Interest Rate versus Gold: Interest Rate Wins Again
Gold is a non-yield bearing asset that reacts negatively to rises in the interest rate.
Securities
Market Realist has the latest news and analysis on debt securities, from bonds to exchange traded notes.
How Many Americans Quit Their Jobs in November?
As per the latest JOLTS report, about 3.2 million American workers quit their jobs voluntarily in November.
What November Job Openings Say about US Economy
As per the January JOLTS report, there were 5.9 million job openings at the end of November.
US Dollar Index and Treasury Yields Early on January 8
The US Dollar Index opened January 8 on a stronger note and traded at one-week high price levels in the early hours.
Why Consumer Expectations Continued to Increase in November
Consumer expectations for business conditions Average consumer expectations for business conditions form the only component of the Conference Board LEI (Leading Economic Index) that is not a leading indicator. Consumer expectations are based on two separate surveys. One survey is conducted by the University of Michigan and Reuters, while the second survey is conducted by […]
How the Leading Credit Index Tracks US Credit Conditions
Understanding the Leading Credit Index The Conference Board LCI (Leading Credit Index), a constituent in the LEI (Leading Economic Index), is published every month and tracks credit conditions in the US economy by following changes in six financial market instruments: the two-year swap (SHY) spread (real time) the three-month LIBOR[1.Intercontinental Exchange London Interbank Offered Rate] (SCHO) […]
Should We Worry about Rising Unemployment Claims?
Average weekly claims and the economy Average weekly unemployment claims are a constituent of the Conference Board LEI (Leading Economic Index). Claims have a 3% weight in the LEI. Weekly unemployment claims, if adjusted for seasonality, give investors a clear understanding of changes in the employment market. Though the Bureau of Labor Statistics releases a monthly […]
Analyzing the Yield Curve’s Ongoing Flatness
A December rate hike and a flattening yield curve The Fed rolled out another rate hike at its final meeting of 2017. The target range for the federal funds rate was increased by 0.25% to 1.25%–1.50%, and the Fed has signaled three more rate hikes in 2018. Two members dissented to the rate hike due to lower […]
US Dollar Index and Treasury Yields Early on January 4
After falling for two consecutive trading weeks, the US Dollar Index started this week on a weaker note and traded with mixed sentiment.
Will Gold Maintain Its Close Correlation to Inflation?
The rise in inflation could be a positive sign for the current scenario.
How the US Dollar Index and Treasury Yields Performed on December 28
The US Dollar Index broke its three-week-long gaining steak this week and fell to three-week low price levels on Wednesday.
All 4 Precious Metals Rose on December 20, 2017
All four precious metals had an up day on December 20, 2017. Gold increased 0.43% on the day and closed at $1,267.80 per ounce.
The Curious Case of Low Inflation in 2017
The last statement from the US Fed, which was released with its recent rate hike decision, cited lower levels of inflation but hopes that the inflation target could be achieved in 2018.
A Look at Capacity Utilization across US Industries in November
In the November capacity utilization report, the manufacturing sector remained strong with 76.4% capacity utilization, the highest level since May 2008.
Will US Unemployment Rate Fall below 4% in 2017?
A lower unemployment rate is one of the key objectives of the Fed. In 2017, the unemployment rate fell, reaching 4.1% in its latest November reading.
How the US Economy Performed in 2017
This year has been a year to watch the US economy. Hopes for change, tax reform, and industry-friendly policies drove the markets (SPY) higher.
US Dollar Index and Treasury Yields Are Stable in the Early Hours
After gaining for three trading weeks, the US Dollar Index started this week on a weaker note and fell in the first four trading days of the week.
US Dollar Index and Treasury Yields Rose in the Early Hours
After gaining for three consecutive trading weeks, the US Dollar Index started this week on a mixed note.
US Dollar Index is Weak in the Early Hours on December 15
The US Dollar Index traded with strength for two weeks and started this week on a mixed note amid the dented market sentiment.
How the Federal Reserve’s Rate Hike Affected Precious Metals
Precious metals and miners saw some relief on December 13 after the Fed raised rates as expected. Sibanye Gold (SBGL), Aurico Gold (AUQ), and Goldcorp (GG) rose 3.5%, 3.6%, and 5.8%, respectively.
Utilities Tend to Have Inverse Relationship with Interest Rates
On December 13, 2017, ten-year Treasury yields fell to 2.4%. The ten-year Treasury yields (TLT) reported a yearly high of 2.6% prior to the first rate hike in March 2017.
US Dollar Index Is Weak Early on December 13
In the early hours on Wednesday, the US Dollar Index is weak and trading below the opening prices. At 3:50 AM EST, it was trading at 94—a fall of 0.11%.
How Eager Are Precious Metals to Hear the Fed’s Decision?
Gold, silver, and platinum all had a down day on Tuesday, December 13, mainly due to speculations over the Federal Reserve’s pending interest rate decision.
