Tag Archives: Bank of Canada

The US yield curve isn’t the only one on the precipice. There are any number of them that are getting attention for all the wrong reasons. At least those rationalizations provided by mainstream Economists and the central bankers they parrot. As noted yesterday, the UST 2s10s is now the most requested data out of FRED. It’s not just that the UST curve is askew, it’s more important given how many of them are. Look to our...

The German Social Democrats have endorsed the Grand Coalition, ending the period of political uncertainty and paralysis in Germany since the last September’s election. The polls have suggested nearly 60% of the SPD would support joining the government and the actual outcome looks to be closer to 66%. In 2013, when the SPD had a similar vote, three-quarters favored a Grand Coalition. Among the differences is that the SPD...

Summary: Divergence between US and Canada’s two-year rates is key for USD-CAD exchange rate. Canada’s 2 hikes in Q3 were not part of a sustained tightening sequence. Policy mix considerations also favor the greenback if US policy becomes more stimulative. Many observers saw Canada as one of the canaries in the coal mine, warning that the divergence theme was over.  The Bank of Canada did hike rates twice in...

Summary: Busy week of economic data and central bank meetings, and reaction to Spanish developments and Japan and Czech elections. Focus below is on the Bank of Canada and ECB meetings and tax reform in the US. The biggest challenge to tax reform is unlikely on the committee level but on the floor votes, especially in the Senate, in a similar way the stymied health care reform. US and German 2-year rates are...

This week attention will fall on US FOMC rate decision, BoJ policy rate announcement, German and NZ elections. Economic data releases include PMI in the Euro area, retail sales in the UK and existing home sales in US. In Emerging Markets, there are monetary policy meetings in South Africa, Indonesia, Hungary, Taiwan and Philippines. BofA highlights the week's key global events: Central bank meetings: US FOMC and BoJ The Fed will make policy announcement on Wednesday. Balance sheet...

In the early throes of economic devastation in 1931, Sweden found itself particularly vulnerable to any number of destabilizing factors. The global economy had been hit by depression, and the Great Contraction was bearing down on the Swedish monetary system. The krona had always been linked to the British pound, so that when the Bank of England removed gold convertibility (left the gold standard) from its...

The US created 209k jobs in July and jobs growth in June was revised higher (+9k) to 231k. The underemployment rate was unchanged at 8.6%. United States Nonfarm payrolls The 287k nonfarm payroll growth in June (265k private sector) will ease fears that the US is headed for a recession.  That type of jobs growth, and the stronger than expected, service sector ISM earlier this week, are not consistent with a...

U.S. index futures point slightly lower open. Asian shares rose while stocks in Europe fell as energy producers got caught in a downdraft in oil prices and reversed an earlier gain after Goldman unexpectedly warned that WTI could slide below $40 absent "show and awe" from OPEC. The dollar rose, hitting a four-month high against the yen and bonds and top emerging market currencies were back under pressure on Tuesday, following last week’s hawkish rhetoric from central bankers. Nonetheless,...

The US created 211k net new jobs in April, a sharp bounce back from the downwardly revised 79k gain in March.  It is the third month this year that the US created more than 200k new jobs. United States Nonfarm payrolls Government payrolls increased by 17k.  As we noted with the Administration’s federal hiring freeze, the real growth in government employment is on the state and local level.  In April the federal...

In February 2017 while preparing for a presentation in Gothenburg about central bank gold, I emailed Sweden’s central bank, the Riksbank, enquiring whether the Riksbank physically audits Sweden’s gold and whether it would provide me with a gold bar weight list of Sweden’s gold reserves (gold bar holdings). The Swedish official gold reserves are significant and amount to 125.7 tonnes, making the Swedish nation the...