Steno Signals

While we are waiting for Godot and his assessment of Payrolls, we take a look at Chinese momentum in the context of declining demand in the West. Are the wheels coming off in China?

This week’s job report will likely decide whether 25 or 50 bp is most likely in September.. Is the crowd of wall street economists getting too worried or too upbeat? The entire crowd of economists agree that July was a fluke.

The latest Ifo data suggests an imminent recession in Germany, with expectations of slowing growth and inflation as autumn approaches. Despite concerning trends, high frequency and robust data provide a basis for cautious optimism, indicating stable conditions.

In a relatively quiet data week, we are on revisions watch. The second release of the US GDP report from the second quarter is out, and with the cat out of the bag the revisions will be heavily scrutinized.

Will Powell use the labor market as an excuse to cut rates quickly, while Ueda discusses raising rates in Japan? The QCEW-based revisions could give the Fed enough justification if they decide to move swiftly, even though the quality of QCEW data has been mixed lately.

Chinese monetary authorities are fighting against gravitational forces when pushing for higher bond yields. Meanwhile, investors keep piling into bonds, while they are selling stocks. Credit growth is too weak to do otherwise!

The coming week is all about determining whether this is truly a recessionary meltdown or not, with the credit cycle and the ISM survey providing some much-needed clues. The credit cycle does NOT look recessionary as of now, but liquidity could turn abruptly worse.

Recessions differ in their impact depending on whether they are real or nominal, with the latter obviously being worse. Markets keep forgetting the nominal vs. real discussion this cycle, while the liquidity outlook is becoming increasingly mysterious.

Full focus on USDJPY ahead of a crucial central bank week. Will the BoJ confirm the turning tide and will get help by the Fed? In Europe, we are on inflation watch in France.

Are US cycle indicators rebounding right, left and center in coming months, and will inflation expectations follow? It sure looks like it from our model package. Meanwhile, don’t expect the Chinese rate cut to lead to metals buying.

There is currently a lot of focus on the US cycle and whether it is weakening sufficiently to prompt a 150-200 bps cutting cycle, and potentially even a 50 bp cut in September. Here are five charts showing that the US economy is improving.

This week’s edition of Great Game following a remarkable weekend. While we cover the Trump assassination attempt elsewhere, today we’ll concentrate on the political repercussions and discuss other pertinent issues, such as the Chinese Policy Plenary.

Will the UK economy keep delivering out of the ordinary inflation numbers despite the disinflation seen elsewhere, and will the US consumer rise from the weather abyss seen in April/May? Let’s have a look at the week ahead!

Inflation data from the US will take center stage this week after a week of weak growth gauges. Will the US momentum look stagflationary or smell of temporary Goldilocks?

The recession chatter is back in the US, and for good reasons. The big question is whether it will matter at all for markets. Here’s a list of indicators you need to watch to assess when or if to turn bearish.