Eurodollar University

After a weekend of disappointing macro data (which was characterized as "mixed"), China's markets tanked. Not stocks, of course, instead more record lows in bonds plus a very sharp drop in CNY. As we know only too well, CNY DOWN = BAD and yuan is right back near multi-year lows. It's not the only one, either. 

Eurodollar University's Money & Macro Analysis

WEBINAR DEC 11 w/Jim Rickards
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Bloomberg China’s Factory Activity Expands in Sign of Slow Recovery
https://www.bloomberg.com/news/articles/2024-11-30/china-s-factory-activity-continues-expansion-in-sign-of-recovery

Bloomberg China’s 10-Year Yield Sinks to Record Low on Bets PBOC Will Ease
https://www.bloomberg.com/news/articles/2024-12-02/china-s-10-year-yield-is-heading-toward-record-2-on-easing-bets

Bloomberg China Skips Politburo Readout as Investors Await Stimulus
https://www.bloomberg.com/news/articles/2024-12-02/china-skips-politburo-readout-as-investors-await-stimulus-clues

Bloomberg China Home Sales Drop Again as Sustained Stimulus Effect Missing
https://www.bloomberg.com/news/articles/2024-11-30/china-home-sales-drop-again-as-sustained-stimulus-effect-missing

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European banks have added a massive amount of government bonds to their holdings. At the same time, they refuse to lend into the real economy. Europe's depositories are hardly alone as we see the same defensive behavior all over the global system. There is only one reason why they all have become so incredibly defensive. 

Eurodollar University's conversation w/Steve Van Metre

WEBINAR DEC 11 w/Jim Rickards
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Black Friday/Cyber Monday Sale at Eurodollar University
https://www.eurodollar.university/black-friday

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India's RBI just recently has gone *massively* short the US dollar and in the NDF market, too, just to keep the crumbling rupee from sinking even more. This won't work exposing the central bank to losses and also potentially amplifying the downdraft in the currency. A big update on the fundamentals explains.

Eurodollar University's Money & Macro Analysis

Bloomberg India Plows Into NDF Market as It Fights Back Against Dollar
https://www.bloomberg.com/news/articles/2024-11-29/india-plows-into-ndf-market-as-it-fights-back-against-dollar

Bloomberg India’s Growth Shocker Puts Pressure on RBI to Cut Rates
https://www.bloomberg.com/news/articles/2024-11-29/india-s-economic-growth-weakens-to-almost-two-year-low

Bloomberg India’s Falling Wages Squeeze Urban Middle Class and Economy
https://www.bloomberg.com/news/articles/2024-11-29/india-s-falling-wages-squeezes-urban-middle-class-and-economy

Bloomberg RBI Inquiries on Liquidity Spur Speculation of Action Next Week
https://www.bloomberg.com/news/articles/2024-11-29/rbi-inquiries-on-liquidity-spur-speculation-of-action-next-week

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An entire batch of corporate reports from retailers to computer-makers, just in time for the key holiday season's critical moment. Each one warning that consumers in the US just aren't there, being held back. Why? The government also reported today with the answer to that question, the one factor that ties it all together. 

Eurodollar University's Money & Macro Analysis

Bloomberg Inflation-Battered Consumers Are Going to Extreme Lengths to Nab Holiday Deals
https://www.bloomberg.com/news/articles/2024-11-27/black-friday-deals-in-us-have-been-transformed-by-inflation

Bloomberg Kohl’s Troubles Deepen as Retailers Call Out Weak Spending
https://www.bloomberg.com/news/articles/2024-11-26/kohl-s-cuts-sales-outlook-on-weaker-spending-on-clothes-shoes

CNBC Retailers saw a dismal fall quarter. 
https://www.nbcnews.com/business/business-news/consumers-retailers-post-election-economic-outlook-rcna181794

CNBC HP forecasts first-quarter profit below estimates on sluggish demand in PC market
https://www.cnbc.com/2024/11/26/hp-earnings-report-q4-2024.html

Bloomberg Dell and HP Inc. Fall After Reporting Disappointing PC Sales
https://www.bloomberg.com/news/articles/2024-11-26/dell-reports-sales-that-miss-estimates-on-setback-for-pc-market

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Japan's yen has diverged from other currencies over the past few weeks, strengthening against the dollar. That suggests more carry trading dynamics, an interplay between different versions of them. Yes, there is more than one carry trade and understanding the distinctions is key to getting a sense of possible vulnerabilities here.

