Episodes
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If you want to watch the full interview check it out at https://www.eurodollar.university
Everyone wants to know the answer to the recession question. So, by very popular demand, Eric Basmajian of EPB Macro Research checks in with Jeff on the unusual state and status of the US business cycle. The whole monumental matter just might come down to houses.
Eurodollar University's Money & Macro Analysis
https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
Government bond yields in China just plunged to more record lows as market agents are growing even more pessimistic. The unquenchable demand for safe and liquid assets has the PBOC getting ready to sell bonds into a marketplace that is increasingly concerned about a lot more than Chinese issues. More strong evidence for globally synchronized.
Eurodollar University's Money & Macro Analysis
Bloomberg Economists Raise China Growth Forecasts as Exports Improve
https://www.bloomberg.com/news/articles/2024-06-25/economists-raise-china-growth-forecasts-as-exports-improveBloomberg El-Erian Says Slowing Economy Raises Fed Policy-Error Risk
https://www.bloomberg.com/news/articles/2024-06-28/el-erian-says-slowing-economy-raises-fed-policy-error-riskBloomberg A $100 Billion Bet on China’s Economy Sours as Warehouses Empty
https://www.bloomberg.com/news/articles/2024-07-01/china-s-third-plenum-and-what-it-means-for-tax-reform-and-supply-chains?srnd=economics-v2https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
Episodes manquant?
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Soft landings and resilient economy supported by strength in labor markets. At least that's the narrative, the truth is completely different. Much of the developed world is being swept up in a wave of rising unemployment. Yes, including the US.;/
Eurodollar University's conversation w/Steve Van Metre
Bank of Canada
https://www.bankofcanada.ca/2024/06/opening-statement-2024-06-05/https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
Another new low for JPY as the Japanese government is shuffling up its top Finance Ministry people. Everyone continues to blame the Fed for the yen's crash but the evidence conclusively shows that's not it. This only raises the question, what is it? The yen's own track record holds the answer and it is one that applies to you.
Eurodollar University's Money & Macro Analysis
Reuters Japan names new FX diplomat as yen hits 38-year low
https://www.reuters.com/markets/asia/japan-appoints-atsushi-mimura-top-fx-diplomat-replacing-masato-kanda-2024-06-28/Reuters Japan warns against rapid FX moves, reiterates readiness for action
https://www.reuters.com/markets/currencies/japan-warns-against-rapid-fx-moves-reiterates-readiness-action-2024-06-24/Bloomberg Yen Falls Through 161 Per Dollar, Putting Intervention in Focus
https://www.bloomberg.com/news/articles/2024-06-28/yen-falls-through-161-per-dollar-as-intervention-wagers-increaseBarrons The Fed’s Higher for Longer Policy Is Breaking the Yen
https://www.barrons.com/articles/fed-yen-b66308afhttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
Retail and Pharmacy giant Walgreens now says there won't be a second half rebound after all, not according to its view of the consumer economy. It was seconded by Levi's and then European behemoth H&M. All of that ties together with a record low in US pending home sales and a summer driving season that's already an enormous bust as recession forces bear down.
Eurodollar University's Money & Macro Analysis
NBCNews Walgreens plans store closures as CEO says consumers 'stunned' by prices
https://www.nbcnews.com/business/business-news/walgreens-plans-store-closures-ceo-says-consumers-stunned-prices-rcna159208CNBC Levi’s shares drop 15% as jeans maker’s sales disappoint despite denim craze
https://www.cnbc.com/2024/06/26/levi-levi-earnings-q2-2024.htmlCNBC H&M plunges 13% on doubts over full-year margin target, June sales outlook
https://www.cnbc.com/2024/06/27/hm-plunges-12point5percent-on-doubts-over-full-year-margin-target-june-sales-outlook.htmlBloomberg US Pending Home Sales Index Slides to Record Low on High Rates
https://www.bloomberg.com/news/articles/2024-06-27/us-pending-home-sales-index-slides-to-record-low-on-high-rateshttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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China's top central banker confirmed last week the intention to radically change the operations of the Peoples' Bank of China. Some have speculated this equates to an imminent QE, but that has nothing to do with the reform. We've seen this before. The issue is bank, not central bank.
