Eurodollar University

Here comes Chinese central bank bond buying, but this is no QE. A report surfaced in China Daily strongly implying the Chinese government is beyond just exploring something called money-financed fiscal expansion. We'll go over what that is, how it is different from QE, and what the real takeaway is.  Eurodollar University's Money & Macro Analysis China Daily Unconventional monetary steps eyed...

Canada's official unemployment rate jumped in November, reaching its highest level since 2016 (outside 2020). And that was only the beginning. Given how highly synchronized US Treasury rates are with Canadian government bonds, not to mention the Fed and the Bank of Canada, we expect a lot of similarities in the real economy. This one is getting to be uncomfortably close.  Eurodollar University's M...

China's top government body, the politburo, attempted to reignite the "stimulus" sentiment with another wordy communication chock full of more promises and platitudes. To begin with, this doesn't bode very well for the "bazooka." Global market reaction wasn't what Beijing was looking for, either. Even stocks and Economists.  Eurodollar University's Money & Macro Analysis Webinar w/Jim Rickards...

The BLS labor data had a chance to show that October's weakness really was just a combination of one-off factors, instead did everything to confirm that it wasn't those at all. That includes the headline payroll number, too. Unemployment is up and, when you properly account for everyone, up A LOT. Just like Canada. Eurodollar University's conversation w/Steve Van Metre sign up for the webinar here...

Wild week for a market that's supposed to be boring and go unnoticed. For the second straight month, heavy buying in bills right ahead of the payroll report. Except, in this case, buyers went utterly crazy for the 8-week bill in one of the most incredible bill auctions. But what is all this mess about? Yen, securities lending, and recession.  Eurodollar University's Money & Macro Analysis WEBI...

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Recessions are a process and what past episodes all have in common is one key ingredient. Rather, one element that comes up missing every time. This critical factor doesn't just end up being the difference between downturn and full-blown contraction, it also turns a recession into a depression. And we've got the data for it plus how 2024 fits into the pattern.  Eurodollar University's Money &...

The Christmas shopping season is off to a poor start, with dim results coming in from various sources showing lower traffic and slower spending. The reason is easy enough to identify, starting with the latest labor report from the government. Hiring fell sharply before summer and never came back, all of that leading up to the holidays. Eurodollar University's Money & Macro Analysis WEBINAR DEC...

After a weekend of disappointing macro data (which was characterized as "mixed"), China's markets tanked. Not stocks, of course, instead more record lows in bonds plus a very sharp drop in CNY. As we know only too well, CNY DOWN = BAD and yuan is right back near multi-year lows. It's not the only one, either.  Eurodollar University's Money & Macro Analysis WEBINAR DEC 11 w/Jim Rickards Sign up...

European banks have added a massive amount of government bonds to their holdings. At the same time, they refuse to lend into the real economy. Europe's depositories are hardly alone as we see the same defensive behavior all over the global system. There is only one reason why they all have become so incredibly defensive.  Eurodollar University's conversation w/Steve Van Metre WEBINAR DEC 11 w/Jim...

India's RBI just recently has gone *massively* short the US dollar and in the NDF market, too, just to keep the crumbling rupee from sinking even more. This won't work exposing the central bank to losses and also potentially amplifying the downdraft in the currency. A big update on the fundamentals explains. Eurodollar University's Money & Macro Analysis Bloomberg India Plows Into NDF Market a...

An entire batch of corporate reports from retailers to computer-makers, just in time for the key holiday season's critical moment. Each one warning that consumers in the US just aren't there, being held back. Why? The government also reported today with the answer to that question, the one factor that ties it all together.  Eurodollar University's Money & Macro Analysis Bloomberg Inflation-Bat...

Japan's yen has diverged from other currencies over the past few weeks, strengthening against the dollar. That suggests more carry trading dynamics, an interplay between different versions of them. Yes, there is more than one carry trade and understanding the distinctions is key to getting a sense of possible vulnerabilities here. Eurodollar University's Money & Macro Analysis WEBINAR DEC 11 w...

