Eurodollar University

The yen and the euro are good currency indicators of global monetary conditions, but there are a couple even better and more consistent signals. When the 'dollar' goes up and these two are taking the hit because of it, that's when you really need to pay attention. It's not Trump, Jay Powell, interest rates or just random chance. Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The dollar index jumped to a more than two-year high leaving everyone to ask why. Some say Trump, others the Fed. They might as well have said it was Burger King (who blames Wendy's). Though the dollar is rising here in the short run, to really understand what's going on you have to consider more than just developments in November 2024. This has been in the works for several years. Eurodollar University's Money & Macro AnalysisReuters US dollar continues uptrend as Fed policy provides lifthttps://www.reuters.com/markets/currencies/dollar-over-two-month-high-yen-near-150dlr-2024-10-15/Bloomberg Wall Street Sees Dollar Soaring More, But Splits on How Muchhttps://www.bloomberg.com/news/articles/2024-11-12/dollar-s-trump-fueled-rally-unites-wall-street-on-bullish-betshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

After Germany's governing coalition collapsed last week, the country's ZEW added more solid evidence about why that was. The ZEW also collapsed into November. That's not just about Germany since the "zoo" is really what the rest of the world looks like from the German perspective. That also has a lot to say about the ongoing Treasury selloff (just like April).Eurodollar University's Money & Macro AnalysisZEW November 2024https://www.zew.de/en/press/latest-press-releases/falling-economic-expectations-after-trump-victoryBloomberg German Investor Confidence Slumps on Political Strife, Trump Winhttps://www.bloomberg.com/news/articles/2024-11-12/german-investor-confidence-slumps-on-political-strife-trump-winhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The economic challenges the incoming Trump administration is facing are far and away greater than those confronted in 2016. From the cyclical standpoint, 2024 has far more in common with 2001. While structurally, there's nothing close to this in generations. Amidst the election euphoria there needs to be sober analysis. Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Repo fails jumped by 50% in the latest weekly data, which just so happens to be the same week swap spreads plunged to record lows. It was also when the US economy, at least its labor data, took a turn for the worse. Understanding the connections between all these money and macro indications is critical. Eurodollar University's Money & Macro AnalysisFinancial Times New York Fed examines banks’ role in money market turmoilhttps://www.ft.com/content/83a5bb70-dbca-11e9-8f9b-77216ebe1f17FOMC Chair Powell Press Conference Transcript October 2019https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20191030.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Credit card usage isn't really about spending. Americans use their credit cards when they're confident about jobs and incomes. The latest data from the Fed contains a more serious warning especially how it lines up with jobs and income data...and the Fed's actions. Eurodollar University's conversation w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Is there era of massive government "stimulus" finally over? Bonds are certain it is. The Chinese are doing their best to make sure that's the result, in large part because they don't know what to do. That much is becoming clear and the implications are already going global. Just ask anyone with oil.Eurodollar University's Money & Macro AnalysisBloomberg China Unveils $1.4 Trillion Debt Swap, Saves Stimulus for Trumphttps://www.bloomberg.com/news/articles/2024-11-08/china-unveils-839-billion-debt-swap-to-rescue-local-governmentsBloomberg China Debt Plan Underwhelms Bond Market Betting on More Stimulushttps://www.bloomberg.com/news/articles/2024-11-08/china-bond-market-eyes-fiscal-plans-from-key-legislative-meetinghttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Germany's government is the latest casualty of the "vibecession." Amid a flurry of political activity, the markets throw up another major warning with the first ever negative swap spread. Predictably, the mainstream media can't make sense of swaps, the situation, or the economics. It's the economy, stupid. Eurodollar University's Money & Macro AnalysisBloomberg Germany’s Government Puts Itself Out of Its Miseryhttps://www.bloomberg.com/opinion/articles/2024-11-07/germany-s-coalition-government-puts-itself-out-of-its-miseryBloomberg Fear of German Debt Binge Flips Key Market Gauge for First Timehttps://www.bloomberg.com/news/articles/2024-11-07/fear-of-german-debt-binge-flips-key-market-gauge-for-first-timeBloomberg Scholz Sees Germany Riding Out War in Ukraine Without Recessionhttps://www.bloomberg.com/news/features/2023-01-17/german-chancellor-olaf-scholz-on-2023-economic-outlook-war-in-ukrainehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Huge moves, major negatives, and record declines for one of the most critical pieces of the entire global system. While election euphoria has gripped certain financial markets, this one is doing the opposite. It is a key warning about where everything stands before even considering whether or not Trump's victory changes anything. Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Demand for gasoil, the basic fuel which runs the entire modern world, is actually declining. Having stumbled over the summer, this exceptionally rare development is another really negative sign to go with, relatedly, even more production and job cuts across the auto industry. Energy, autos, economy. Eurodollar University's Money & Macro AnalysisBloomberg Diesel Set For Growing Glut as Demand Faltershttps://www.bloomberg.com/news/articles/2024-11-05/diesel-set-for-growing-glut-as-demand-faltersWorld Bank Commodity Markets Outlookhttps://openknowledge.worldbank.org/server/api/core/bitstreams/bbda9ad3-4f12-4626-ad4b-94a4d20fbd52/contentBloomberg OPEC Cuts Global Oil Demand Growth Forecasts for Third Consecutive Monthhttps://www.bloomberg.com/news/articles/2024-10-14/opec-cuts-global-oil-demand-growth-forecasts-for-third-consecutive-monthOPEC June 2https://www.opec.org/opec_web/en/press_room/7339.htmOPEC Sept 5https://www.opec.org/opec_web/en/press_room/7369.htmOPEC Nov 3https://www.opec.org/opec_web/en/press_room/7409.htmBloomberg Even Some High-Income Americans Can’t Afford New Cars Anymorehttps://www.bloomberg.com/news/articles/2024-11-04/soaring-2024-new-car-prices-turn-more-buyers-toward-used-vehiclesNikkei Nissan cutting production of main U.S. models by 30%https://asia.nikkei.com/Business/Automobiles/Nissan-cutting-production-of-main-U.S.-models-by-30Guru Focus Nissan Cuts Production Amid Declining U.S. Demand, Threatening Global Sales Goalshttps://www.gurufocus.com/news/2582356/nissan-cuts-production-amid-declining-us-demand-threatening-global-sales-goalsEuroNews Thousands of jobs to go at German car parts maker Schaefflerhttps://www.euronews.com/business/2024/11/05/thousands-of-jobs-to-go-at-german-car-parts-maker-schaefflerhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Why are interest rates rising at one end of the yield at the same time falling on the opposite side? With more recession data coming in all the time, starting with payrolls, it seems as though there should be a uniform response from the marketplace. But that's not how steepening works. Eurodollar University's Money & Macro AnalysisWashington PostHouse Passes Bush Tax Cuthttps://www.washingtonpost.com/archive/politics/2001/03/09/house-passes-bush-tax-cut/99152799-f156-414f-82c4-bed4fca05bb3/Time ‘The Worst Is Over’https://time.com/archive/6917914/the-worst-is-over/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

