Eurozone

It's All About This Friday's Payrolls: Key Events In The Coming Week

After Friday's Jackson Hole repricing of Fed hike expectations, which made it clear that the fate of a September rate hike is now in the hands of the August payrolls number, the main risk event of the week is therefore this Friday's US NFPs for which consensus expects a reading of 180K, down from last month's 217K print. A number substantially above this will make a September hike virtually certain, and potentially risks roiling markets as good news will likely be bad news this time around.

The Blessing Of Cash (And Why Central Bankers Hate It So Much)

Cash is an unambiguously a blessing to productive workers, savers, and entrepreneurs who wish to protect their hard earned money from the crazed theories and swindling schemes promoted by statists like Rogoff and the central bankers he advises.

'Last Economist Standing' John Taylor Urges "Less Weird Policy" At Jackson Hole

Infamous rules-based economist John Taylor attended the first monetary-policy conference in Jackson Hole in 1982, and he may be the only person to attend both the 1st and the this year's 35th. With Fed policy the easiest (relative to economic fundamentals) every in history, Taylor has one wish for an outcome... "less weird policy"

5 Factors That Could Turn America Into Another Collapsed Empire

Many people have written about poor countries that have fallen apart. But rich nations fall apart, too. In fact, nations are just as likely to unravel after periods of prosperity as after periods of depression. The 2016 presidential campaign appears so bitter precisely because so many Americans worry that the “other” party’s candidate will annihilate the nation.

Madness In Mario-World: European Companies Issue Debt Simply Because The ECB Will Buy That Debt

Things are so absurd in the Eurozone that the ECB is buying private placement debt with little regard for safety. In turn, private equity companies issue debt simply because they know in advance the ECB will buy it. It’s a startling example of how the market is adapting to extremes of monetary policy, and it’s a safe conclusion the experiment will not end well.

US Manufacturing Flashes "Warning Light" As New Orders, Employment Tumble

Following the eurozone's disappointing drift lower in Manufacturing PMI (and weakness in German Services), August's US preliminary manufacturing PMI printed a disasppointing 52.1 (against expectations of 52.6). Weakness in Employment (lowest in 4 months) and New Orders underpin the drop from 52.9 to 52.1 as the 2 month hope-fueled bounce has faded...

Stocks Creep Higher As Dollar Resumes Falling, Oil Slides For Second Day

While the summer doldrums continue, with little market-moving newsflow overnight and zombified volumes, US futures crept higher and European shares rose after EU PMIs printed modestly better than expected, while a return to dollar weakness pushed emerging markets higher, even if it failed to boost oil which as we noted last night was downgraded by Goldman on various fundamental reasons.

Bill Gross Warns "Central Bankers Are Destroying The Engine Of The Real Economy"

In the US the year-on-year trend for productivity has turned negative . Most central bankers dismiss this fact as a short-term aberration. But the Japanese economy provides an example of what interest rates at or near zero can do to a large, developed economy. The answer is not much: not much real growth; not much inflation - and, together, not enough nominal GDP growth to repay historic debt should yields on sovereign debt ever return to normal.

Europe Has Two Options: Revolution Or Elections

European leaders have responded to new challenges in this post-war era with old solutions. Chief among them is the forced integration of Europe into a single political and economic construct. There are two options when an “unelected mafia” has seized control: elections and revolution. The Brits opted for an election. What if Italy, Portugal, and/or the Netherlands do the same, with the same outcome?

Tumbling Dollar Sends USDJPY Under 100, Oil Over $46 As Gold Spikes; Futures Flat

Overnight, John Williams' latest uberdovish paper "Monetary Policy in a Low R-star World", which we profiled yesterday, and which suggests lower rates for far longer, made the rounds and has led to a steep 0.8% drop in the Bloomberg Dollar spot Index, which sank to its weakest since June while the yen strengthened 1.2 percent, slipping briefly below 100 against the greenback for the first time since June 24, pushing oil and gold higher, and Asian shares lower.

"It’s Surreal" - Negative Yielding Debt Rises To Record $13.4 Trillion

“It’s surreal,” said Gregory Peters, senior investment officer at Prudential Fixed Income "Regarding negative yields he added that “It’s clear that central banks are dominating markets. There’s a race to the bottom. Central banks are the main drivers of this, it’s not fundamental."

Portugal Gaining On Italy In The European Banking "Doom Loop"

Portugal’s doom loop metric has soared over the past two years.  Portuguese banks have been gorging on Portuguese sovereign debt, taking it from 7 percent of total assets to 10 percent - the same level as Spain.  If they continuing loading up at this pace, they will reach Italian levels by 2018.

Key Events In The Peak Vacation Season Week

With Wall Street hitting peak vacation season, it is a quiet week for news. The key economic release this week is CPI inflation on Tuesday. There are several scheduled speaking engagements from Fed officials this week. Many will be looking for signs of hawkishness Minutes from the July FOMC meeting will be released on Wednesday.