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Inflation figures, which had been more harmonized than not for decades, all of a sudden they are acting a bit too idiosyncratic for once. That’s actually a red flag warning against inflation. The Treasury market is the farthest out of whack to inflation estimates. US inflation ...
USTs maintain the global lead for outright yields. EUR curve dynamics have decoupled amid EU supply and a steady drumbeat of dovish comments from the ECB to ensure a calm summer. Country CPI data bears upside risks today, but nothing that the ECB wouldn't look through. For f...
The Fed finds itself between a rock and a hard place: either it keeps inflating or the whole confidence-based valuation of financial assets collapses. Either it raises interest rates or the dollar collapses. The lessons from the past have taught us that central bankers only notice a b...
The global economy has reached an important milestone in the second quarter of 2021, surpassing the pre-pandemic real GDP peak attained in the fourth quarter of 2019. After a 3.5% contraction in 2020, global real GDP is projected to increase 6.0% in 2021, its strongest advance since 1...
Next week is filled with Fed speak that could show more policymakers are turning hawkish given the Fed’s overall surprise with pricing pressures this year. Currency markets are bracing for potentially more dollar momentum as the Fed has signaled they are now not willing to tole...
Deutsche Telekom might be a solid investment, but it is most interesting for its past and the lessons we can learn from history. 25 years ago, risk-averse Germans suddenly started buying stocks and in most cases lost a lot of money. This is yet another example demonstrating how mu...
Like a lot of parts of the global economy, housing/wood/material each saw a drop in both supply and demand given last year’s recession. Once beyond the commodity-induced price effects, it becomes clear the economy is settling back into the same disinflationary circumstances or ...
From December 2020 to April 2021, HICP inflation in the eurozone jumped from -0.3% to 1.6%, the fastest acceleration in the history of the series. Energy inflation, partly due to COVID-19-related base effects, has accounted for the bulk of the pick-up, along with other special factors...
Eurozone market rates continue to creep higher, with the German 10yr about to count down to zero. The fact that this is happening as US market rates remain in a deep Fed-induced trance is not a bad thing. Rather it suggests if, or likely when, US market rates awake from their slum...
This year highlights the titanic struggle between the two monsters ruling interest rates markets: carry and volatility. The latter has driven rates over the past few weeks, but the respite could mean a sharper adjustment higher in rates and volatility down the line. There is poten...