The Primary Cause of Yield Curve Flattening
Interest rates and inflation The pace of interest rate hikes and inflation rate growth have a profound influence on the US yield curve. The US Fed has been communicating its intent to increase interest rates from the current ultra-low level to a target rate of 2.5% over the next few years. The conditions required for […]
What Leads to Yield Curves Flattening
Factors leading to yield curves flattening There are multiple factors that can affect the shape of yield curves. Bonds (BND) with different maturities react differently to changes in economic conditions and expectations. For example, when the US Fed announces an interest rate hike, short-term bonds (SHY), which are to the left side of a yield curve, react […]
Assessing the Risk of a Flattening Yield Curve
St. Louis Fed president and CEO James Bullard gave a presentation at a regional economic briefing on December 1. Throughout this series, we’ll analyze Bullard’s take on the risks of an inverted yield curve.
How Will Tax Cuts Impact the Federal Deficit?
The report from the Joint Committee on Taxation included an estimate of budgetary deficits for 2018–2027. Tax reforms could have a limited impact in 2018.
Tax Cuts and Rate Hikes Could Impact the Fed
The proposed tax cuts and the resulting increase in the federal deficit are expected to impact bond markets. It’s important to consider the Fed’s stance.
US Dollar Index and Treasury Yields Are Stable
The US Dollar Index started this week on a stronger note by rebounding on Monday. The US Dollar Index opened Tuesday on a stable note.
Fed’s November Beige Book and Restrained Hiring Plans
The inability of employers to find suitable workers is leading to wage increases, especially in the professional, technical (XLK), and production (XLI) sectors.
The Economic Indicators Covered by the Fed’s Beige Book
Comparing the economic performance with economic expectations and the previous cycles gives investors an idea of whether the economy is expanding or contracting.
US Dollar Index and Treasury Yields Are Strong
The US Dollar Index broke its three-week losing streak last week and regained stability. The US Dollar Index opened higher on Monday.
When the United States Sneezes, Will the World Catch a Cold?
Williams suggested that the monetary policy framework should be designed considering the global scenario rather than central banks looking at their economies in isolation.
The Problem with the Current Interest Rates
With global economies progressing toward normalcy or the “new normal,” as Williams called it, central banks are moving toward normalizing policy by signaling interest rate hikes.
San Francisco Fed John Williams and Monetary Policy Challenges
John Williams, president and CEO of the Federal Reserve Bank of San Francisco, spoke on November 16, 2017, at the 2017 Asia Economic Policy Conference in San Francisco.
The Leading Credit Index: October Update
The Leading Credit Index for October was reported to be -0.70, improving from the revised September reading of -0.64.
US Dollar Index and Treasury Yields Are Strong on November 30
In the early hours on November 30, the US Dollar Index is trading with strength above opening prices.
Understanding the Sharp Rise in Consumer Expectations in October
The November Conference Board LEI reported the average consumer expectations for business conditions for October at 0.96, a sharp increase from the September reading of 0.43.
Why Decreasing Credit Spreads Are a Cause for Concern
The November Conference Board report, which takes October data into account, reported the credit spread at ~1.2—an improvement from the September reading of ~1.1.
What Decreasing Weekly Unemployment Claims Say about the US Economy
In the Conference Board Leading Economic Index, the average weekly unemployment claims have 3.0% weight.
The FOMC’s View of the Equity and Bond Markets
The FOMC’s November meeting minutes deemed the bond market’s yield curve to be flattening between meetings. The report indicated that bond yields have risen since the September FOMC meeting for multiple reasons.
The FOMC’s Outlook for the US Economy
As per economic projections prepared by the FOMC, US real GDP is expected to improve in the final quarter of this year.
The FOMC’s View on the US Economy
At the November meeting, the FOMC staff review indicated that US labor market conditions continued to strengthen and that the US economy continued to expand at a solid pace.
The November FOMC Meeting Minutes: Must-Knows
The last Federal Open Market Committee (or FOMC) meeting took place on October 31–November 1. The target range for the federal funds rate stayed unchanged at 1%–1.25%.
US Dollar Index Is Weak in the Early Hours on November 27
The US Dollar Index started this week on a weaker note and traded below the opening prices in the early hours on Monday.
US Dollar Index Weak in The Early Hours of November 23
US Dollar Index The US Dollar Index has been weak for two consecutive trading weeks, and started this week on a mixed note. The index lost strength as the week progressed and fell to four-week lows on Wednesday. The US Dollar Index opened the day with weakness on Thursday. Market sentiment Market sentiment towards the US Dollar Index was […]
US Dollar Index Consolidates in the Early Hours
In the early hours on November 22, the US Dollar Index is trading with weakness below the opening prices.
Reading the Trends in Capacity Utilization across US Industries in October
Among the key macroeconomic indicators published by the Fed, capacity utilization in US industries helps investors forecast business cycle changes.
US Dollar Index is Stable in the Early Hours on November 20
The US Dollar Index opened on a stronger note on November 20. However, the dollar lost strength as the day progressed.
Chart in Focus: The Consumer Price Index Rose in October
The Fed is expected to increase the target funds rate by 0.25% at its December meeting.