Chillin' out till it needs to be funded
The week’s already on with the pre FOMC trades in the Yen keeping it afloat at 94 levels even as the Dollar spiked further. It is a bit unexpected for Dollar to move up before yields start the upward climb again for the Tapering has rounded the bend and facing Global Financial Markets as much or more than the domestic fronts. A busy Tuesday with Housing data releases from May with Housing Starts and Building permits data tomorrow pushes a verdict on to Fed watchers looking for answers to the Tapering calendar while lauding the recovery data along. Mid week, Julian Assange fate will also be known after he completes a year in the Ecuador embassy in London
Last week’s PPI/inflation data was almost encouraging but inventories of crude and Oil could continue higher this week as EIA reported last week at almost 3 B Tons of crude and gas(oline) and retail outlook remain only mildly positive for June. Meanwhile Carney’s Canadian sojourn seems to have left a good appetite in Canadian stocks and bonds.
The US Wealth report showed instead the median of wealth per household falling to 1/6th its levels even as the number crossed into all time highs to ‘complete’ the recovery last week. That means most American households are poorer on the average irregardless of the Economic cycle and the crash as the trend has continued since tax structures changed back in the 80s.
The crisis impact continues to be limited to Americans driving less to work on average and US home prices, though already inviting flippers are much lower than benchmarks shot in China which also reports home prices this week even as FDI continues unabated in China, awaiting it to complete the turn into domestic consumption led growth Economy.
Last week marked a flight of 54 bln from us Treasuries as Japan exited over $330 Bln in bonds, while Foreign portfolios bought into US worth $12.7 Bln while the selling down of US bonds led $37 b out of the US in purchase of foreign securities. Thursday’s auction yields were 2.21% 10 Y ields have since droped to near 2.1 levels today while European yields were much higher thrugh the week, the Euro instead climbing higher through the week to start today at 1.34 levels.
The landmark annual June meet of Hedgehogs starts today in Monaco, a watershed for the Global shadow banking community, taking a call again on Europe, Japan and perhaps even more of China again.
India trade data in the meantime managed to look even stevens with a $24 B score for Exports despite the continuing contraction in Trade with Europe except Netherlands and the Rupee marked a new range around 58 levels dissuading the Central Bank from further rate cuts as Global Oil prices stabilised around 105 levels for Brent. The Non oil imports stretched the deficit in April May 2013 for a change as oil imports stayed par for the course at around $16 B