Houses in demand

Continued debates and questions about the health of the US consumer. Falling rates revive demand for new one family houses. Since 2013 is the correlation very close between falling long term mortgage rates and demand for new houses. This clearly shows, how rates can directly influence purchasing decisions especially for long-term goods. Fed decision yesterday […]

Market wisdom

Markets are preoccupied by current political turmoil. Brexit, China-US trading, expectations of declining trade globally, short-term resolution to shutdown in US, European vows. The list could be easily extended. Markets have often a subtle way to look through the vail of noise and pick the write route despite all the uncertainty. Two, often overlooked developments, […]

Back to DAX

Worries prevailed in the markets and dragged particularly German stocks lower. Italian budget worries linger on as the confrontation with EU is approaching Italian politicians believe they can play with markets, which backfires German political volatility is unsettling US interest rates at over 3% rattle the markets Flatt yield curve seen as harbinger of the […]

Goldilocks last longer

Rising US yields US 10 year government bond generic yield Source: Bloomberg Steeper yield curve in the US US 3 months vs. 10 years yield curve Source: Bloomberg Better economic numbers ISM Non-Manufacturing Sept 2018 Source: Institute for Supply Management, Bloomberg All this unsettles the equity markets. Too much good. It is easy to argue […]

Deflation is dead, who cares…

About inflation. It appears that the deflation discussion of the yesteryears left such strong marks on the politicians, central bankers and market participants that nobody cares about the current inflation trends. The discussion moved comfortably from “we want to fight deflation” to “we have a very moderate core inflation so….”. Core inflation shall be the […]

Return of the Emerging Markets

Financial markets made up their minds on Emerging Markets. It may not be easy to change the perception. However there are good reasons why the current market rout could be over soon. Unless…there are some possible tweets from President Trump, some more sanctions on any country in the Emerging Markets, NAFTA hitting some roadblock….you can […]

Jobs great for economy

There were numerous views on Friday’s unemployment and jobs numbers. Mostly it was expected that jobs data do not move markets in the current environment unless they will be very bad. Well it appears that most get this part pretty wrong as the bond market and the USD move strongly following the Jobs report. The 2 year yield […]

Europe in danger follow the DAX

There is a constant barrage of news from Europe which is very uninspiring. Brexit unresolved and running into time constrains. Italian government continuously threatening the EU. Again italian government which intends, mostly, to turn its back on austerity and undertake extremely populist measures to hopefully stimulate the economy. Trump and the various threats of tariffs. […]