October payrolls were exceptionally weak, yet LT rates jump? With more rate cuts from the Fed basically assured, questions swirl around the Treasury selloff having many people wondering if there is a 'Trump trade' going on here. The answers are right there in front of us.Eurodollar University's conversation w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

This isn't about October or hurricanes. Government just confirmed jobs market is in big f-ing trouble. Eurodollar University's Money & Macro AnalysisBLS Employment Situation October 2024https://www.bls.gov/news.release/archives/empsit_11012024.pdfCNN Messy October jobs report muddied by strikes and storms ahead of Election Day https://www.cnn.com/business/live-news/us-jobs-report-october-11-01-24/index.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The government's latest data confirms the dramatic slowdown sweeping across the labor market. We've been documenting hours being cut, quitters quitting quits, no one hiring, and now even a few layoffs. Not only do the latest figures back all that up, they also help explain consumer behavior and even the last GDP estimate. Eurodollar University's Money & Macro AnalysisCNBC Ford guides to low end of 2024 earnings forecast as it slightly tops Wall Street’s third-quarter expectationshttps://www.cnbc.com/2024/10/28/ford-motor-f-earnings-q3-2024.htmlFord Q3 https://media.ford.com/content/fordmedia/fna/us/en/news/2024/10/28/third-quarter-2024-financial-results.htmlChallenger Gray & Christmas October 2024https://www.challengergray.com/blog/job-cuts-fall-in-october-2024-but-ytd-up-4-from-last-year/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Another seemingly solid US GDP report for the books thanks in large part to a huge allotment of missiles. Does this mean the soft landing has been achieved? Even if it has been achieved, we wouldn't know it from GDP data. Instead, history shows cyclical changes all look decent just before them. The latest quarterly data is not just comparable, it is, surprisingly, worse than every other period entering recession.Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Repo fails make sense being an indicator of collateral difficulties. Same for the 4-week US Treasury bill rate when it falls substantially. But how does Japanese government bill yields fit into the US$ repo picture? And why are they such a solid fit for it? The answer lies in the carry trade and what it means for funding markets as well as US recession risks. Eurodollar University's Money & Macro AnalysisBloomberg Mizuho Buys ‘Safe’ Assets on Risk That US Soft Landing Failshttps://www.bloomberg.com/news/articles/2024-10-08/mizuho-buys-safe-assets-to-cut-damage-if-us-soft-landing-failshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Some unexpected bad news out of South Korea has implications for AI and a lot more. The investment boom triggered by ChatGPT has been a critical support for especially the Asian economy. Now there are signs it is cooling off along with a further setback in autos. Inopportune timing, to say the least. Eurodollar University's conversation w/Steve Van MetreBloomberg South Korea’s Economy Ekes Out Growth as BOK Assesses Riskshttps://www.bloomberg.com/news/articles/2024-10-23/south-korea-s-economy-ekes-out-growth-to-emerge-from-contractionhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Gold continues to soar to record highs, but why? Most will say inflation though bullion is actually a terrible inflation hedge. The reason why many people believe this is the one time during the Great Inflation. Gold's run in the seventies was instead about what happened in the sixties long before the inflation. And it's the same thing - the other end of it - that we're seeing today. Eurodollar University's Money & Macro AnalysisFRB Boston Bretton Woods Conference 1984https://www.bostonfed.org/-/media/Documents/conference/28/conf28.pdfAlan Greenspan Testimony Before the Committee on Banking and Financial Services, U.S. House of Representatives July 24, 1998https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htmhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