Eurodollar University's Money & Macro Analysis
BNP Implications of China's Impaired Transmission Mechanism
https://docfinder.bnpparibas-am.com/api/files/f3e3ee55-9e19-455f-a1a6-08123581e2e9SCMP Xi Jinping to China’s central bank: restart treasury-bond trade, after 2-decade hiatus
https://www.scmp.com/economy/china-economy/article/3256967/xi-jinping-chinas-central-bank-restart-treasury-bond-trade-after-2-decade-hiatusPan Gongsheng's speech at Shanghai
http://www.pbc.gov.cn/en/3688110/3688172/5188125/5379416/index.htmlhttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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There have been a whole bunch of ripples through the monetary system coming in from all angles pointing toward a sizable collateral disruption. The primary culprit(s) appears to be from Europe, starting in bond spreads surging off election uncertainty though we can't discount the ECB's rate cut as a factor. The eurodollar aftershocks are pronounced regardless of origin.
Eurodollar University's Money & Macro Analysis
IOSCO Securities Lending Transactions: Market Development and Implications
https://www.bis.org/cpmi/publ/d32.pdfhttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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Japanese banks have been bulking up on US junk corporate credit for the last year, driven entirely by an increasingly difficult reach for yield. That means overlooking dangers and risks which in other less distorted times would have been taken more seriously. The end result is a large and growing distortion in a key part of the credit markets.
Eurodollar University's Money & Macro Analysis
Bank of Japan Financial System Report October 2019
https://www.boj.or.jp/en/research/brp/fsr/data/fsr191024a.pdfVanEck Looking Beyond AAA Rated CLOs Pays Off
https://www.vaneck.com/us/en/blogs/income-investing/looking-beyond-aaa-rated-clos-pays-off/Deutsche Bank What impact is 'higher for longer' having on the CLO market in 2024
https://flow.db.com/trust-and-agency-services/what-impact-is-higher-for-longer-having-on-the-clo-market-in-2024Bloomberg A $1.3 Trillion Fund Pool for Junk-Rated US Firms Has Unlikely Lifeline: Japan's Banks
https://www.bloomberg.com/news/articles/2023-04-20/the-1-3-trillion-clo-market-grows-more-dependent-on-japan-bankshttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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Copper and aluminum were soaring and so were reflation expectations for the global economy. If the world wasn't too careful, those might even lead to resurgent inflation. What's happening in those and other commodities has shocked market observers. As has the most recent global macro data.
Eurodollar University's conversation w/Steve Van Metre
https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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Another CRE securitized structure is reportedly causing losses for its top tier, this one in another country and from a different corner of the real estate market. This matches recent reports that big banks are quietly beginning to sell their seniors in the space. Moreover, US homebuilder activity has plunged to new lows as the crosscurrents in the economy and financing are getting more unfavorable.
Eurodollar University's Money & Macro Analysis
Bloomberg Pimco Warns of More Regional Bank Failures on Property Pain
https://www.bloomberg.com/news/articles/2024-06-11/pimco-warns-of-more-regional-bank-failures-on-commercial-property-painBloomberg CMBS Buyers Face First Europe AAA Loss Since Credit Crunch
https://www.bloomberg.com/news/articles/2024-06-19/cmbs-buyers-set-for-first-europe-aaa-loss-since-credit-crunchBloomberg Losses Pile Up in Top-Rated Bonds Backed by Commercial Real Estate Debt
https://www.bloomberg.com/news/articles/2024-05-23/cmbs-buyers-suffer-first-loss-on-aaa-debt-since-financial-crisisCREDiQ CRE CLO Distress Rate Widens to 9.74%
https://cred-iq.com/blog/2024/06/14/cre-clo-distress-rate-widens-to-9-74/CREDiQ Loan Modifications Swell 195% in 12 Months
https://cred-iq.com/blog/2024/06/21/loan-modifications-swell-195-in-12-months-cred-iq/https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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The Swiss National Bank surprised Economists by cutting rates for the second time in a row. Citing a number of potential worries starting with more recession, the rate cuts are aligned with growing dollar troubles roiling the rest of the world. Major currencies are sinking fast, hitting new lows and pointing toward the same reasoning just acted on in Switzerland.
