Business

Since Janet Yellen last spoke (shifting hawkish), the dollar and bond yields have surged (as have the odds of a Dec rate-hike).

Since Yellen last spoke...

It is unclear whether today's opening remarks at the fifth annual Community Banking in the 21st Century conference at the Federal Reserve Bank of St. Louis, will offer any new insights on monetary policy direction but given President Trump's 'shortlist', it may well be among her last public appearances as Fed Chair.

A new study of public pension returns by Cliffwater LLC has found that the median U.S. state pension plan returned just 5.9% annually over the 10 years ended June 30, 2016.  Meanwhile, as Pension and Investments notes, the top performing state pension, the $15.6 billion Oklahoma Teachers' Retirement System, was the only fund that managed to eek out a return over 7% during the same period.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Few seem to ponder what global shortages in key commodities might do to prices.

If there is any economic truism that is accepted by virtually everyone, it's that inflation is low and will stay low into the foreseeable future. The reasons are numerous: technology is deflationary, globalization is deflationary, central banks will keep interest rates near-zero essentially forever, and so on.

WTI/RBOB prices recovered from their drop after API reported a big surprise gasoline build overnight ahead of the DOE data which showed a major crude draw (and smaller than API-reported build in gasoline). Along with no change in production, this sparked buying in both WTI/RBOB as the kneejerk reaction.

API

After the schizophrenic manufacturing data (ISM 13yr highs, PMI unch YoY), Services data was just as fucking ridiculous!

UK and EU Services PMIs rose (and beat expectations) but US' September PMI dropped from 56.0 to 55.3.

Markit's Services PMI dropped to 55.3 (dragging the composite index lower) as inflationary pressures intensify (highest in 3 years), and future optimism is at its lowest since February.