A lot of people are asking if the Fed now regrets cutting rates by 50 bps in September, or maybe cutting at all. Recent data make it seem as though the soft landing never went anywhere, plus what appears to be happening with market interest rates. In truth, every part of this Fed "regret" trend is wrong, starting with the view from the central bank itself. Eurodollar University's Money & Macro AnalysisFederal Reserve Beige Bookshttps://www.federalreserve.gov/monetarypolicy/publications/beige-book-default.htmFOMC Chair Powell Press Conference September 2024https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240918.pdfBloomberg Fed’s Beige Book Shows Little Growth Across Most of UShttps://www.bloomberg.com/news/articles/2024-10-23/fed-s-beige-book-shows-little-economic-growth-across-most-of-ushttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Another central bank moves up its rate cut plans, accelerating its rate reductions with a 50-bps cut. At the same time the IMF lowers growth projections and warns risks of more downside are rising. These two developments are related to the same thing. It's becoming clearer where this weakness is coming from and that's why the public sector is starting to become more aggressive. Eurodollar University's Money & Macro AnalysisBank of Canada October 2024 Monetary Policy Reporthttps://www.bankofcanada.ca/wp-content/uploads/2024/10/mpr-2024-10-23.pdfBloomberg IMF Lowers Global Growth Forecast, Warns of Increasing Riskshttps://www.bloomberg.com/news/articles/2024-10-22/imf-lowers-global-growth-forecast-warns-of-increasing-risksIMF WEO October 2024 Policy Pivot, Rising Threatshttps://www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Huge thanks to Eric Basmajian and train-traveler Mike Green for answering member questions. Member/Subscriber Live Q&A recorded October 22, 2024.

We are seeing the full effects of the debt crisis paradox. And it only seems like a "paradox" from hte perspective of conventional wisdom on the matter. Government debt is indeed bad for the economy, but not AT ALL in the way most people are led to believe or assume. This creates another paradox, one where that mainstream criticism does a lot to discredit all criticism thereby making even more debt likely. Eurodollar University's Money & Macro AnalysisMilton Friedman Newsweek February 1981https://miltonfriedman.hoover.org/internal/media/dispatcher/214251/fullhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Does the Bank of Canada need to exist? Canada shares a lot more than just a common border with the US, interest rates, inflation, even changes in economic output. And those are all pointing in the wrong direction. The Canadian experience provides a perfect example of what globally synchronized really means in all its facets. Eurodollar University's conversation w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

This may end up being the final straw for what's left of the global economy. With more highly negative signals from copper, gold, oil and swaps, even bond spreads here, we're getting more impressions that the part rolling recession is now rolling right on into the full thing. If this one goes, that's usually it. Eurodollar University's Money & Macro AnalysisBloomberg Carmaker Misery Is Dragging Down Global Credit Market Returnshttps://www.bloomberg.com/news/articles/2024-10-16/carmaker-misery-is-dragging-down-global-credit-market-returnsBloomberg Rolling Manufacturing Recession Collides With US Election Angsthttps://www.bloomberg.com/news/newsletters/2024-10-18/us-manufacturers-face-layoffs-weak-results-ahead-of-trump-harris-electionhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