Eurodollar University's Money & Macro Analysis

WEBINAR DEC 11 w/Jim Rickards
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Reuters Explainer: What are Japan's tactics based on latest suspected intervention?
https://www.reuters.com/markets/asia/what-are-japans-tactics-based-latest-suspected-intervention-2024-07-18

BIS Bulletin The market turbulence and carry trade unwind of August 2024
https://www.bis.org/publ/bisbull90.pdf

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Several critical financial measures continue to drop, reaching rather obscene comparisons. At first, that doesn't seem to make any sense; how would today be seen as similar to February 2009, for example. However difficult the economy is now, it certainly isn't that bad. What these measures are indicating go beyond specific moments, instead providing clues about a progression. 

Eurodollar University's Money & Macro Analysis

WEBINAR DEC 11 w/Jim Rickards
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https://www.eurodollar.university
Twitter: https://twitter.com/JeffSnider_EDU

Is the bond selloff over? What caused it in the first place? With European rates, in particular, heading lower on recession (more than) risks, the tendency of Treasuries to converge with them raises the chances yields may not have much farther to go if they aren't topped out already. Given the fundamental background, it appears to be a matter of time more than anything. 

Eurodollar University's conversation w/Steve Van Metre

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The European situation is getting to be truly serious. And that means growing problems for...the dollar. Not the exchange value against other currencies, rather why that exchange value is rising and how trouble in Europe means trouble in global money. European banks have been back in a big way at the black hole's center. 

Eurodollar University's Money & Macro Analysis

President Ford Economic Report to Congress 1975
https://www.presidency.ucsb.edu/sites/default/files/books/presidential-documents-archive-guidebook/the-economic-report-of-the-president-truman-1947-obama-2017/1975.pdf

ECB Financial Stability Review
https://www.ecb.europa.eu/pub/pdf/fsr/ecb.fsr202411~dd60fc02c3.en.pdf

ECB Euro area banks as intermediators of US dollar liquidity via repo and FX swap markets
https://www.ecb.europa.eu/press/financial-stability-publications/fsr/focus/2024/html/ecb.fsrbox202411_04~9a4d04b582.en.html

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China and Japan selling record amounts of Treasuries. Do they hate the dollar? Donald Trump? You and me? Not only will we answer the questions, while those countries saw huge selling of USTs, curiously the Cayman Islands got a truly massive deposit of them and it showed up during July, August and September. Seems very carry trade-y. 

Eurodollar University's Money & Macro Analysis

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A double whammy on US consumers. First, the government issued an alarming update to the biggest jobs data there is. Then retail giant Target stunned with its Q3 results and more so its guidance for Q4. The thing is, both of those are related; two sides of the macro coin. The one says the summer started really badly, the other it didn't get better. 

Eurodollar University's Money & Macro Analysis

Reuters Target raises 2024 profit forecast as price cuts draw shoppers
https://www.reuters.com/business/retail-consumer/target-raises-annual-profit-forecast-after-price-cuts-boost-quarterly-sales-2024-08-21/

CNBC Target shares plunge 20% after discounter cuts forecast, posts biggest earnings miss in two years
https://www.cnbc.com/2024/11/20/target-tgt-q3-2024-earnings.html

Bloomberg Target Shares Tumble After Retailer Cuts Profit Outlook
https://www.bloomberg.com/news/articles/2024-11-20/target-tgt-trims-profit-outlook-on-inventory-buildup-higher-costs

CNN As Americans bargain shop, six-figure earners flock to Walmart
https://www.cnn.com/2024/11/19/investing/walmart-stock-earnings/index.html

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