Well here we are, a month after liftoff and the world's on fire again, just as it was in late August.
So far in 2016 we've seen continued pressure on crude and just as we saw late last summer, there's big trouble in little China.
Meanwhile, US markets got off to an inauspicious start in 2016 logging what for a time was the worst start to a year in market history.
Surging bonds and bullion and slumping stocks was not what Janet had in mind so she had some 'splaining to do. Hopes for a "passive hawkish" note appear to be met as confirmation of dismal data dependence offers just enough dovishness for the stock bulls and just enough hawkishness for economy bulls.
While the odds of a rate hike have collapsed since The Fed's decision to hike rates in the middle of an industrial and earnings recession, the odds of a rate cut remain non-negligible.
As investors await the Fed’s announcement following today’s FOMC meeting, Bloomberg's Richard Breslow they have a conundrum. No change in rates is expected. That is pretty much taken as a given. But we have to add the sub-clause: in either direction. What an interesting concept.
While many were surprised when yesterday's 2 Year auction saw absolutely blistering demand, including a near record Indirect take down and a yield stopping deeply through the When Issued, none of that was on display in today's 5 Year auction which concluded moments ago when the Treasury sold $35 billion of Cusip N89 at a yield of 1.496%. The problem: this was 0.9 bps wide of the When Issued and the biggest tail since June 2015. Then again, as SMRA notes, "Five-year note auctions have a tendency to stop fairly wide of the 100pm WI bid side though - in both directions."
Submitted by Pater Tenebrarum via Acting-Man.com,
Gross Output Remains Under Pressure