Eurodollar University

Financial markets are experiencing contrasting emotions, with some riding high on election euphoria while a crucial global indicator shows alarming declines. The discussion dives into interest rate swaps and their evolving role in predicting economic futures. These instruments are not just numbers; they signal potential recessions and ongoing rate drops. The implications are profound as analysts warn about the nuances of the current financial landscape and the potential impacts of political shifts.

Demand for gasoil, the basic fuel which runs the entire modern world, is actually declining. Having stumbled over the summer, this exceptionally rare development is another really negative sign to go with, relatedly, even more production and job cuts across the auto industry. Energy, autos, economy. Eurodollar University's Money & Macro AnalysisBloomberg Diesel Set For Growing Glut as Demand Faltershttps://www.bloomberg.com/news/articles/2024-11-05/diesel-set-for-growing-glut-as-demand-faltersWorld Bank Commodity Markets Outlookhttps://openknowledge.worldbank.org/server/api/core/bitstreams/bbda9ad3-4f12-4626-ad4b-94a4d20fbd52/contentBloomberg OPEC Cuts Global Oil Demand Growth Forecasts for Third Consecutive Monthhttps://www.bloomberg.com/news/articles/2024-10-14/opec-cuts-global-oil-demand-growth-forecasts-for-third-consecutive-monthOPEC June 2https://www.opec.org/opec_web/en/press_room/7339.htmOPEC Sept 5https://www.opec.org/opec_web/en/press_room/7369.htmOPEC Nov 3https://www.opec.org/opec_web/en/press_room/7409.htmBloomberg Even Some High-Income Americans Can’t Afford New Cars Anymorehttps://www.bloomberg.com/news/articles/2024-11-04/soaring-2024-new-car-prices-turn-more-buyers-toward-used-vehiclesNikkei Nissan cutting production of main U.S. models by 30%https://asia.nikkei.com/Business/Automobiles/Nissan-cutting-production-of-main-U.S.-models-by-30Guru Focus Nissan Cuts Production Amid Declining U.S. Demand, Threatening Global Sales Goalshttps://www.gurufocus.com/news/2582356/nissan-cuts-production-amid-declining-us-demand-threatening-global-sales-goalsEuroNews Thousands of jobs to go at German car parts maker Schaefflerhttps://www.euronews.com/business/2024/11/05/thousands-of-jobs-to-go-at-german-car-parts-maker-schaefflerhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Why are interest rates rising at one end of the yield at the same time falling on the opposite side? With more recession data coming in all the time, starting with payrolls, it seems as though there should be a uniform response from the marketplace. But that's not how steepening works. Eurodollar University's Money & Macro AnalysisWashington PostHouse Passes Bush Tax Cuthttps://www.washingtonpost.com/archive/politics/2001/03/09/house-passes-bush-tax-cut/99152799-f156-414f-82c4-bed4fca05bb3/Time ‘The Worst Is Over’https://time.com/archive/6917914/the-worst-is-over/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

October payrolls were exceptionally weak, yet LT rates jump? With more rate cuts from the Fed basically assured, questions swirl around the Treasury selloff having many people wondering if there is a 'Trump trade' going on here. The answers are right there in front of us.Eurodollar University's conversation w/Steve Van Metrehttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

This isn't about October or hurricanes. Government just confirmed jobs market is in big f-ing trouble. Eurodollar University's Money & Macro AnalysisBLS Employment Situation October 2024https://www.bls.gov/news.release/archives/empsit_11012024.pdfCNN Messy October jobs report muddied by strikes and storms ahead of Election Day https://www.cnn.com/business/live-news/us-jobs-report-october-11-01-24/index.htmlhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

The government's latest data confirms the dramatic slowdown sweeping across the labor market. We've been documenting hours being cut, quitters quitting quits, no one hiring, and now even a few layoffs. Not only do the latest figures back all that up, they also help explain consumer behavior and even the last GDP estimate. Eurodollar University's Money & Macro AnalysisCNBC Ford guides to low end of 2024 earnings forecast as it slightly tops Wall Street’s third-quarter expectationshttps://www.cnbc.com/2024/10/28/ford-motor-f-earnings-q3-2024.htmlFord Q3 https://media.ford.com/content/fordmedia/fna/us/en/news/2024/10/28/third-quarter-2024-financial-results.htmlChallenger Gray & Christmas October 2024https://www.challengergray.com/blog/job-cuts-fall-in-october-2024-but-ytd-up-4-from-last-year/https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Another seemingly solid US GDP report for the books thanks in large part to a huge allotment of missiles. Does this mean the soft landing has been achieved?  Even if it has been achieved, we wouldn't know it from GDP data. Instead, history shows cyclical changes all look decent just before them. The latest quarterly data is not just comparable, it is, surprisingly, worse than every other period entering recession.Eurodollar University's Money & Macro Analysishttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Repo fails make sense being an indicator of collateral difficulties. Same for the 4-week US Treasury bill rate when it falls substantially. But how does Japanese government bill yields fit into the US$ repo picture? And why are they such a solid fit for it? The answer lies in the carry trade and what it means for funding markets as well as US recession risks. Eurodollar University's Money & Macro AnalysisBloomberg Mizuho Buys ‘Safe’ Assets on Risk That US Soft Landing Failshttps://www.bloomberg.com/news/articles/2024-10-08/mizuho-buys-safe-assets-to-cut-damage-if-us-soft-landing-failshttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Some unexpected bad news out of South Korea has implications for AI and a lot more. The investment boom triggered by ChatGPT has been a critical support for especially the Asian economy. Now there are signs it is cooling off along with a further setback in autos. Inopportune timing, to say the least.  Eurodollar University's conversation w/Steve Van MetreBloomberg South Korea’s Economy Ekes Out Growth as BOK Assesses Riskshttps://www.bloomberg.com/news/articles/2024-10-23/south-korea-s-economy-ekes-out-growth-to-emerge-from-contractionhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Gold continues to soar to record highs, but why? Most will say inflation though bullion is actually a terrible inflation hedge. The reason why many people believe this is the one time during the Great Inflation. Gold's run in the seventies was instead about what happened in the sixties long before the inflation. And it's the same thing - the other end of it - that we're seeing today. Eurodollar University's Money & Macro AnalysisFRB Boston Bretton Woods Conference 1984https://www.bostonfed.org/-/media/Documents/conference/28/conf28.pdfAlan Greenspan Testimony Before the Committee on Banking and Financial Services, U.S. House of Representatives July 24, 1998https://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htmhttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU