Almost exactly 1 year ago US 10 year bond yields hit 5% and all hell broke loose. We wrote about it on this channel
Only Treasury Secretary Janet Yellen changing the makeup of the treasury auctions prevented wide-spread panic. Markets were worried about global geopolitical tensions and the indebtedness of the United States. Gold was approaching a triple top at US$2,000 per ounce.
One year later it's happening again. Post FED rate cut the 10 year yield has gone from 3.60% to 4.25% in a matter of weeks. Last week's publication of the US financial year accounts made grim reading. Accelerating debt and interest on debt levels with no political party even talking about how to address the issue.
As we hit 4.25% this week markets suddenly sold off
Treasuries sell-off reverberates through global markets[FT]
Now Gold is above 2,700.
Famous investors, Paul Tudor Jones and Stanley Druckenmiller are shorting US Treasuries.
Argentina Seeks $2.7 Billion Line to Cover Debt Maturities [Bloomberg}
Ukraine blasts U.N.'s Guterres over invitation to BRICS summit in Russia [Reuters]
Record High Gold Price Signals "Fragmenting Global System"; El-Erian Warns [Zerohedge]
As market rates have gone up significantly since the FED cut, US mortgage rates have gone up too
15 and 30 year US Mortgage Rates (Freddie Mac)
In fact 30 year mortgage rates are still quite low, as the chart below from the St Louis FED demonstrates
The commercial real estate world must have let out a huge sigh of relief as the FED cut but now that mortgage rates are rising still, the writing is truely on the wall for office owners and regional banks.
Municipalities will be suffering as rate income won't be increasing anytime soon, with a wave of defaults and regional bank failures on the way.
San Francisco Hit With Credit Downgrade Over CRE Apocalypse [Zerohedge]
China Loan Prime Rate
A quieter week for China as we watch rate cuts and stimulus attempting the stop the deflationary economic forces.
It was a week of BRICs, war games around Taiwan and preparing for Trump's tarriffs.
China cuts loan prime rate slightly more than expected [investing.com]
China Refrains From Cutting Policy Rate After Record Trim [Bloomberg]
Chinese Banks Face Liquidity Struggle as Key Funding Cost Rises [Bloomberg]
China, India End Border Impasse Ahead of Likely Xi-Modi Meet [Bloomberg]
US Existing Home Sales September 2024
US Building Permits September 2024
US New Home Sales September 2024
US Durable Goods September 2024
Reverse Repo Facility
Cryptocurrencies Dip After Report of US Probe of Tether [Bloomberg]
Bank of Canada cuts 50bps
Canada Industrial Product Price Index September 2024
Canada Retail Sales August 2024
The Bank of Canada is being unusually proactive in slashing rates and there's plenty to justify it. Strong disinflation and a consumer in a world of pain are a good excuse for cutting. Let's hope it's not too late.
Trudeau announces sharp cuts to Canada's immigration targets [BBC]
More political tomfoolery but a clear message that something has to give, and we'll find out in the UK budget this week.
Rumours that Rachel Reeve wasn't an economist at Bank of Scotland as she claimed will make it a fun packed halloween treat on 30th October.
DWP to take money directly from bank accounts in benefit fraud crackdown [Telegraph]
Starmer claims people with shares do not count as ‘working people’ [FT]Germany PPI September 2024
Germany Car Registrations September 2024
EU Consumer Confidence October 2024
France, Germany & EU Purchasing Managers Index October 2024
Split market decision pricing on 25 or 50bp in ECB Dec following the French and German PMI report.
French Left’s Tax Hike Proposals ‘Unbearable,’ Premier Says [Bloomberg]
EU races to prepare for a Trump win[FT]
Fears for Victoria as economy ‘diverges from other states’ [AFR]
CBA, Westpac split with other big banks and back borrowing rules
Reserve Bank of Australia reports $2.8 bln accounting loss for 2024 [Reuters]
With USD / YEN closing above 152.00 this week, Thursday's Bank of Japan meeting will tell us whether the Ministry of Finance is going to further support the Yen with intervention or just talk about it.
Nonfarm payroll and Core PCE will be fascinating to watch, but probably as usual, difficult to believe.
Markets will have laser focus on US 10 year yields.
And the UK halooween party.
Will Trump / Harris try to address US debt levels before the election. So far nothing......