leading indicator just tanked, lowest value since 2020 and pointing to growing trouble in Japan. Same from Mexico and even according to one by JP Morgan.  Eurodollar University's Money & Macro Analysis Bloomberg Ueda Hints at Dovishness After New Prime Minister Urges...

September's payroll estimate soared WAY above expectations. Is it a Fed miracle? This isn't the first time this has happened; in fact, each of the last two times the FOMC began cutting rates met eerily similar results. Steve and I talk about what those were and why, also why that means everything right now.  Eurodollar University's conversation w/Steve Van Metre ***EURODOLLAR UNIVERSITY FALL SALE***Best subscription prices on the Deep Dive Analysis, Daily Briefing, and EDU...