Markets
Fed Policy/Word Counts
May 30, 2018
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Markets
Peripheral Central Bank Uncertainty
May 30, 2018
The top panel in the chart below shows news trends of “uncertainty” for each central bank. We calculate percentiles of news trends, meaning higher toward 100% implies greater uncertainty. The bottom panel shows the average percentile...
Markets
Does Italy Pose A Contagion Risk?
May 30, 2018
In a March 4 Italian election, the anti-establishment/Euroskeptic parties did well. Two of them, Five Star and the League attempted to form a government and name Giuseppe Conte as the new Prime Minister. Over the weekend Italy’s...
Markets
Latin America Attractive, Other EM Troubled by Rising U.S. Dollar and...
May 10, 2018
Emerging markets are being rattled by a rising U.S. dollar and end to global synchronized growth. Equities in East Asia and Europe appear susceptible to further drawdowns. On the flip side, South American economic growth remains mostly rosy, favoring...
Markets
Rising Uncertainty, Not Yet Priced in by Markets or Fed
May 8, 2018
An end to global synchronized growth poses risks for lop-sided short positioning in long-end U.S. Treasuries. The Federal Reserve and markets are pricing in very little uncertainty, but news trends indicate uncertainty over central bank policies are...
Markets
Argentina Delivers Another Blow to Emerging Market Debt
May 4, 2018
Distress in Argentina is the latest issue dragging down emerging market performance in Latin America. Resilient economic growth and stable ETF flows may help some LatAm sovereigns outperform.
Markets
Concerted Global Growth is Over, Now What?!
April 25, 2018
We are not getting excited about U.S. 10-year yields hitting 3.0%. Slowing economic growth will likely keep sovereign yields from racing higher, even if inflation begins to percolate. Concerted global economic growth has ended with data changes...
Currencies
Dollar Strength Trips Up Emerging Market Carry Trades
April 25, 2018
Dollar strength and rising Treasury yields are pressuring emerging market currencies tied to the carry trade. A unique advantage amid rising China / U.S. trade tensions and superior regional growth favor Brazil and Latin American over southeast Asian...
Economy
“Concerted Global Growth” a Thing of the Past?
April 13, 2018
Concerted economic growth is threatening to end with data misses now a global concern. We have a line in the sand at 60% of economies growing above one-year averages. A drop below (currently 67%) would sustain higher volatility and produce larger...
Markets
Corporate Buyers Returning as Treasury Yields Stabilize
April 12, 2018
Stable Treasury yields and improving risk appetite have seen U.S. credit investors begin to boost exposure again.
Economy
Have Surveys Become False Prophets?
April 10, 2018
Financial markets are unfortunately suffering from a circular reference due to group-think and herd mentality. We use the information and ideas from 'the group' as a heuristic to form our own opinions. The world has become exponentially more...
Central Banks
Inflation > Financial Stability, Fed Won’t So Quickly Respond to...
April 5, 2018
Powell and gang are expected to have muted responses to financial market turmoil, unlike their recent brethren. The rise of inflation as the Federal Reserve's main focus over financial stability is a very important development, implying the 'Fed put'...