Chillin' out till it needs to be funded
As measured by interest in the Dollar and US Treasuries, the likelihood of a global all pervasive recession has inched closest to one, far ahead of what it as in 2008 when the expectations were sitting with pundits, market insiders and bank managers and mostly discredited economists who had been looking for a recession and a housing bubble collapse since 2006 itself
US Treasuries and Dollar indices are already at 1.5% and 83 levels, a bottom for the 10 Y Treasuries and very near the all time peak for the US Dollar. With the 30 Y rates at an all time low for mortgages and 15 year rates below 3%, contracts signed still went down in new data last week even as prices shore up near the bottom. Employment data was abysmal and there is one more US item of data on Monday for Factory Orders before we move on to Burning Tueday with European PMIs comparing with Germany for whose been hurt the most.
After the respite thereon from the ISM Services index on Tuesday, we move on to more debates on austerity with the ECB meetings and rate announcements on Wednesday, 6th . European GDP pronouncements come earlier in the morning and Australian and Japanese data starts trickling in at day end. The UK BoE MPC announcement actually comes on Thursday with poolicy rates staying on hold. Though we expect a monetary hold to also come from the ECB other announcements can be expected. Morgan Stanley is however pushing for a rate cut on Wednesday by when the Euro may have stabilised globally at lower levels.
The rest of the week is more optimistic data from France, UK and Italy while Chinese pronouncement watchers ill have their hands full on Wednesday. US data remains the same with more of Jobless Claims Thursday, The Fed update and important Consumer credit data to reconfirm if Commercial banking or Consumer lending has picked up in May on Thursday. Friday follows with more monthly data for Exports and imports and Wholesale Trade Inventories which will underperform after being expected to jump 1%. Canadian data may also provide some fuel for US recovery on Friday.