Eurodollar University

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

A lot of people are asking if the Fed now regrets cutting rates by 50 bps in September, or maybe cutting at all. Recent data make it seem as though the soft landing never went anywhere, plus what appears to be happening with market interest rates. In truth, every part of this Fed "regret" trend is wrong, starting with the view from the central bank itself. Eurodollar University's Money & Macro AnalysisFederal Reserve Beige Bookshttps://www.federalreserve.gov/monetarypolicy/publications/beige-book-default.htmFOMC Chair Powell Press Conference September 2024https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20240918.pdfBloomberg Fed’s Beige Book Shows Little Growth Across Most of UShttps://www.bloomberg.com/news/articles/2024-10-23/fed-s-beige-book-shows-little-economic-growth-across-most-of-ushttps://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Another central bank moves up its rate cut plans, accelerating its rate reductions with a 50-bps cut. At the same time the IMF lowers growth projections and warns risks of more downside are rising. These two developments are related to the same thing. It's becoming clearer where this weakness is coming from and that's why the public sector is starting to become more aggressive. Eurodollar University's Money & Macro AnalysisBank of Canada October 2024 Monetary Policy Reporthttps://www.bankofcanada.ca/wp-content/uploads/2024/10/mpr-2024-10-23.pdfBloomberg IMF Lowers Global Growth Forecast, Warns of Increasing Riskshttps://www.bloomberg.com/news/articles/2024-10-22/imf-lowers-global-growth-forecast-warns-of-increasing-risksIMF WEO October 2024 Policy Pivot, Rising Threatshttps://www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Huge thanks to Eric Basmajian and train-traveler Mike Green for answering member questions. Member/Subscriber Live Q&A recorded October 22, 2024.