Eurodollar University

The global economy has turned a corner, and not in a good (or inflation) way. Widespread ugly data and market positioning strongly suggest the deflationary recession is accelerating to the downside.  Eurodollar University's Money & Macro Analysis HCOB Flash Eurozone PMI https://www.pmi.spglobal.com/Public/Home/PressRelease/6a9a73ef2b4d449eb8a8d9b827cb2070 S&P Global Flash US Composite PMI...

Three more global central banks hiked interest rates despite even more determined recession signals here and abroad. Here we see just why they continue to act as if inflation is the world's biggest threat even though data and markets go completely the other way. Now labor, too.  Conference Board Leading Economic Indicators for June 2023 https://www.conference-board.org/topics/us-leading-indicators...

#China yuan keeps plummeting to new lows as #deflation and #recession collide in growing global #dollar shortage. Yet, Jay Powell tells Congress he's more worried about #inflation even though this key #money signal is one among many against it. A recent paper by Ben Bernanke actually describes the mainstream problem - in the process inadvertently explaining why Powell is so off.  Eurodollar Univer...

Central banks want #interestrates to go up if only to convince you they're fighting #inflation, when #deflation is keeping a lid on those and even pushing some market #yields lower. One that is moving down is a big one worth paying attention to. Contrary to popular perception, low rates are not easy money and conditions. Just ask Ben Bernanke.  Eurodollar University's Money & Macro Analysis Tw...

China's government failed to deliver concrete "stimulus" plans because authorities are conflicted. In the absence of any good ideas for combatting deflationary recession, they'll issue more rate cuts that never work hoping beyond hope something clicks.  Eurodollar University's Money & Macro Analysis SCMP: China’s State Council fans stimulus hopes with economic plan for faltering growth https:/...

#interestrates hikers and #centralbank hawks ignore failed #banks in favor of wages, Phillips Curve, and #inflation expectations. They believe the #economy has gone retro and we're stuck in 1978 when more and more each day looks too much like 2008.  Eurodollar University's weekly conversation w/Steve Van Metre Speech by Governor Christopher J. Waller https://www.federalreserve.gov/newsevents/speec...

Following the alarming data from China, New Zealand confirms it is has succumbed to #recession while Australia's yield curve inverted for first time since 2008. Central banks continue to focus on #inflation because of labor data that is wildly overstating economic strength.  Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.univer...

The #federalreserve is pausing while the ECB is aggressively hiking #interestrates all at the same time the People's Bank of #china is cutting theirs. What is going on with the global #economy? The answer is #recession and #deflation though those haven't yet knocked #inflation down enough for some of these central bankers.  Eurodollar University's Money & Macro Analysis ECB: Monetary policy de...

The #FOMC #federalreserve decided against another #ratehike today, instead choosing not to choose. Some officials insist #inflation is the biggest risk but apparently not enough to act right now. Instead, #recession and #bank problems still weigh enough to force this nonsense of a "hawkish pause" as a temporary compromise.  Eurodollar University's Money & Macro Analysis Bloomberg: There’s More...

#Deflation #recession shows up in both the US #CPI and #China's credit system during the same month. This isn't random coincidence, rather the effects of the global downturn speeding up and taking over more geographic and economic spaces. It's already enough to get Beijing worried, though not yet enough to do the same in DC.  Eurodollar University's Money & Macro Analysis Bloomberg: China Cred...

Are #stocks a useful indicator of #recession? How about #depression? If they were, they can't explain how there wasn't a Great Depression 2 in the late 80s. After all, there were hundreds of #bank failures especially after the Crash of '87. Yet, we remember that period of time fondly as the Great "Moderation", a prolonged age of unrivaled global prosperity. The differences btw the 80s and 30s tell...

Crisis borrowing at the Fed's emergency BTFP surged this week to a new high as #bankingcrisis grows critical. We're seeing more and more signs of serious #creditcrunch which, if it continues like this, won't take long to imperil more markets and the general #economy. #recession   Eurodollar University's weekly conversation w/Steve Van Metre Bloomberg: Ackman-Backed Builder Says 48 Lenders Rejected...