A whopping 98% of American voters in one mainstream poll say the economy is a major concern, including 79% who rate it their top worry. Economists, the media, politicians, policymakers are at a loss to explain this. The latest data from the US government shows why that is, both the confusion and the underlying trouble. A vast majority of the evidence continues to consistently agree with what Americans are saying.Eurodollar University's Money & Macro AnalysisNRF Census Retail Sales Data Shows Retail Sales Grew in Septemberhttps://nrf.com/media-center/press-releases/census-retail-sales-data-shows-retail-sales-grew-septemberNRF CNBC/NRF Retail Monitor Shows Retail Sales Declined Monthly in September But Still Grew Year Over Yearhttps://nrf.com/media-center/press-releases/cnbc/nrf-retail-monitor-shows-retail-sales-declined-monthly-septemberAP NORChttps://apnorc.org/projects/the-economy-tops-voters-minds-as-they-consider-their-vote-in-the-upcoming-election/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Wall Street was rocked by a huge plunge in orders for ASML, a company which produces machines that touch practically every part of the global economy. That was followed by another four-letter firm, LVMH, which reported a shock decline in revenue. Both showing the same thing from very different angles, further confirming - along with swap markets - why there will be another leg down in interest rates.Eurodollar University's Money & Macro AnalysisASML Homehttps://www.asml.com/enASML Q4 2023 Resultshttps://www.asml.com/en/news/press-releases/2024/q4-2023-financial-resultsASML Q3 2024 Resultshttps://www.asml.com/en/news/press-releases/2024/q3-2024-financial-results-dd3ac76a9d4d0f8cIntel Q2 2024 Financial Resultshttps://www.intc.com/news-events/press-releases/detail/1704/intel-reports-second-quarter-2024-financial-resultsLVMH Q3 2024 Resultshttps://www.lvmh.com/en/publications/lvmh-shows-good-resilience-in-the-current-contextNYT Shares of Louis Vuitton Owner Drop on Anxiety About Chinese Shoppershttps://www.nytimes.com/2024/10/16/business/dealbook/lvmh-dior-louis-vuitton-china.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

We are in the thick of bank earnings and quarterly reports. The one theme they keep coming back to is...losses. It's become such a problem even JPM CEO Jamie Dimon snapped during his last earnings call. The thing is, in spouting off he told the truth about all of it. Eurodollar University's Money & Macro AnalysisBloomberg Jamie Dimon Is Right. Forget the ‘Damn Number.’https://www.bloomberg.com/opinion/articles/2024-10-14/jamie-dimon-is-right-analysts-need-to-look-beyond-their-modelsBank of America Quarterly Earningshttps://investor.bankofamerica.com/quarterly-earningsJPM Third Quarter 2024 Resultshttps://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2024/3rd-quarter/66269bb6-ecc5-4172-b461-6b7e7cd47aab.pdfCitigroup Third Quarter 2024 Resultshttps://www.citigroup.com/rcs/citigpa/storage/public/Earnings/Q32024/2024pr-qtr3rslt.pdfBloomberg Consumers Shift Spending to Pay for Basic Staples, Citi CFO Sayshttps://www.bloomberg.com/news/articles/2024-09-09/consumers-shift-spending-to-pay-for-basic-staples-citi-cfo-sayshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Another update from top Chinese officials on the status of "stimulus" comes amidst a flurry of macro and banking data from the country. While many will claim the former cancels out the increasingly grim nature of the latter, the previous data still matters at the very least to describe the size of the hole China will have to climb out of. Assuming it is even making a reasonable attempt to. That last press gathering provided few assurances. Eurodollar University's Money & Macro AnalysisChina NBS Consumer Prices September 2024https://www.stats.gov.cn/sj/zxfb/202410/t20241013_1956899.htmlCNBC China’s Ministry of Finance is taking aim at local debt problems before tackling broader economic challengeshttps://www.cnbc.com/2024/10/14/chinas-ministry-of-finance-tackles-debt-problems-before-economic-challenges.htmlCaixin Exclusive: China May Add 6 Trillion Yuan in Treasury Bonds to Buttress Economyhttps://www.caixinglobal.com/2024-10-14/exclusive-china-may-issue-6-trillion-yuan-in-treasury-bonds-to-buttress-economy-102245341.htmlReuters China's exports miss forecasts as lone bright spot fadeshttps://www.reuters.com/markets/asia/china-sept-export-growth-hits-5-month-low-global-demand-cools-2024-10-14/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

A big jump in jobless claims actually muddies the picture for the labor market. Meanwhile, consumer prices that many in the mainstream are claiming as sticky...are. But not for the reasons stated. We're seeing "sticky" prices in the technical sense, and that's not good. Eurodollar University's conversation w/Steve Van Metre Bloomberg Odd Lots Austan Goolsbee Explains the Fed’s Big Rate Cuthttps://www.bloomberg.com/news/articles/2024-10-11/austan-goolsbee-explains-the-fed-s-big-rate-cutAtlanta Fed Sticky Price CPIhttps://www.atlantafed.org/research/inflationproject/stickyprice/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The world’s major growth engine the past few years is showing more and worsening signs of finally cracking, including its currency hitting a record low just today. I’m not talking about the US, obviously, nor is it sickly China. India. If India has stumbled, too, as the rupee suggests, then there might be no escaping globally synchronized. Eurodollar University's Money & Macro AnalysisBloomberg India’s Industrial Output Declines For First Time in Two Yearshttps://www.bloomberg.com/news/articles/2024-10-11/india-s-industrial-output-declines-for-first-time-in-two-years?srnd=phx-economics-v2S&P Globalhttps://www.spglobal.com/en/research-insights/special-reports/india-forward/indias-growing-role-in-the-global-economyHSBC India Total sales growth softens as export gains diminishhttps://www.pmi.spglobal.com/Public/Home/PressRelease/8b2aeb7799e44b899c2651b5732e0878https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

