Two members of the Monetary Policy Committee, the Bank of England’s interest rate-setting committee, voted to raise interest rates by 25 basis points in August, the minutes released yesterday showed. Market participants were taken by surprise. They have been conditioned … Continued
At hedgopia, we try to be as objective as possible. Currently, this blogger is bearish insofar as U.S. equities and economy are concerned. Nevertheless, as someone famously said, “When the facts change, I change my mind. What would you do, … Continued
What is going on in the jobs market the past several months is reviving hopes that better days are ahead. There is a lot we can point to in order to validate how anemic the recovery has been post-Great Recession. … Continued
Non-commercials further added to net shorts in euro futures. They are now net short 129k contracts – a two-year high. In recent weeks these large speculators have been adding more shorts than cutting longs. Since early June, they cut longs … Continued
There is a lot of chatter these days around imminent asset purchases by the ECB. Speaking to the press post-Governing Council meeting yesterday, ECB President Mario Draghi hinted as much, saying policy makers are unanimous in their willingness to use … Continued
There is probably no other price as important as the price of money – that is, interest rates. They are what grease the wheels of an economy. Simplistically, when rates are high, people are incentivized to save more. When they … Continued
The Institute for Supply Management’s monthly survey of economic activity in the U.S. manufacturing sector is one of the reliable indicators economists/market participants focus on. As with any other data point, it tends to correlate with other data points. The … Continued
In many ways, this cycle has been like none other. Equities continue to grind higher. Multiples (valuation) continue to expand. The Fed continues to provide support – both monetary and verbal. Equity bulls continue to throw the caution flag out … Continued
In discussing the dynamics behind the U.S. bond market early this week, an important variable got left out. The chart below plots the budget situation of the U.S. government against issuance by the Treasury of notes and bonds. This gives … Continued
As 2014 began, growth expectations were very high for the U.S. economy. In fact, every year since the recession ended mid-2009, economists’ GDP forecasts have been on the optimistic side, only to be progressively cut back as the year progresses. … Continued