The outlook for recession is still pretty high
|Outlook:
The outlook for recession is still pretty high, with estimates ranging from 25% to 95% among various economists, who are hindered by all the uncertainty created by the erratic moves misnamed "policies" coming out of Washington.
But for reasons that we fail to understand, the 2-10 year yield curve recovery is persisting. This is better news than it seems at first, not only because it pushes off the prospect of negative rates (see above) but also because it calms the Mismanager-in-Chief. Trump has no idea what a yield curve is, of course, but Kudlow can keep up the mostly false reassurance that a recession is not on its way in the year Trump seeks re-election. If Trump thinks a recession is a dead cert, heaven only knows what nonsense he would rain down on us.
We get a ton of data, starting with retail sales (probably a small loss), inventories, TICS and the Beige Book. We may think business inventories are a yawn but the Atlanta Fed examines that data very closely as a harbinger of current sentiment and harbinger of future plans. We will get a new Atlanta Fed GDP forecast later today. It was 1.7% as of Oct 9th.
We see choppiness and volatility and whipsaws pretty much everywhere. The most stable currency is the Swiss franc and it's not rising as a safe haven is supposed to do. We think risk aversion should be on the rise but evidently it faces nice headwinds from the un-inversion of the yield curve and blind faith. We can't read some charts—like the CAD. If we can't read them to come up with a 12-hour forecast, it means conditions are swirly and whirly. Get out? Unless you have deep pockets and nimble fingers, yes.
Politics: The debate last evening of the 12 Dem candidate was awfully hard to watch. Biden fumbled. Warren sounds whiny and not credible on tax issue of paying for Medicare for all. Bernie was Bernie. The only surprise was a far more likable Klobuchar. We still think Mayor Pete has the chops. We await the number of viewers. The June debate has 18.1 million. August had 10.7 million. With Trump inching closer to impeachment with every passing day and another insider testifying, you'd think public interest would be on the rise.
This is an excerpt from “The Rockefeller Morning Briefing,” which is far larger (about 10 pages). The Briefing has been published every day for over 25 years and represents experienced analysis and insight. The report offers deep background and is not intended to guide FX trading. Rockefeller produces other reports (in spot and futures) for trading purposes.
To get a free trial, please write to ber@rts-forex.com and you will be added to the mailing list..
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.