There is a story brewing in repo. Fails have broken a long run trend and they did it in early August. Latest data from FRBNY says that's still the case. It fits with a bunch of other data as well as brings up the ongoing unwind in the real yen carry trade. Finally, behind all of it is US recession fears driving fails, collateral, Japan's withdrawal, and more. And you don't have to take my word for it; hear it (or read it) straight from a carry trader himself. Eurodollar University's Money & Macro AnalysisBloomberg Mizuho Buys ‘Safe’ Assets on Risk That US Soft Landing Failshttps://www.bloomberg.com/news/articles/2024-10-08/mizuho-buys-safe-assets-to-cut-damage-if-us-soft-landing-fails?srnd=phx-economics-v2https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

While everyone - especially in Chinese and China-related stocks - get caught up in last month's "stimulus" frenzy, the overlooked the only real news that came out of it. Very quietly, the country's top bank regulator just casually mentioned the government was gathering a trillion yuan to "recapitalize" China's biggest six banks. Yeah. Meanwhile, volatility has hit the previously insane equity surge. Eurodollar University's Money & Macro Analysis***Eurodollar University's Fall Sale***Discounts on all our subscriptions and memberships. If you want to know how all this stuff works, EDU has got you covered.https://www.eurodollar.universityBloomberg China to Add Capital at Big Banks for First Time in a Decadehttps://www.bloomberg.com/news/articles/2024-09-24/china-to-boost-capital-at-mega-banks-for-first-time-in-a-decadeSCMP China weighs injecting US$142 billion of capital into top bankshttps://www.scmp.com/business/china-business/article/3280008/china-weighs-injecting-us142-billion-capital-top-banksNikkei Asia China's state banks report more bad loans to hotels, restaurants and storeshttps://asia.nikkei.com/Business/Finance/China-s-state-banks-report-more-bad-loans-to-hotels-restaurants-and-storesBloomberg China Markets Warn Xi That More Stimulus Is Needed to Fuel Rallyhttps://www.bloomberg.com/news/articles/2024-10-08/china-markets-warn-xi-that-more-stimulus-is-needed-to-fuel-rallyTwitter: https://twitter.com/JeffSnider_EDU

Another recession warning and this one is related to brewing problems with unemployment. The September payroll report has put mainstream focus back on a soft- or no-landing scenario, but we've been there before not long ago. Meanwhile, apart from the unreliable payroll figure everything else continues to point to bigger trouble, including Americans who have stopped using their credit cards. Eurodollar University's Money & Macro Analysis***EURODOLLAR UNIVERSITY FALL SALE***Subscriptions and price information:https://www.eurodollar.universityABC News Blockbuster jobs report flexes economic strength, defying Americans' lukewarm attitudeshttps://abcnews.go.com/Business/blockbuster-jobs-report-flexes-economic-strength-defying-americans/story?id=108887637Challenger, Gray & Christmas Job Cuts Flat in September 2024 from August; YTD Surpasses 2023https://www.challengergray.com/blog/job-cuts-flat-in-september-2024-from-august-ytd-surpasses-2023/Robert Shimer Reassessing the Ins and Outs of Unemploymenthttps://home.uchicago.edu/~shimer/wp/reassess.pdfTwitter: https://twitter.com/JeffSnider_EDU

US economic weakness continues to show up outside the country as much as inside (last payroll estimate notwithstanding). Japan's government leading indicator just tanked, lowest value since 2020 and pointing to growing trouble in Japan. Same from Mexico and even according to one by JP Morgan. Eurodollar University's Money & Macro AnalysisBloomberg Ueda Hints at Dovishness After New Prime Minister Urges Cautionhttps://www.bloomberg.com/news/articles/2024-10-02/ueda-hints-at-dovishness-after-new-prime-minister-urges-cautionS&P Global Mexico Manufacturing PMIhttps://www.pmi.spglobal.com/Public/Home/PressRelease/5cbff538ec56483b8e9a77ce7c1c252eJP Morgan Global Compositehttps://www.pmi.spglobal.com/Public/Home/PressRelease/80a2d5d7d8554f7f909ba9ae30fd4016***EDU FALL SALE***Subscriptions and memberships:https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

September's payroll estimate soared WAY above expectations. Is it a Fed miracle? This isn't the first time this has happened; in fact, each of the last two times the FOMC began cutting rates met eerily similar results. Steve and I talk about what those were and why, also why that means everything right now. Eurodollar University's conversation w/Steve Van Metre***EURODOLLAR UNIVERSITY FALL SALE***Best subscription prices on the Deep Dive Analysis, Daily Briefing, and EDU membership. https://www.eurodollar.universitySeptember 2024 Payroll Reporthttps://www.bls.gov/news.release/empsit.nr0.htmTwitter: https://twitter.com/JeffSnider_EDU

