Submitted by Anatole Kaletsky, originally posted at Project Syndicate,
For the first time since last October, the price of a barrel of oil has broken through $50. So it seems a good time to update the analysis I presented in January 2015.
When the main economic event this week hits this Friday at 8:30 am EDT, when the BLS releases the May payrolls report, Wall Street consensus wil be expecting a 160,000 print, a number which will have a big impact on market expectations for a Fed rate hike at the June or July FOMC meeting. However, consensus may be disappointed for one reason: the Verizon strike could chop off as much as 35,000 workers from the headline payrolls print.
With the US closed for Memorial Day and UK markets offline due to a bank holiday, overnight volumes have been weaker than normal on little newsflow. The main story remains the stronger USD following Yellen's hawkish Friday speech, which not only led to the lowest Yuan fixing since February 2011...
... but pushed the USDJPY almost as high as 111.50 overnight before paring gains, however it was enough to send the Nikkei 1.4% higher.
We have tracked the problems of recently junked Noble Group - Asia's largest commodity trader - extensively over the past year (see "Noble Group’s Kurtosis Awakening Moment For The Commodity Markets", "Junk Isn't Very Noble: Asia's Largest Commodity Trader Responds To Moody's Downgrade", "Noble Group’s Cliffhanger", "Noble Group’s "Collateral Margin Call", "Noble Group's "Margin Call" Part II: The Enron Moment").
Authored by Paul Craig Roberts,
As Our Past Wars Are Glorified This Memorial Day Weekend, Give Some Thought To Our Prospects Against The Russians And Chinese In World War III