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Emerging Markets: What Changed

May 04, 2018
(from my colleague Dr. Win Thin) Bank Indonesia is taking measures to stabilize the local bond market.The Philippine central bank is tilting more hawkish.Czech National Bank cut its inflation forecasts.The Turkish government is loosening fiscal policy to drum up popular support.S&P downgraded Turkey to BB- with stable outlook.Argentina officia…
Emerging Markets: What Changed Emerging Markets:  What Changed Reviewed by Marc Chandler on May 04, 2018 Rating: 5
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Look Past Disappointing Jobs Data, Luke

May 04, 2018
The US jobs report was broadly disappointing.  However, the Federal Reserve will look through it and investors should too.   A June hike is still by far the most likely scenario.  
The US created 164k net new jobs in April, and when coupled with the 32k upward revision in March, it was near expectations.  The source of disappointment hourly earning…
Look Past Disappointing Jobs Data, Luke Look Past Disappointing Jobs Data, Luke Reviewed by Marc Chandler on May 04, 2018 Rating: 5
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US Jobs--Not the Driver it Once Was

May 04, 2018
The US dollar fell last month in response to the disappointing non-farm payroll report.  However, in general, the jobs report is not the market mover that it was in the past.  With unemployment is at cyclical lows of 4.1% and poised to fall further.  Weekly jobless claims and continuing claims at or near lows in a generation, though over qualifica…
US Jobs--Not the Driver it Once Was US Jobs--Not the Driver it Once Was Reviewed by Marc Chandler on May 04, 2018 Rating: 5
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Respite to Dollar Short Squeeze

May 03, 2018
The euro bounced after being drilled to support in the $1.1930 area post-FOMC yesterday.  The recovery has not been derailed by a shocking miss on the preliminary April CPI.  Headline CPI slipped to 1.2% from 1.3%, but the more meaningful miss was the slump in the core rate to 0.7% from 1.0%.  Recall that the core rate bottomed at 0.6% three years…
Respite to Dollar Short Squeeze Respite to Dollar Short Squeeze Reviewed by Marc Chandler on May 03, 2018 Rating: 5
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FOMC Sticks to Script, Dollar Pushed Lower

May 02, 2018
The US dollar has fallen in the aftermath of the unsurprising FOMC statement.  The dollar was sold toward session lows against most of the major currencies.  It appeared that expectations a more hawkish statement discouraged position adjustment ahead of the statement.  At the same time, there was little in the statement that suggested that a chang…
FOMC Sticks to Script, Dollar Pushed Lower FOMC Sticks to Script,  Dollar Pushed Lower Reviewed by Marc Chandler on May 02, 2018 Rating: 5
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Build It and They Will Come; Sell it and It will be Bought

May 02, 2018
The US is undertaking a great experiment.  What happens when a large serving of fiscal stimulus is provided to an economy that as already growing above trend, with nearly full employment and price pressures near target? 
Judging from the recent string of data, including Q1 GDP, the effects of the tax cuts are not yet evident.  Yet, today's refu…
Build It and They Will Come; Sell it and It will be Bought Build It and They Will Come; Sell it and It will be Bought Reviewed by Marc Chandler on May 02, 2018 Rating: 5
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Confident Fed Key to New Found Respect for the Dollar

May 02, 2018
There is a brief respite in the powerful short squeeze that has fueled the dollar's dramatic recovery. The greenback which was nearly friendless a month ago now has many suitors.  It is higher on the year against all the major currencies but the yen (~2.6%), the Norwegian krone (~1.6%) and sterling  ~0.9%).  It is virtually flat against the eu…
Confident Fed Key to New Found Respect for the Dollar Confident Fed Key to New Found Respect for the Dollar Reviewed by Marc Chandler on May 02, 2018 Rating: 5
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Fed's Hawkish Hold

May 01, 2018
The Federal Reserve is most unlikely to raise interest rates tomorrow, but its statement should leave little doubt of the trajectory of rates over the next six months.  The market has fully discounted two more hikes this year and has begun pricing in a third hike too.  As of the end of April, the January 2019 Fed funds futures contract has about 2…
Fed's Hawkish Hold Fed's Hawkish Hold Reviewed by Marc Chandler on May 01, 2018 Rating: 5
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Little Help on May Day

May 01, 2018
Most of the world's financial centers are closed for the May Day holiday, but the lack of participation has not prevented the extension of the US dollar's recovery.  The Dollar Index has traded above its 200-day moving average for the first time in a year.  No new catalyst has emerged.  The widening interest rate differential in the dollar…
Little Help on May Day Little Help on May Day Reviewed by Marc Chandler on May 01, 2018 Rating: 5
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