Eurodollar University's Money & Macro Analysis
Bloomberg SNB Silence Sets Up Another Rate-Cut Cliffhanger
https://www.bloomberg.com/news/articles/2024-06-19/swiss-national-bank-interest-rate-cuts-central-bank-silence-sets-up-cliffhangerSwitzerland Economic forecast largely unchanged: Swiss growth in 2024 to be below average
https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-101432.htmlSNB Monetary Policy Assessment June 20, 2024
https://www.snb.ch/en/publications/communication/press-releases-restricted/pre_20240620CNBC Switzerland makes second interest rate cut as major economies diverge on monetary policy easing
https://www.cnbc.com/2024/06/20/switzerland-trims-key-interest-rate-to-1point25percent-in-second-cut-of-the-year.htmlhttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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A Japanese bank giant announced it was going to begin selling tens of BILLIONS in USTs and other European government bonds knowing full well the institution is going to take huge losses on the sales. Is this the start of another bank run? Will this kill the Treasury market?
Eurodollar University's Money & Macro Analysis
About Norinchukin Bank
https://www.nochubank.or.jp/en/about/Norinchukin Financial Summary Fiscal Year 2023
https://www.nochubank.or.jp/en/ir/results/pdf/cap_results2023_04_02.pdfBloomberg Echoes of 2009 Crisis Thrust Japanese Bank Norinchukin Back Into Spotlight
https://www.bloomberg.com/news/articles/2024-05-21/japan-s-bank-for-farmers-and-fishermen-returns-to-spotlight-for-overseas-lossesBloomberg Norinchukin Bank to Sell $63 Billion of Sovereign Bonds
https://www.bloomberg.com/news/articles/2024-06-18/norinchukin-bank-to-sell-63-billion-of-bonds-to-stem-lossesBloomberg A $1.3 Trillion Fund Pool for Junk-Rated US Firms Has Unlikely Lifeline: Japan's Banks
https://www.bloomberg.com/news/articles/2023-04-20/the-1-3-trillion-clo-market-grows-more-dependent-on-japan-banksFRBNY Standing Repo Facility Approved Counterparties
https://www.newyorkfed.org/markets/srflist-231201CBO Budget Update June 2024
https://www.cbo.gov/system/files/2024-06/60039-Outlook-2024.pdfhttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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The data continues to pour in showing US consumers have indeed hit the wall. Spending is down according to a variety of sources, including the latest update on retail sales for May. There is also a growing body of evidence indicating there is more weakness to come starting with summer vacations. All this indicates the chances of full-blown recession are rising sharply.
Eurodollar University's Money & Macro Analysis
CNN Evidence is mounting that the American shopper is cutting back
https://edition.cnn.com/2024/06/18/economy/us-retail-sales-may/index.htmlMcKinsey & Company An update on US consumer sentiment: Are consumers on the cusp of a shift?
https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-state-of-the-us-consumerDeloitte Summer Travel Survey 2024
https://www2.deloitte.com/content/dam/insights/articles/us187281_cic_summer-travel/DI_2024-summer-travel.pdfFederal Reserve Beige Book May 29, 2024
https://www.federalreserve.gov/monetarypolicy/files/BeigeBook_20240529.pdfhttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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Housing prices in China plunged in May, accelerating sharply after April's big drop indicating the situation in the real estate market is getting closer to becoming disorderly. There will be fallout across the world should that happen, as there already is across China's economy as the latest data also showed.
Eurodollar University's Money & Macro Analysis
Bloomberg China Real Estate, Production Slide Highlights More Stimulus Needed
https://www.bloomberg.com/news/newsletters/2024-06-17/world-economy-latest-china-property-sector-plunge-needs-more-supportChina's NBS Situation in Real Estate
https://www.stats.gov.cn/sj/zxfb/202406/t20240617_1954711.htmlBloomberg China Steps Up Warning on Relentless Bond-Buying Frenzy
https://www.bloomberg.com/news/articles/2024-06-17/china-steps-up-warnings-on-relentless-bond-buying-frenzyhttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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Consumer confidence has dropped sharply over the past few months as Americans are now more concerned about jobs and incomes than prices. The shift has been so pronounced that even members of the mainstream media are questioning FOMC officials. Hardly strong and resilient, there's rising unemployment and declining confidence mixed with a bevy corporate warnings.
