Global Economy

Loonie Surges As BOC Keeps Rate Unchanged, Cuts 2016, 2017 GDP, Blames Brexit, Wildfires, Weak Consumption

The Bank of Canada did not surprise moments ago when it kept the overnight rate at 0.5%, as expected The Bank said that the "current stance of monetary policy is still appropriate" adding that risks to inflation profile are roughly balanced. It also said that "fundamentals remain in place for a pickup in growth over the projection horizon, albeit in a climate of heightened uncertainty." Where the BOC did surprise was in its latest cut to Canada's economic outlook: the central bank now expects GDP to grow 1.3% in 2016, 2.2% in 2017, down from 1.7%, 2.3%, respectively.

Full Text Of Bernie Sanders' Endorsement Of Hillary Clinton

I have known Hillary Clinton for 25 years. I remember her as a great first lady who broke precedent in terms of the role that a first lady was supposed to play as she helped lead the fight for universal health care. I served with her in the United States Senate and know her as a fierce advocate for the rights of children.

Frontrunning: July 12

  • Stocks Advance on Stimulus Bets (BBG)
  • Japan to craft stimulus by end-July, may issue construction bonds (Reuters)
  • May ally says Britain to trigger EU divorce 'when we're ready' (Reuters)
  • Last Woman Standing, Theresa May Offers Calm on Brexit Road (BBG)
  • Merkel urges Britain to quickly clarify relationship with EU (Reuters)

"The World Is Walking From Crisis To Crisis" - Why BofA Sees $1,500 Gold And $30 Silver

The world has been walking from crisis to crisis and we see risks that this may not change. The importance of that dynamic for the precious metals is mirrored by the high correlation between potential US GDP growth and gold quotations. Interest  rates globally are set to remain low, which in turn reduces the opportunity costs of holding a non-yielding asset like gold. We believe gold prices could rise to $1,500/oz near-term. We called a bottom in silver in April on supply and demand dynamics; an overshoot of prices to $30/oz is possible.

Why Deutsche Bank Expects A Collapse In Monthly Job Growth To Under 60,000

The current labor/productivity gap implies that over the next 4 quarters, the cumulative slowdown in labor input growth should be 4.5 percent. This implies that aggregate hours (which most recently have been expanding at a 1.6 percent annual rate) would average just 0.5 percent (1.6 – 4.5 / 4). Expressed in terms of new jobs, this means that unless firms cut back on employee hours, monthly job creation would average close to 60K next year, a substantial drop from the 200K average of the past 12 months.

The Great Market Tide Has Now Shifted

Risk-on assets (stocks) rising at the same time as safe-haven assets is akin to dogs marrying cats and living happily ever after. What the heck is going on? Why is the market acting so schizophrenic? What’s changed?

When Narratives Go Bad

There’s a … tiredness … to the status quo Narratives, a Marie Antoinette-ish world weariness that sighs and pouts about those darn peasants all the way to the guillotine.

A Precarious State

The global political/economic state feels precarious for a good reason: it is precarious.

US Futures Rebound After Volatile Session, All Eyes On June Payrolls

In a session where bleary-eyed traders followed the all-night tragic developments out of Dallas and initially sold off risk assets, it is good to see that some normalcy prevailed with the traditional post Europe-open futures ramp, which was further assisted by the successful resolution of the Dallas standoff, which has pushed futures modestly higher ahead of today's main event for markets, the June payrolls report due in under two hours.

Lagarde Flip-Flops Again On Brexit, Warns Of "Disastrous" Trump-Style Protectionism

Ahead of the vote on Brexit, IMF head Christine Lagarde warned of a prolonged period of uncertainty. After the vote, Largarde said Brexit provided the EU a better opportunity for reform. Today Largarde is certain of disastrous consequences if another large county turns protectionist. In doing so, she pointed her finger at Donald Trump.