The bond rally is now one year old and it finally got to the point where central banks - including the Fed - are getting out of the way. Now that the market got what it "wants", there's no stopping it, right? Not quite. Nothing ever goes in a straight line, starting with policy pivots. The market will always surprise you. ***EURODOLLAR UNIVERSITY FALL SALE***https://www.eurodollar.universityEurodollar University's Money & Macro AnalysisTwitter: https://twitter.com/JeffSnider_EDU

There are several ways to know that the second phase for the global recession has started. While there is never a clear demarcation between any stages or just recession, for that matter, there are telltale signs and we are getting them bigtime. Summer keeps showing up as full of warnings, including one that explains everything from the economy to central bankers' increasingly panicking reaction to it. Eurodollar University's Money & Macro AnalysisBloomberg ECB Can’t Ignore Headwinds to Economic Growth, Schnabel Sayshttps://www.bloomberg.com/news/articles/2024-10-02/ecb-can-t-ignore-headwinds-to-economic-growth-schnabel-saysBloomberg ECB Momentum for an October Rate Cut Is Looking Unstoppablehttps://www.bloomberg.com/news/articles/2024-10-02/ecb-momentum-for-an-october-rate-cut-is-looking-unstoppableBloomberg ECB Should Proceed Cautiously With Rate Cuts, Schnabel Warnshttps://www.bloomberg.com/news/articles/2024-08-30/ecb-should-proceed-cautiously-with-rate-cuts-schnabel-warnsNikkei Transcript: ECB board member Isabel Schnabel speaks with Nikkeihttps://asia.nikkei.com/Editor-s-Picks/Interview/Transcript-ECB-board-member-Isabel-Schnabel-speaks-with-NikkeiFT Lower borrowing costs risk ‘flare-up’ of inflation, warns ECB policymakerhttps://www.ft.com/content/bdf3bb86-8a80-4bd5-b562-0c3c47f85f50https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The Bank of Japan's very recent change of heart has apparently been strong enough to do the same for incoming Prime Minister Shigeru Ishiba. Sounding aggressively hawkish where it came to interest rates just last week after his surprise ascent, suddenly he's completely changed his tune. Why? The answer can be found in another record low for a highly critical US$ market. Eurodollar University's Money & Macro AnalysisBloomberg Ueda Keeps Rate Hikes in Play, Talks Down BOJ’s Part in Meltdownhttps://www.bloomberg.com/news/articles/2024-08-23/boj-s-ueda-still-plans-to-hike-rates-if-economy-meets-outlookBloomberg Ueda Reiterates That BOJ Will Lift Rates If Outlook Realizedhttps://www.bloomberg.com/news/articles/2024-09-03/boj-ueda-reiterates-stance-of-lifting-rates-if-outlook-realizedThe New York Times Stocks in Japan Tumble After Party’s Election of New Prime Ministerhttps://www.nytimes.com/2024/09/29/business/japan-stocks-nikkei-shigeru-ishiba.htmlCNBC Here’s why Japan’s stocks are plunging after Shigeru Ishiba’s winhttps://www.cnbc.com/2024/09/30/heres-why-japans-stocks-are-plunging-after-shigeru-ishibas-win.htmlBNN Bloomberg Ishiba Ally Sends Signal to Warn BOJ Against Rate Hike Too Soonhttps://www.bnnbloomberg.ca/business/international/2024/10/02/japans-ishiba-isnt-necessarily-pro-boj-hike-new-minister-says/Bloomberg Japan’s Ishiba Rules Out BOJ Interest Rate Hikes For Nowhttps://www.bloomberg.com/news/articles/2024-10-02/boj-s-ueda-briefs-new-pm-ishiba-on-market-developmentsBloomberg Ueda Hints at Dovishness After New Prime Minister Urges Cautionhttps://www.bloomberg.com/news/articles/2024-10-02/ueda-hints-at-dovishness-after-new-prime-minister-urges-cautionhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Jay Powell again reiterated that he believes the economy is "on solid footing." The most recent data on the labor market shows he's either wrong or lying. There is no equivocating these latest estimates in which hiring has collapsed. As if that wasn't enough, it was backed up by other sources. All of it pointing to summertime being the time for recession. It's all about hiring, and that has all but disappeared. Eurodollar University's Money & Macro AnalysisBloomberg Powell Says Fed Not in a Hurry, Will Lower Rates ‘Over Time’https://www.bloomberg.com/news/articles/2024-09-30/powell-says-fed-will-move-over-time-to-more-neutral-stanceBloomberg Fed’s Goolsbee Sees ‘Many More’ Rate Cuts Over the Next Yearhttps://www.bloomberg.com/news/articles/2024-09-23/fed-s-goolsbee-sees-many-more-rate-cuts-over-the-next-yearCNN A sign of strength in the labor market: Job openings increased in Augusthttps://www.cnn.com/2024/10/01/economy/us-jolts-job-openings-layoffs-august/index.htmlISM September 2024 Manufacturing ISM Report On Businesshttps://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/september/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Car stocks got clobbered as the global auto industry is heading for a major fall. There was a flood of announcements from carmakers all over the world this weekend as carmakers are facing very difficult choices. The fallout from the growing reverse will be profound given how important a rising auto market had been up to now. Eurodollar University's Money & Macro AnalysisStellantis Updates 2024 Financial Guidancehttps://www.globenewswire.com/news-release/2024/09/30/2954870/0/en/Stellantis-Updates-2024-Financial-Guidance.htmlBloomberg Stellantis Cuts Forecasts in Further Blow to Besieged Carmakershttps://www.bloomberg.com/news/articles/2024-09-30/stellantis-cuts-2024-forecast-on-costs-for-us-global-slowdownDow Jones Aston Martin shares fall 25% after warning blamed on supply disruptions, Chinahttps://www.morningstar.com/news/marketwatch/2024093033/aston-martin-shares-fall-25-after-warning-blamed-on-supply-disruptions-chinaVolkswagen AG updates its forecast for the 2024 financial yearhttps://www.volkswagen-group.com/en/ad-hoc/volkswagen-ag-updates-its-forecast-for-the-2024-financial-year-18698The Guardian Volkswagen has ‘a year, maybe two to turn around’, financial chief warnshttps://www.theguardian.com/business/article/2024/sep/04/volkswagen-has-a-year-maybe-two-to-turn-around-financial-chief-warnsBloomberg VW’s Second Profit Warning Exposes a Carmaker in Declinehttps://www.bloomberg.com/news/articles/2024-09-30/volkswagen-s-second-profit-warning-exposes-a-carmaker-in-declinehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Now that everyone is coming to grips with economic weakness, particularly where it comes to employment conditions, understanding the high potential for a lot more or worse, people are trying to figure out where it is coming from therefore what might be done to turn it all around. Did the Fed break the economy? Are employers worried about the next President? Eurodollar University's conversation w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Americans continue to say they're alarmed about job prospects. That's what consumer confidence is truly about, not consumer spending. Workers see and understand labor market shifts before they show up in the major data sources. The latest income data show there is every reason to believe what consumers are seeing. Eurodollar University's Money & Macro AnalysisConference Board September 2024https://www.conference-board.org/topics/consumer-confidence/press/CCI-Sep-2024FRBNY Consumer Confidence: A Useful Indicator of . . . the Labor Market?https://libertystreeteconomics.newyorkfed.org/2013/09/consumer-confidence-a-useful-indicator-of-the-labor-market/FRBNY Survey of Consumer Expectationshttps://www.newyorkfed.org/microeconomics/sce#/earnuncert-1https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Not content to leave it with the PBOC's Oprah-fest of rate cutting, China's central authorities announced what's being called a massive stimulus push. The response has been near-euphoria in Chinese and other stocks, but the opposite in more crucial markets and places. All the more curious given how much other "stimulus" is being offered around the world, central bank rate cuts that are accelerating. Eurodollar University's Money & Macro AnalysisThe Political Bureau of the CPC Central Committee held a meeting to analyze and study the current economic situation and economic work.https://www.gov.cn/yaowen/liebiao/202409/content_6976686.htmReuters Exclusive: China to issue $284 billion of sovereign debt this year to help revive economyhttps://www.reuters.com/markets/asia/china-issue-284-bln-sovereign-debt-this-year-help-revive-economy-sources-say-2024-09-26/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

