Anyone else ever feel, even just for a moment, that this is all getting a bit mad .... and not in a

ref :- "Frustrated central bankers cast around for fresh thinking" , Michael Mackenzie's Long View, FT Weekend Mad ? Really ? Well, it depends on how you look at it .... It's another big week for central banks, in particular for the US Federal Reserve who announce their monetary policy decision on Wednesday. As we know, a cut of 25 basis points is the likely outcome with more to follow before year-end. The rationale behind a cut/cuts centres on insuring against a slowdown in growth prompted by the trade war and economic headwinds imported from outside the US, against a background of a benign inflation scenario. Everyone has their own priorities when it comes to extending the long economic ex

If even US banks are worried, spare a thought for the rest…

ref: - "Return to Easy Money Poised to Slam Bank Profits in US, Europe “, Bloomberg Markets Did they say "RETURN to easy money”? People outside of the States and particularly in Europe and Japan would argue without fear of contradiction that easy money's never gone away. Global considerations may have caused the US Federal Reserve to delay their intended rate-rising cycle a couple of times in the early days, but they have still managed no less than nine rate hikes since 2015. That at least gives the central bank some firepower when they decide that an easier monetary policy is appropriate (more on that in a second...). But in the Eurozone, where the deposit rate was lowered to MINUS 0.4% way

The dollar ignores both the plainest of hints and the noisiest of voices .....

ref :- "Fed signal on interest rate cuts fail to weaken dollar" , The Financial Times, International Section When it comes to the likelihood of the Fed cutting US rates, the market has been pretty adamant for what seems like a very long time indeed ..... it's not a question of "If ?", but one of "When ?" , "By how much ?" and "How many times ?" . It's true that last week's stronger-than-expected employment data may have caused some of those with the most dovish expectations of Fed actions to scratch their heads for a moment. But even so, the prices of Fed Funds futures tell us that on balance traders think the most likely scenario is still, one 25bp cut this month, and two more by year-end.

Both the populist right and the new left are agreed that another long-established principle has bitt

ref: - "Ocasio-Cortez, Trump Adviser Unite to Trash the Phillips Curve”, Bloomberg Markets First of all, a quick reminder: The Phillips Curve: A graphic depiction of the inverse relationship between levels of unemployment and wages on the one hand, and inflation on the other. Or in other words, it's a theory that states that the lower the level of unemployment, the higher the level of wages and therefore of inflation (and vice versa). It's one of those theories that sounds totally logical, and with the exception of the period of stagflation in the 1970s has worked pretty consistently for many years… until recently, that is. We talk often about how many economists (most with some degree of fa

Pausing for thought is often a good idea, but it's not really in the nature of markets... oh, an

ref: -” Lagarde nomination brings cheer after European rally stutters on US jobs surge”, The Financial Times A few thoughts on a Monday morning… and the first one that comes to mind concerns the aftermath of Friday's US employment numbers for June. Whilst the headline unemployment rate and the average hourly earnings figure fractionally missed the median estimates by the smallest of margins, the key market-mover was the non-farm payrolls number -- the amount of jobs created in June -- which came in at +224,000. This was way above the median estimate of +165,000, higher in fact than any estimate that we saw. One could point out that the employment data is pretty volatile and not easy to predi

The ECB to buy bonds again already ? If they're going to start adding stimulus again, it's g

ref :- "Europe will be better off if Draghi embraces QE instead of rate cuts" , Markets Insight by Melvyn Krauss, The Financial Times Anyone who happened to start their career by trading UK and US interest rates as the 1970s turned into the 1980s -- is anyone really that old ? -- would have thought that the idea of a monetary landscape such as we have today could only be conceived of as an interesting intellectual exercise, not something with any connection to reality. Driven by the determination of a certain Margaret Thatcher to put the defeat of soaring inflation above all other considerations, UK rates ended 1979 at 17%. A similarly motivated Paul Volcker led the US Federal Reserve to

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