Eurodollar University's conversation w/Steve Van Metre
FRB Chair Jay Powell Press Conference June 12, 2024
https://www.youtube.com/watch?v=YqaxWf7gsQA
Transcript:
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240612.pdfhttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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Conventional 'wisdom' says that when US$ interest rates go down the dollar goes down with them. Yet, it hasn't been uncommon to find Treasury yields falling as the dollar's exchange value jumps. When that has happened, nothing good comes from it. We're starting to see what looks to be that scenario setting up right now.
Eurodollar University's Money & Macro Analysis
https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDUEurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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Eurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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https://event.webinarjam.com/channel/ratesI said the payroll number is wrong and Jay Powell of all people agrees. But if the real question is how wrong, that's where the debate is even though it should already be settled. There is plenty of evidence the US is tilting in the direction of the HH Survey and unemployment rate. And that includes the rates market which ignored the FOMC's hawkish dots.
Eurodollar University's Money & Macro Analysis
Jay Powell's Press Conference
https://www.youtube.com/watch?v=q3ZE5tF_IMUCNBC Quotes from Jay Powell Press Conference
https://www.cnbc.com/2024/06/12/fed-meeting-today-live-updates-on-june-fed-rate-decision.htmlPolitico Biden’s economy: Good metrics, bad vibes, few levers
https://www.politico.com/news/2024/06/07/biden-has-an-economic-story-to-tell-and-yet-00162338Guardian Majority of Americans wrongly believe US is in recession – and most blame Biden
https://www.theguardian.com/us-news/article/2024/may/22/poll-economy-recession-bidenBLS Business Employment Dynamics Summary
https://www.bls.gov/news.release/cewbd.nr0.htmTable 4'
https://www.bls.gov/news.release/cewbd.t04.htmhttps://www.eurodollar.university
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Eurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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https://event.webinarjam.com/channel/ratesWalgreens is the latest Big Name to cut prices because Americans have run out of money. As the company's prices go down, those will add even more to the disinflationary environment; and that's the bad side of smaller price changes. Today's May CPI completely backs up everything we've been seeing.
Eurodollar University's Money & Macro Analysis
Walgreens Walgreens Introduces Summer of Savings
https://www.walgreensbootsalliance.com/news-media/press-releases/2024/walgreens-introduces-summer-savingsQuartz Amazon, Walmart, and Big Retail’s race to cut prices
https://qz.com/target-walmart-amazon-walgreens-price-cuts-consumers-1851507920Bloomberg Big Oil’s Blockbuster $114 Billion Investor Payout Is Most Ever
https://www.bloomberg.com/news/articles/2024-02-07/big-oil-pays-out-record-114-billion-in-share-buybacks-and-dividendshttps://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU -
Last week's ECB rate cut was...odd. Sure, officials had said for months they were going to do it. Yet, the conditions that would have to be met were not. Policymakers went ahead anyway and this past weekend's developments are a big Big Picture reason why.
Eurodollar University's Money & Macro Analysis
Bloomberg Italy’s Tajani Calls for Quick Second ECB Cut After June Move
https://www.bloomberg.com/news/articles/2024-06-05/italy-s-tajani-calls-for-quick-second-ecb-cut-after-june-moveThe Times Back me for low interest rates, Rishi Sunak tells voters
https://www.thetimes.com/uk/politics/article/rishi-sunak-tories-interest-rates-general-election-962mpcmjxAP UK inflation lowest in 3 years. Prime Minister Sunak makes it a focus in election call for July 4
https://apnews.com/article/britain-economy-inflation-interest-rates-090db19af939b9c532da1fb15ab40a0aLeMonde Moody's warns that France's snap election could lower credit rating
https://www.lemonde.fr/en/france/article/2024/06/11/moody-s-warns-that-french-snap-election-could-lower-credit-rating_6674498_7.html#https://www.eurodollar.university
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Eurodollar University's Anniversary Webinar: The Fundamentals of Interest Rates over the Next 12 months.
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https://event.webinarjam.com/channel/ratesConsumer credit has historically been a solid recession signal, particularly how consumers alter their usage of credit cards. Some of that by choice, for many it is the bank's. Either way, when this happens it is more compelling evidence backing the rise in the unemployment rate.
Eurodollar University's Money & Macro Analysis
September 2008 FOMC Transcript
https://www.federalreserve.gov/monetarypolicy/files/FOMC20080916meeting.pdfMarch 2001 FOMC Transcript
https://www.federalreserve.gov/monetarypolicy/files/FOMC20010320meeting.pdfhttps://www.eurodollar.university
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