It's not just USTs. Rates are falling all over the world faster in shorter maturities than long. That means a global wave of un-inversions and bull steepening right as more and more central banks plan to accelerate their own rate cutting. All of it for the same reason. Globally synchronized.***CHECK OUT EURODOLLAR UNIVERSITY's FALL SALE***https://www.eurodollar.universityEurodollar University's Money & Macro AnalysisNBB Is a recession imminent? The signal of the yield curvehttps://www.nbb.be/doc/ts/publications/economicreview/2019/ecorevi2019_h4.pdfBloomberg Riksbank Cuts Rate Again and Opens Door to Half-Point Movehttps://www.bloomberg.com/news/articles/2024-09-25/riksbank-cuts-rate-a-quarter-point-and-opens-door-to-bigger-move

Chinese authorities held a surprise press conference early this morning where PBOC Governor Pan Gongsheng did his best Oprah Winfrey impression handing out rate cuts to practically everyone. All that does is further expose the gravity of the situation: the more the central bank or any authority does, the worse you know it is since rate cuts never work. China just announced a lot of them. Eurodollar University's Money & Macro AnalysisBloomberg China Unleashes Stimulus Package to Revive Economy, Marketshttps://www.bloomberg.com/news/articles/2024-09-24/china-frees-banks-to-lend-more-cuts-key-interest-ratehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

