Monetary Policy

European Stocks, US Futures Rise, Dollar Steady Ahead Of Powell Hearing, Tax Debate

US equity futures in the green ahead of critical Senate debate on US tax reform and a much anticipated testimony from Jerome Powell. European stocks advance, led by oil and gas stocks after Shell fully restored its cash dividend and unveiled a bullish outlook. Asian shares slide despite the reappearance of the Chinese "National Team" which stabilized the SHCOMP selloff in the last hour.

Morgan Stanley Expects A "Completely Flat" Yield Curve In 10 Months

"As the Fed hikes in December and then three more times in 2018, 2yr rates rise while 10yr and 30yr rates fall as bond investors grow worried about the effects of Fed tightening and skeptical that they'll be able to deliver more of it. By 3Q18, we forecast a flat 2s10s Treasury curve and a significant rally in 30yr rates."

Key Events In The Coming Week: Senate Tax Vote; Euro Inflation; GDP; OPEC, Fed Speakers

It's a busy week as traders return from the long Thanksgiving holiday, with inflation releases in the Eurozone and Japan. We'll also get the second estimate of US GDP, housing data and ISM manufacturing, UK monetary aggregates and PMIs in China. Finally, the Russia-OPEC meeting takes place in Vienna on November 30, while the Senate hearing of Fed chair nominee Powell and Yellen's testimony before Congress will be closely watched.

"When To Worry?": How Long After The Curve Inverts Does The Recession Begin

Sometimes inversion provides a timely signal for the economic cycle a la 2000, where Professor Curve predicted almost the ding-dong high in the SPX. However the 2006 episode of inversion dished up 7 months of pain for equity bears, with 18% further upside for the SPX. Same for 1989 where equities continued to rally 22% into the 1990 recession...

Demographic Dysphoria: Swiss Village Offers Families Over $70,000 To Live There

Demographic dysphoria continues to create headaches for governments worldwide. In Europe, a near decade of excessive monetary policy coupled with a massive influx of refugees have not been able to reverse negative population growth - first spotted in 2012 - so one Swiss village is taking matters into its own hands...