Several critical financial measures continue to drop, reaching rather obscene comparisons. At first, that doesn't seem to make any sense; how would today be seen as similar to February 2009, for example. However difficult the economy is now, it certainly isn't that bad. What these measures are indicating go beyond specific moments, instead providing clues about a progression.  Eurodollar Universit...

Is the bond selloff over? What caused it in the first place? With European rates, in particular, heading lower on recession (more than) risks, the tendency of Treasuries to converge with them raises the chances yields may not have much farther to go if they aren't topped out already. Given the fundamental background, it appears to be a matter of time more than anything.  Eurodollar University's co...

The European situation is getting to be truly serious. And that means growing problems for...the dollar. Not the exchange value against other currencies, rather why that exchange value is rising and how trouble in Europe means trouble in global money. European banks have been back in a big way at the black hole's center.  Eurodollar University's Money & Macro Analysis President Ford Economic R...

China and Japan selling record amounts of Treasuries. Do they hate the dollar? Donald Trump? You and me? Not only will we answer the questions, while those countries saw huge selling of USTs, curiously the Cayman Islands got a truly massive deposit of them and it showed up during July, August and September. Seems very carry trade-y.  Eurodollar University's Money & Macro Analysis https://www.e...

A double whammy on US consumers. First, the government issued an alarming update to the biggest jobs data there is. Then retail giant Target stunned with its Q3 results and more so its guidance for Q4. The thing is, both of those are related; two sides of the macro coin. The one says the summer started really badly, the other it didn't get better.  Eurodollar University's Money & Macro Analysi...

Warren Buffett continues to sell tens of billions worth of stocks. Everyone wants to know why. This divergence between major stock index most likely holds the answer. Normally stock indexes don't mean much beyond their beauty, yet they can be important signals at times like now when they do diverge in such an obvious and sustained way. This is a key cyclical one, too.  Eurodollar University's Mone...

The Federal Reserve reported a sharp rise in delinquencies, especially credit cards and auto loans. That wasn't all, as the New York branches also showed record high rejections strongly indicating where things really stand in the credit cycle. As a result, we have to pay some attention to CRTs, otherwise known as SRTs, the latest financial engineering akin to the 2020s version of credit default sw...

Another retailer finds out the 2021 "recovery" was mostly an illusion. Prices may have soared and revenues looking good, it didn't last because it couldn't. As the company closes hundreds of stores and prepares to lay off an unknown number of workers, more stats show this is no isolated case. The cycle continues and continues to take its toll on businesses and workers alike.  Eurodollar University...

The yen and the euro are good currency indicators of global monetary conditions, but there are a couple even better and more consistent signals. When the 'dollar' goes up and these two are taking the hit because of it, that's when you really need to pay attention. It's not Trump, Jay Powell, interest rates or just random chance.  Eurodollar University's Money & Macro Analysis https://www.eurod...

The dollar index jumped to a more than two-year high leaving everyone to ask why. Some say Trump, others the Fed. They might as well have said it was Burger King (who blames Wendy's). Though the dollar is rising here in the short run, to really understand what's going on you have to consider more than just developments in November 2024. This has been in the works for several years.  Eurodollar Uni...

After Germany's governing coalition collapsed last week, the country's ZEW added more solid evidence about why that was. The ZEW also collapsed into November. That's not just about Germany since the "zoo" is really what the rest of the world looks like from the German perspective. That also has a lot to say about the ongoing Treasury selloff (just like April). Eurodollar University's Money & M...

The economic challenges the incoming Trump administration is facing are far and away greater than those confronted in 2016. From the cyclical standpoint, 2024 has far more in common with 2001. While structurally, there's nothing close to this in generations. Amidst the election euphoria there needs to be sober analysis.  Eurodollar University's Money & Macro Analysis https://www.eurodollar.uni...