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Tag Archives: Germany

Commodity Tracker: 5 charts to watch this week

Natural gas is top of our editors’ picks of unfolding commodity trends this week, with Europe’s market responding to oversupply and solid US production giving rise to ample storage. Elsewhere, low US power prices, Germany’s latest plan to step up emissions reductions and soaring nickel prices all feature. 1. Weather forecasts cause wild ride in European gas…     What’s happening? The European gas market is oversupplied, thanks to a global LNG surplus and storage stocks close...

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The Scientism of Trade Wars

One year ago, last October, the IMF published the update to its World Economic Outlook (WEO) for 2018. Like many, the organization began to talk more about trade wars and protectionism. It had become a topic of conversation more than concern. Couched as only downside risks, the IMF still didn’t think the fuss would amount to all that much. Especially not with world’s economy roaring under globally synchronized growth. Even though there were warning signs already by then, the idea was that the...

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Not a Good Day for Negotiators

o Overview: The re-opening of Chinese markets after a long holiday did not produce the volatility that many expected. Chinese stocks alongside most Asia markets traded higher today, and the yuan advanced. After opening higher and extending its recent rally, Europe's Dow Jones Stoxx 600 turned down, even though Germany announced an unexpected gain in August industrial output. US shares are trading a bit lower. Benchmark 10-year bonds are little changed. The dollar is mostly softer. Among...

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The Consequences Of ‘Transitory’

Europe’s QE, as noted this weekend, is off to a very rough start. In the bond market and in inflation expectations, the much-ballyhooed relaunch of “accommodation” is conspicuously absent. There was a minor back up in yields between when the ECB signaled its intentions back in August and the few weeks immediately following the actual announcement. Other than that, and that wasn’t much, you wouldn’t have known QE is already back on the table. It barely registered, the massive program...

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Big Trouble In QE Paradise

Maybe it was a sign of things to come, a warning how it wasn’t going to go as planned. Then again, when it comes to something like quantitative easing there really is no plan. Other than to make it sound like there is one, that’s really the whole idea. Not what it really is and what it actually does, to make it appear like there’s substance to it. After experimenting with NIRP for the first time and then adding a bunch of sterilized asset purchases in 2014, Europe’s central bank was getting...

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China Returns, ECB Record, Fed Minutes and the Week Ahead

Many high-income countries experienced little growth but strong price pressures in the 1970s.   Since the mainstream economics said the two were mutually exclusive, a new term had to be created, hence stagflation.  Fast forward almost half a century later, and mainstream economists are still having a problem deciphering the linkages between prices and economic activity, such as inflation and employment. Theory needs to accommodate the new facts. Theory is being challenged in another...

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No Longer Hanging In, Europe May Have (Been) Broken Down

Mario Draghi can thank Jay Powell at his retirement party. The latter being so inept as to allow federal funds, of all things, to take hold of global financial attention, everyone quickly shifted and forgot what a mess the ECB’s QE restart had been. But it’s not really one or the other, is it? Once it actually finishes, the takeaway from all of September should be the world’s two most important central banks each botching their “accommodations.” It’s only a little weird how European QE was...

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A Bigger Boat

For every action there is a reaction. Not only is that Sir Isaac Newton’s third law, it’s also a statement about human nature. Unlike physics where causes and effects are near simultaneous, there is a time component to how we interact. In official capacities, even more so. Bureaucratic inertia means a lot more than just resistance to change, it also means, at times and in certain capacities, all sorts of biases. When the bureaucracy predicts one set of circumstance, it is as likely if not...

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Is The Negativity Overdone?

Give stimulus a chance, that’s the theme being set up for this week. After relentless buying across global bond markets distorting curves, upsetting politicians and the public alike, central bankers have responded en masse. There were more rate cuts around the world in August than there had been at any point since 2009. And there’s more to come. As Bloomberg reported late last week: Over the next 12 months, interest-rate swap markets have priced in around 58 more rate cuts, assuming central...

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Focus Shifts to North American Jobs Before Turning Back to Europe next Week

Overview:  Investors hope that the world took a step away from the abyss in recent days.  Developments in Hong Kong, US-China talking, a political and economic crisis in Italy appears to have been averted, and a risk of a no-deal Brexit has lessened.  Asia Pacific equities closed the week on a firm note and extended the rally the third week.  European shares are mixed today, but the Dow Jones Stoxx 600 is also posting its third consecutive weekly gain.  Back-to-back gaps higher have...

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