Mideast Turmoil: Follow The Oil, Follow The Money
Authored by Charles Hugh Smith via OfTwoMinds blog,
In this scenario, time is running out for Saudi Arabia's free-spending royalty and state - and for all the other free-spending oil exporters.
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Treasury Yield Curve Crashes To New 10Y Lows After Hotter-Than-Expected PPI
With a December rate-hike baked into the cake (odds as close to 100% as possible), the hotter-than-expected PPI print has sparked notable outperformance in the long-end (amid Fed-driven slowdown fears) sending the yield curve to new cycle flats - flattest since 2007...
The last two times the yield curve was this flat, the US economy was in recession...
As a reminder, it took The Fed driving rates up to 5.25% before financial conditions finally snapped tighter...
Producer Prices Surge At Fastest Rate In Almost 6 Years
Following September's hotter-than-expected Core PPI (and 5Y high in PPI), October was expected to see a modest slowdown but headline PPI printed a massive 2.8% YoY (smashing the 2.4% exp). This is the hottest PPI since Jan 2012, driven by surges in fuel prices and drugs.
Core PPI also beat expectations, rising 2.4% YoY (vs 2.2% exp) - also the highest since Feb 2012...
Under the hood...
"There Are Too Many Warning Signs": Why One Trader Thinks Stocks Are Set To Slide In The Coming Days
From the latest Macro View edition by Bloomberg macro commentator and former Lehman trader, Mark Cudmore
Stock markets look set to continue to slide in the days ahead.
There are too many small warning signs building up at a vulnerable time for markets. Just because a 3% correction hasn’t happened for a long time doesn’t mean that one isn’t possible. Quite to the contrary, it suggests there are a lot of complacent longs that may over-react to a pullback.
German Q3 GDP Growth Smashes Expectations
German GDP growth for Q3 2017 printed at 0.8% Q/Q, easily beating the consensus estimate of 0.6%, which was in line with growth in the previous quarter, driven by fixed capital formation amid stable household and government consumption. While year-on-year GDP growth was reported as 2.3%, the underlying growth was 2.8% after adjusting for calendar effects. The data confirmed that German growth was on track for its best year since 2011, and pushed the EUR higher for the fifth day, rising above 1.1700 for the first time in 3 weeks.
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