More confirmation that recession is coming back with a vengeance in Europe. The latest data indicates the dangers this time around including jobs and layoffs. This situation in Europe is hardly unique. This is why central bankers are out in force downplaying their own rate cuts; to the point a few policymakers are outright lying why they voted for them. Eurodollar University's Money & Macro AnalysisBloomberg Fed’s Waller Says Slowing Inflation Led Him to Support Large Rate Cuthttps://www.bloomberg.com/news/articles/2024-09-20/waller-says-slowing-inflation-led-him-to-support-large-rate-cutBloomberg Fed’s Kashkari Says Interest-Rate Hikes Not Entirely Ruled Outhttps://www.bloomberg.com/news/articles/2024-05-28/fed-s-kashkari-says-rate-hike-not-entirely-ruled-outBloomberg Fed’s Neel Kashkari Expects Two Quarter-Point Cuts Before Year’s Endhttps://www.bloomberg.com/news/articles/2024-09-23/neel-kashkari-backed-fed-s-large-cut-and-another-half-point-this-yearBloomberg Fed’s Bostic Says He Now Might Favor More Than One 2024 Cuthttps://www.bloomberg.com/news/articles/2024-08-23/fed-s-bostic-says-he-now-might-favor-more-than-one-cut-this-yearAtlanta Fed On the State of the US Economy and Monetary Policyhttps://www.atlantafed.org/news/speeches/2024/09/23/bostic--on-the-state-of-the-us-economy-and-monetary-policyS&P Global S&P Global Flash US Composite PMI September 2024https://www.pmi.spglobal.com/Public/Home/PressRelease/35c60149cdbe461fb6bc3c959a58a551S&P Global/Hamburg Commercial Bank HCOB Flash Eurozone PMI September 2024https://www.pmi.spglobal.com/Public/Home/PressRelease/cf25d7bb494046ae9256a00ca028f09ahttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The Fed just cut its benchmark rate by 50-bps even though jobless claims are among the lowest in their history. At the same time, CPI shelter prices have accelerated. Neither seems like it would warrant the Fed action yet there are good reasons to believe true unemployment is very different from claims and current market rents are plunging. Eurodollar University's conversation w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

FedEx's CEO admitted some truth about the Fed's rate cut this week, and the stock was immediately punished for it, dropping 15% on Friday. This raises a bunch of questions, starting with: what happens to stocks in general when the Fed cuts rates? The answer is not what you think.Eurodollar University's Money & Macro AnalysisCNBC FedEx quarterly profit disappoints as demand for speedy delivery waneshttps://www.cnbc.com/2024/09/19/fedex-reports-drop-in-quarterly-earnings-on-lower-demand-for-priority-services.htmlRobert Shiller 2013 Nobel Speculative Asset Priceshttps://www.nobelprize.org/uploads/2018/06/shiller-lecture.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Now that the Fed has done it, everyone wants to get in on the act. They call it "undershooting" which is just a fancy word for "bonds were right." Switzerland, Canada, even the Europeans all thinking hefty and accelerated schedules. Leave it to the Brits to be the lone exception. Eurodollar University's Money & Macro AnalysisBloomberg Bank of Canada Officials Split on Balance of Inflation Riskshttps://www.bloomberg.com/news/articles/2024-09-18/bank-of-canada-officials-are-split-on-balance-of-inflation-risksBloomberg Swiss Government Sees Sharp Drop in Inflation Rate Next Yearhttps://www.bloomberg.com/news/articles/2024-09-19/swiss-government-sees-sharp-drop-in-inflation-rate-next-yearBloomberg Swiss Economists See ‘Substantial’ Chance of SNB Half-Point Cuthttps://www.bloomberg.com/news/articles/2024-09-19/swiss-economists-see-sustantial-chance-of-snb-half-point-cutPolitico EU Portuguese bank chief: ECB may need to accelerate interest rate cutshttps://www.politico.eu/article/mario-centeno-ecb-may-need-accelerate-easing-interest-rate-date-bank-portugal/ZEW Hopes of a Recovery Are Fadinghttps://www.zew.de/en/press/latest-press-releases/hopes-of-a-recovery-are-fadingBloomberg Germany May Already Be in Mild Recession, Bundesbank Sayshttps://www.bloomberg.com/news/articles/2024-09-19/germany-may-already-be-in-mild-recession-bundesbank-saysEuronews US chip-maker Intel has announced plans to postpone the construction of a factory in Germany for at least two years.https://www.euronews.com/business/2024/09/17/intel-postpones-construction-of-german-chip-factory-for-two-yearshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The Fed cut its benchmark rates by 50 bps in a panicky move to catch up to both the economy and the marketplace. Reaction in the latter was muted because this wasn't unexpected. All the FOMC did was confirm everything - and then deny that it did. Eurodollar University's Money & Macro AnalysisBloomberg Fed Minutes Show Officials Rally Around Higher-for-Longer Rateshttps://www.bloomberg.com/news/articles/2024-05-22/minutes-show-officials-rallying-around-higher-for-longer-ratesFOMC September statementhttps://www.federalreserve.gov/monetarypolicy/files/monetary20240918a1.pdfFOMC September projectionshttps://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240918.pdfFOMC June projectionshttps://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20240612.pdfhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU