The 2y10y spread has flattened over 55 bps since its December 22 peak and is testing August 2016 lows. The yield curve is directly tied to financial sector profitability because it drives net interest margins. So for most of this year, the outlook for financial sector profitability has been deteriorating. Yet at the same time… Continue reading The Yield Curve and Financials
A jump in hawkish rhetoric from around the globe is helping to drive sovereign yield curves flatter. Recent rebounds in economic growth by the likes of the Eurozone are encouraging, however bond markets are seemingly demanding further gains. Fears of higher yields remain ultra-low as evidenced by swaption volatility refusing to budge across the globe. … Continue reading Bond Markets Continue to Disbelieve Central Bank Optimism
Jim Bianco: Let me start by asking a question to Ben, and then let me figure out how to turn my speakers on so that I can hear what you’re saying. Ben, you talked about the last stand in the Phillips curve, and you talked about how Charlie Evans is now starting to say,… Continue reading Q&A From Our June 22, 2017 Conference Call
On June 22, 2017 at 9 AM CT (10 AM ET, 7 AM PT and 15:00 BST) Bianco Research, in conjunction with Arbor Research & Trading, will be hosting a webcast/teleconference moderated by Jim Bianco. Many yield curves across the globe are at their tightest level since 2007. Join us Thursday as we discuss the… Continue reading Webcast Thursday: Understanding The Yield Curve And How It Drives Growth
The Financial Times – Hawkish central bank policy talk puts investors on notice Hawkish central bank policy talk puts investors on notice There will be more market attention than usual this week on the central bank meetings in New Zealand and Norway. Neither is expected to alter their overnight borrowing costs, but the merest signs of… Continue reading Bond Markets Continue to Disbelieve Central Bank Optimism
Houston Chronicle – Falling prices, equipment and labor constraints could slow U.S. drilling surge Producers in more lucrative regions like the Permian Basin in West Texas may only slow the pace of the rig count growth if the market turmoil persists. But drillers there are also running low on rigs with high-horsepower systems that plow larger… Continue reading Assessing the Damage from Crude Oil’s Slide
The New York Times – Karen Handel Wins Georgia Special Election, Fending Off Upstart Democrat Karen Handel, a veteran Republican officeholder, overcame a deluge of liberal money to win a special House election in Georgia on Tuesday, bridging the divide in her party between admirers of President Trump and those made uneasy by his turbulent new… Continue reading Another Polling Error
The Financial Times – Oil slides into bear market as supply angst persists Brent crude is down 20 percent from its most recent high in early January Oil has entered a new bear market, with prices falling to their lowest level this year as rising supplies threaten to derail an effort by some of… Continue reading The Price Of Crude Oil Enters A Bear Market
Bloomberg Business – Fed’s Guidance Has Made Markets More Volatile The central bank says it will raise rates again and reduce its assets. There’s reason to be skeptical. After the financial meltdown of 2008, the lack of transparency within the financial system became clear. Since then, huge efforts have been made by Washington and critics to… Continue reading Will The Fed Follow Through With Its Plans?
The Financial Times – Hawkish central bank policy talk puts investors on notice Shift in low interest rate environment seen as being gradual There will be more market attention than usual this week on the central bank meetings in New Zealand and Norway. Neither is expected to alter their overnight borrowing costs, but the merest signs… Continue reading Hawkish Central Banks
The Financial Times – Martin Wolf: Janet Yellen, and the Fed’s inflation target, should both stay The bipartisan tradition and the 2 per cent target have served the US well The Fed is too enthusiastic about tightening. But should it also raise its inflation target? This is a separate issue, as Martin Sandbu has noted. If… Continue reading Yellen & Inflation Targeting
The Financial Times – Central and eastern Europe show way on growth Unemployment rates in Poland, Czech Republic and Romania are all below the European average and at their all-time low. This is largely the result of growth in economic activity but also of emigration and a limited number of young people entering the labour force. Companies are… Continue reading Growth In Europe