Just a quick comment on a present condition. EU productivity has grown on average only 0.7% a year since 2015. I spoke with a CTA in the 1990’s about the EU and he did not believe it would survive in the long run in part because the major sovereigns were acting like dominant powers and camouflaging it. Draghi has a viable plan but the framework and agendas of the dominant powers are too fragmented and power hungry for it to take root. I do not feel this is a “European thing” as much as it is human nature.
The EU is facing that moment when the façade requires major structural adjustment or it will fail in time. They need to re-write the contracts to save themselves.
As we wait for the Fed to make its widely anticipated interest rate decision, this is one that could go either way. The debate is not whether the Fed will cut rates but by how much.
Will the Fed Cut Rates by 25 or 50 bps.?
Big upside beat in NYS Empire Manufacturing Index.
While this is considered a low impact report, any data pre-FOMC will be scrutinized closely. (dollar is up after the report)
See our Economic Data Calendar
A look at the day ahead in U.S. and global markets from Mike Dolan
After an extraordinary 30-month monetary squeeze designed to zap a post-pandemic inflation spike, the Federal Reserve is finally set to cut interest rates this week – and it’s now only a matter of how much.
With another set of weak industrial and retail readings from China on Saturday and the FBI on Sunday pursuing a second failed assassination attempt on Republican presidential candidate Donald Trump, the news backdrop to this long-awaited Fed easing week is agitated to say the least.
USDJPY MONTHLY CHART – Up like an escalator and down like an elevator
It took nearly a year for USDJPY to climb to nearly 162 following the initial move above 140 and 3 months to fall back below it.
This chart shows the risks if the 140 break holds in a market that, at least to start the week, is hoping the Fed cuts by 50bps.
Logic says this suggests the current FX moves are fragile given the size of the anticipated rate cuts is seen as a toss up.
yes and yes and YES
Stock futures are little changed as investors await major Fed decision: Live updates
… “central bankers are expected to cut rates for the first time since 2020” – yes
just as
“The S&P 500 is less than 1% away from its July record and could notch a new all-time high this week” – – yes
and
“as many investors hope the decision could lower borrowing costs for companies and improve overall earnings growth — boosting economic growth“ — YES!
10-yr Yield | 4:52 AM EDT 3.644%
AND A … JOKE
Harris or Trump? Once Again, Election Results Could Take Awhile.
Curtesy New York Times
THIS WEEK’S MARKET-MOVING EVENTS
The week begins early, on Saturday Chinese time with the country’s release of monthly industrial production and retail sales data, both of which are expected to slow appreciably. The Federal Reserve, despite indications of continued economic strength, is expected to cut rates by 25 basis points on Wednesday. The Bank of England is expected to hold policy steady on Thursday as are the People’s Bank of China and the Bank of Japan, both on Friday.
Canadian consumer prices on Tuesday are expected to break lower to a near target 2.1 percent. UK consumer prices on Wednesday, which will help inform Thursday’s BoE meeting, are expected to hold steady at 2.2 percent.
US retail sales on Tuesday are expected to show underlying strength in contrast to US industrial production which, also posted on Tuesday, is expected to remain flat. The first estimate of New Zealand GDP on Thursday is expected to contract a quarterly 0.4 percent followed by Australia’s August labour force survey, which also on Thursday, is expected to show continued strength.
Econoday
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