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Some Thoughts on the US Labor Market

May 02, 2013
The eventful week concludes with the US employment report tomorrow. It comes on the heels of a series of economic reports that were weaker than the consensus expected and points to a loss of momentum in late Q1 that is carrying into Q2. 
Although the weekly initial jobless claims reported today was counter to this pattern, as they recorded new c…
Some Thoughts on the US Labor Market Some Thoughts on the US Labor Market Reviewed by Marc Chandler on May 02, 2013 Rating: 5
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Emerging Markets: What has Changed

May 02, 2013
(from my colleague Ilan Solot)
This is what has changed in the EM space, in our view:
1) Thailand:  Officials are stepping up action and rhetoric against THB appreciation
2) India: We are becoming more optimistic that the INR will finally start to recover
3) Mexico: Banxico is sounding dovish again, but caution is needed in interpreting comments
Emerging Markets: What has Changed Emerging Markets:  What has Changed Reviewed by Marc Chandler on May 02, 2013 Rating: 5
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Draghi Open to Negative Deposit Rate Trumps Rate Cut to Drive Euro Lower

May 02, 2013
ECB President Draghi confirmed the decisions made today to cut the main refi rate by 25 bp to 50 bp and cut the lending rate, the ceiling of its rate corridor, by 50 bp. Most importantly he seemed more open to a cut in the deposit rate and it is this that drove the euro lower after trading choppily initially. 
Draghi emphasized the decline in pric…
Draghi Open to Negative Deposit Rate Trumps Rate Cut to Drive Euro Lower Draghi Open to Negative Deposit Rate Trumps Rate Cut to Drive Euro Lower Reviewed by Marc Chandler on May 02, 2013 Rating: 5
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ECB Day and other Developments

May 02, 2013
The focus is squarely on today's ECB meeting. The euro, Swiss franc and sterling are consolidating the gains that have carried them to multi-week highs against the dollar. Expectations are running high that the ECB delivers a 25 bp rate cut today. 
While we have anticipated a rate cut here in Q2, we think there is substantial risk for disap…
ECB Day and other Developments ECB Day and other Developments Reviewed by Marc Chandler on May 02, 2013 Rating: 5
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No Surprises from the Fed--QE on Course

May 01, 2013
The Federal Reserve delivered as expected. Its economic assessment was little changed, not being swayed one way or the other by most of the high frequency data. It did recognize that inflation has been "running somewhat below" the FOMC's longer-term objective, when adjusted for energy prices. 
The FOMC reiterated that its monthly …
No Surprises from the Fed--QE on Course No Surprises from the Fed--QE on Course Reviewed by Marc Chandler on May 01, 2013 Rating: 5
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Another Look at Who has Been Buying Spanish Debt

May 01, 2013
Spain's 10-year bond yield has fallen 108 bp this year. Just above 4%, the yield is the lowest Q4 2010. The 2-year yield has fallen 93 bp this year. The yield is slipping through 1.70%, for the first time Q2 2010. Recent data suggested that Spanish banks have been the featured buyers of Spanish bonds.

The Spanish government released data …
Another Look at Who has Been Buying Spanish Debt Another Look at Who has Been Buying Spanish Debt Reviewed by Marc Chandler on May 01, 2013 Rating: 5
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Great Graphic: Yen and 10-Year Interest Rate Differential

May 01, 2013
This Great Graphic, we created on Bloomberg, shows the how well the US-Japanese 10-year interest rate differential (yellow line) tracked the dollar's advance against the yen (bar chart) since the Japanese election was announced in mid-Nov last year. 
A divergence opened in April as the US premium fell, but the dollar remained firm.  The situat…
Great Graphic: Yen and 10-Year Interest Rate Differential Great Graphic:  Yen and 10-Year Interest Rate Differential Reviewed by Marc Chandler on May 01, 2013 Rating: 5
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Sterling is King for the Day

May 01, 2013
With most financial centers closed for the May Day celebration, the UK had the stage to largely itself in Europe and opportunity was not wasted. CIPS manufacturing PMI was stronger than expected, rising to 49.8 from an upwardly revised 48.6 in March (initially 48.3). Even though it is the third month below the 50 boom/bust level, it is not only…
Sterling is King for the Day Sterling is King for the Day Reviewed by Marc Chandler on May 01, 2013 Rating: 5
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Great Graphic: Long-Term Chart Gold and the S&P 500 Adjusted for Inflation Great Graphic:  Long-Term Chart  Gold and the S&P 500 Adjusted for Inflation Reviewed by Marc Chandler on May 01, 2013 Rating: 5
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