As we mentioned several weeks ago, the steady rise in interest rates is soon to become an issue for a number of markets.
US Dollar
Shift in Economic Sentiment From the US
While the hype and equity market euphoria from the election has started to moderate, a shift in economic sentiment from inside and outside the US was already in motion, and that could allow for a “risk on” vibe until the markets get closer to the mid-December FOMC meeting.
Time to Consider Economic Impact of the Election
The shocking election results on Tuesday caused a harsh, knee-jerk reaction in many financial and commodity markets.
International Headwinds Easing, December Rate Hike Entrenched
The march toward a December rate hike continues, with payroll data and wages for October just good enough to increase the prospect of action from the Fed.
Dollar Moves Higher; Oversupply For Soybeans
A strengthening US dollar and uncertainties in global stock markets have helped to drive some commodity markets lower over the past few weeks, and the possible appearance of a double top in crude oil has many macro-fund traders getting concerned about the outlook ahead.
Will the US Fed Act to Get Rates to a Normal, Non-Crisis State?
Evidence over the last month suggests to us that the BREXIT has not had as negative an impact as was expected.
World Economy Remains at a Critical Junction
While the jury remains out on the direction of the US economy, comments from the Fed recently calling for higher inflation targets and more action to stimulate growth probably spark two lines of reasoning.
US Economy Sparking Fears of Preemptive Action from the Fed
With the US payroll report surprising the trade with better than expected results for the month of July, new highs in US equities and anecdotal evidence of a possible bottoming in the Chinese economy (positive Alibaba earnings and a rise in iron ore and copper imports), it would seem like the groundwork has been laid for an improvement in “animal spirits.”
World Economic Condition is Disappointing but Not Beyond Resurrection
Either the payrolls report confirmed that a recovery remains in place in the US, or payrolls are indeed a lagging indicator.
The Level of Big-Picture Macroeconomic Uncertainty Is On the Decline
Death and Pestilence off of Brexit has failed to surface so far!