Economy

South Korea and Japan are the top two source nations for Chinese imports respectively, and generally they export the same kinds of manufactured goods. With the expected explosion in demand from China’s reopening, both countries stand poised for a trade windfall. However, we could see…

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Things in Atlanta are Dropping Like a Stone January 25, 2023

Posted by Steven Vannelli, CFA in Economy

The Atlanta Fed Flexible CPI is a price series developed by the Atlanta Fed to capture the price of items that change the most frequently. This price series is supposed to be more responsive to real-time changes in the economy than the CPI, so generally,…

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US PMIs Show the Fed Walking a Fine Line January 25, 2023

Posted by Brian Clark in Economy

The US Purchasing Managers Composite Index (PMI) increased in January to 46.6 from 45 in December, representing a slowing economy but slightly less pessimistic than expected and better than the month before. As a preliminary release for January, this US PMI report gives investors the…

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Common and Unique Threads of European Inflation January 20, 2023

Posted by Austin Mann in Economy

We got consumer price reports for many European countries this week. The main story for the Eurozone is still one of sticky inflation driven by elevated food and fuel prices, though there are some differences emerging among the major European economies. In this analysis we…

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Are Home Buyers Back in the Game? January 20, 2023

Posted by Brian Clark in Economy

With mortgage rates down, mortgage applications for purchase surged last week, indicating some renewed enthusiasm from potential home buyers. Additionally, the NAHB’s survey of home builders showed what could be a bottom in negative sentiment or at least a reprieve from a terrible 2022. Friday’s…

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China’s Reopening Trade is On January 18, 2023

Posted by Tom Nemechek in Economy

In an abrupt volte-face, on December 7, 2022, China announced an end to its “Zero-COVID” policy after the country endured almost three years of damaging lockdowns. This began a flurry of speculation on the impact that China’s reopening would have on the world economy. Central…

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Obituary: Yield Curve Control January 13, 2023

Posted by Tom Nemechek in Economy

Overnight, traders pressed the Bank of Japan again on its Yield Curve Control (YCC). Japanese Government Bonds (JGBs) traded up to 55bps, exceeding the 50bps YCC. This prompted the Bank of Japan (BoJ) to intervene and hammer the rate back down to 50bps. At the…

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December CPI Report Makes Next Fed Moves More Uncertain January 12, 2023

Posted by Brian Clark in Economy

The December U.S. Bureau of Labor Statistics’ Consumer Price Index came in exactly as expected according to Bloomberg’s survey of economists. Headline CPI came in at -0.1% month over month and 6.5% year over year, and Core (CPI Ex Food and Energy) came in at…

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Balmy European Winter Helps Industrial Production January 10, 2023

Posted by Austin Mann in Economy

With winter not fully upon us, European industrial production has benefitted from lower energy prices. The mild weather has led economists to predict less dire economic scenarios, where recession fears have receded. November’s industrial production highlights the economic benefit realized from this winter’s mild weather….

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A Goldilocks Job Report January 09, 2023

Posted by Steven Vannelli, CFA in Economy, Markets

As the market continues to rally on Monday, we can’t help but ask ourselves what data nugget might we have missed from last Friday’s data? Let’s start with the more difficult data: the employment report. On the surface, the report showed a gain of 223,000…

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Inversion December 20, 2022

Posted by Steven Vannelli, CFA in Economy, Markets

In a recent San Francisco Federal Reserve Publication titled “Monetary Policy Stance is Tighter Than Fed Funds Rate,” the authors argue that the “all in” policy rate is actually higher than the Fed Funds rate would suggest. They open: “The Federal Reserve’s use of forward…

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That Was a Strong Jobs Report? December 06, 2022

Posted by Steven Vannelli, CFA in Economy

While many seemed to focus on the basics of the employment report like average hourly earnings (which don’t take into consideration industry mix shifts among the employed) and the payroll job beat for the month, there is one very important variable that revealed the weakness…

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