Both producer and consumer prices in #china fell again in the month of May as global #recession continues to hammer the Chinese economy. Though central banks see only #inflation risks, the #deflationary economy is no longer a risk. This one goes a long way toward confirming it.  Eurodollar University's Money & Macro Analysis Bloomberg: China Central Bank Governor Reiterates Stable Policy Stanc...

The global #dollar system is at its weakest point at these specific calendar spots, most susceptible to #collateral problems causing #deflation in #money. With the #bank crisis still raging under the surface, we're going to take a deeper look inside the shadows to see if we can find some answers here. Eurodollar University's Money & Macro Analysis OFR: Why Is So Much Repo Not Centrally Cleared...

Central banks in Australia and Canada ended their short #ratehikes #interestrates pause, ignoring the global #recession risks China just reminded everyone about for their own #inflation biases. History (not to mention markets) caution against prematurely shifting when faced with such a high level of uncertainty.  Eurodollar University's Money & Macro Analysis World Bank Global Economic Prospec...

We can actually see #deflation right now in the form of falling producer prices. Europe reported a record drop in its PPI which has major implications starting with #recession and what this means for #inflation. Declining oil and producer prices today are linked to consumer prices and the economy tomorrow.  Eurodollar University's Money & Macro Analysis Do Producer Prices Lead Consumer Prices?...

Deflation and recession are everywhere. Almost. Of the few holdouts, only some of the US labor data starting with the least serious of the accounts. Apart from it, markets and macro are almost completely in sync. The ambiguity of previous months is melting away in favor of clarity.  Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodolla...

Saudis try for #oilpricehike but #oil runs instead into unmovable #recession. The real #economy continues to weaken which means demand is dominating market factors, not supply. Confirming the oil market's view of the situation, key US services data tumbles.  Eurodollar University's Money & Macro Analysis CNBC: https://www.cnbc.com/2023/06/05/opec-oil-prices-pop-after-saudi-arabia-pledges-produ...

#realestate and property #assetbubble across the world is going bust risking a renewed #bankcrisis plus #recession the US. The situation in #China with developers rather than turning around is causing the government to repeat its failed strategies.  Eurodollar University's Money & Macro Analysis Bloomberg: China Mulls New Property Support Package to Boost Economy https://www.bloomberg.com/news...

Payroll report (CES) shows steady growth in top-line jobs though anything but everywhere else. Hours are being outright cut while employment (CPS) was down big with economic recession ramping up. Even the unemployment rate jumped for once.  Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www.eurodollar.university https://www.marketsinsiderpro....

Inflation pressures are disappearing as deflation and recession conditions continue to take over. The Federal Reserve won't be able to keep up its interest rate stance for very long.  The 5-year TIPS breakeven was once the epitome of the "inflation" panic, swelling to record highs during March 2022's shock crisis. And while the Fed continues to see inflation everywhere, that same market measure ju...

Oil can't catch a sustained bid, too easily falling right back into contango. With the US debt ceiling agreement (in principle), rates markets worldwide can now go back to their regularly scheduled alarms. And they have. European banking data shows why that is as contagion spreads across loan books.  Eurodollar University's Money & Macro Analysis CNBC: Credit Suisse weighs capital hike, possib...

Everyone loves GDP including the government agency which calculates it. Even so, GDI has been a more useful signal for cyclical changes, particularly peaks. Last week's GDP update included the first look at current GDI estimates. These don't leave any room for interpretation or imagination.  Eurodollar University's Money & Macro Analysis Twitter: https://twitter.com/JeffSnider_AIP https://www....

Structural inflation or something else. To mainstream Economists, consumer prices are being driven by structural forces such as demographics, oil production, and, of course, government. As Ronald Coase once said, torture the data long enough and it will confess. Eurodollar University's weekly conversation w/Steve Van Metre Ronald Coase: Volume Title: Economic Research: Retrospect and Prospect, Vol...

Trying to figure out the state of the economy and monetary system by looking backward through consumer price estimates is, well, backward. To understand where we're going, we have to look forward by breaking down the eurodollar details, decoding the data and its signals. Where money is moving...and where it isn't. Shedding some light into the dark eurodollar shadows. Eurodollar University's Money...