Yield Curve

85% Of Wall Street Expects a "Dovish Hike Signal" From Yellen Tomorrow

Earlier this week, Citi's head of G10 FX strat Steven Englander conducted a survey among 350 participants asking them what they expect from Janet Yellen's Jackson Hole speech. According to the vast majority, or 85% of the respondents, Yellen will lean toward one 2016 rate hike with hiking risk “overwhelmingly” in December even as September hiking risk is seen as “modestly underpriced."

Heading Down The J-Hole: "The Fed Isn't Hawkish"

The Fed isn’t hawkish. Beyond the consistent headlines talking up an imminent Fed hike or regurgitating the truism that every meeting is “live,” the substance of recent commentary from policy makers has been notable for its balance, and that’s a dovish shift... but with the economy sagging once again, is the market priced for such an outcome as Janet 'fesses up to the limits of monetary policy?

Futures Rise, Global Stocks Flat After Ugly Chinese Economic Data

One day after all three US indexes hit record highs for the first time since December 31, 1999, US equity index futures, European stocks and Asian equities are little changed after the Nikkei jumped on the back of a Yen weakness, while China reported disappointing economic data and the PBOC suggested that the flood of new debt is slowing which pushed Chinese stocks higher by 1.6% on hopes of more stimulus.

Rising Recession Risks & The Tears In America's Economic Fabric

Stock market “bulls” should pray that interest rates don’t rise. Don’t blame those poor consumers for not spending – they are spending everything they have and then some. Just one word describes the outcome of that event given the current excessively leveraged consumption based economy of today – disaster.

Wall Street Reacts To The BOE's QE Failure

As first reported yesterday, in a striking development, the BOE failed to monetize all the longer-maturity gilts it had hoped to purchase on just the second day of its restarted QE operation, as it encountered something striking: an offerless bond market. Today Wall Street responds.

James Grant: Negative Interest Rates Will End... Badly

“Radical monetary policy begets more radical policy... It seems to me, at some point, markets or voters will put a stop to this.” If and when that time comes, Grant notes that investors will be looking for physical stores of wealth, explaining "the case for gold is not as a hedge against monetary disorder, because we have monetary disorder, but rather an investment in monetary disorder."

Frontrunning: August 9

  • Search for yield drives stocks higher, pound falls vs dollar (Reuters)
  • China's slowing wholesale deflation takes pressure off central bank (Reuters)
  • Rajan Holds India Rates in Final Move as Inflation Quickens (BBG)
  • Brent above $45 on U.S. inventories, producer action speculation (Reuters)
  • Republican national security experts: Trump would be 'dangerous' president (Reuters)