With the US dollar sliding to a 3 yr low and picking up steam to the downside over the past week, let's go over quickly some of the repercussions that come of this, both good and bad. The obvious good is for those multinationals that aren't FX hedged that get to translate their foreign earnings back to the US and thus boosting the dollars they collect in revenue. The …
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Headline consumer price inflation in December rose .1% m/o/m after a .4% gain in November. That was expected and the y/o/y rise is 2.1%. The core rate was up by .3% m/o/m and that was one tenth above the estimate and the y/o/y gain increased to 1.8% from 1.7%. That core rate matches the highest level since April. Rents remain a key factor in the sticky inflation for …
Credit growth really slowed in China in December as maybe, just maybe the attempts of Chinese authorities are actually working in moderating the breakneck pace of debt accumulation. Total credit extended totaled 1.14T yuan, below the forecast of 1.5T with bank loans coming in about 400b yuan less than expected being the main reason. Also of note, money supply growth …
The 30 year bond auction was solid. The yield of 2.867% was below the when issued of almost 2.89%. The bid to cover of 2.74 is above the 12 month average of 2.30 and the highest since December 2014. Also, direct and indirect bidders took 79% of the auction leaving dealers with the least amount since at least 2006 that I have data for. The one year average is 70% for …
I’ve cited the 2.63% yield of the 10 yr US note as the key level to watch as above that would be the highest since 2014. Both the German 2 yr and 10 yr bund yields are also approaching key levels. Here are the charts of each and what to watch for: GERMAN 2 yr yield (getting less negative) GERMAN 10 yr yield …
December PPI fell .1% m/o/m instead of rising by .2% as expected. The core rate also fell by .1% m/o/m vs the same estimate of up .2%. Both follow gains of .3-.4% in the month prior. The y/o/y rise slowed to 2.6% from 3.1% for the headline figure and the core rate went to 2.3% from 2.4%. Internally and keeping a lid on prices, there was no change in energy prices …
In the context of a wild and messy few days in interest rates, the 10 yr note auction was good. The yield of 2.579% was below the when issued of about 2.585%. The bid to cover of 2.69 was above the one year average of 2.44 and the best since June 2016. Also of note, direct and indirect bidders totaled 78%, above the 12 month average of 71%. Bottom line, a 10 month …
Import prices rose less than expected in December with a one tenth decline m/o/m in prices ex energy and food. They were though up 1.4% y/o/y, benign but around the highest level since 2012. The headline print was up 3% vs the estimate of 3.1% driven by energy. For perspective, the 25 year average in import prices is up 1.2%. Bottom line, thanks to a 10% decline in …
Higher rates again today is the important story. Japanese JGB's were under pressure for a 2nd day with the 10 yr yield up 1.5 bps to just under .09%, the highest since July. The 40 yr yield was also up by 1.5 bps to 1.02%. There was also a rise in yields throughout Asia with Hong Kong, Singapore, South Korea and Australia all seeing around 5 bp gains in 10 …
The 3 yr note auction was pretty good. The yield of 2.08% was about ½ bp below the when issued. The bid to cover of 3.13 was better than the one year average of 2.86 and matches the 2nd best since October 2015. Lastly, direct and indirect bidders took a combined 66% of the auction vs the 12 month average of 63%. Bottom line, the highest 3 yr note yield in 10 years …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.
