The Sluice Is Down!!! Ruh-Roh?
On Friday June 7th... Swap Rates moved on large volumes in which the 3Y were 1.8X higher than the 30 DMA, yet Swap Spreads were unusually inactive at 100% DMA.
The biggest move was in 30Y -4.1 bps as the curve Bull Flattened around the 2Y point. The market is pricing in -50bps cuts with a 98% chance that the Fed changes Rates within the next four meetings. See ClarusFT for more. Moving West...
The May 2019 BLS Employment Situation Summary aka non farms employment...
Total nonfarm payroll employment edged up in May (+75,000), and the unemployment rate remained at 3.6 percent.
The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours.
The change in total nonfarm payroll employment for March was revised down from +189,000 to +153,000, and the change for April was revised down from +263,000 to +224,000.
With these revisions, employment gains in March and April combined were 75,000 less than previously reported.
Soft employment numbers translate into a weaker dollar, GDP and increase the odds of the Fed maintaining or cutting rates. Naturally? Equity markets applauded the dismal economic news loudly with NDX futures jumping 1.9%. Moving West...
Just took a passing gander at the latest Federal Reserve SLOOS aka Senior Loan Officer Opinion Survey on Bank Lending Practices.
Panel 3: Net Percentage of Domestic Respondents Reporting Stronger Demand for Commercial and Industrial Loans. Dark line: large and medium firms -16.9%. Dotted line: small firms -10.3
Aside from the obvious declining trend, what's the big deal? Excluding lead in, recession and aftermath of the GFC Q4-2006 through Q4-2010 and dot com Q4-2000 through Q3-2003...
The biggest move was in 30Y -4.1 bps as the curve Bull Flattened around the 2Y point. The market is pricing in -50bps cuts with a 98% chance that the Fed changes Rates within the next four meetings. See ClarusFT for more. Moving West...
The May 2019 BLS Employment Situation Summary aka non farms employment...
Total nonfarm payroll employment edged up in May (+75,000), and the unemployment rate remained at 3.6 percent.
The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours.
The change in total nonfarm payroll employment for March was revised down from +189,000 to +153,000, and the change for April was revised down from +263,000 to +224,000.
With these revisions, employment gains in March and April combined were 75,000 less than previously reported.
Soft employment numbers translate into a weaker dollar, GDP and increase the odds of the Fed maintaining or cutting rates. Naturally? Equity markets applauded the dismal economic news loudly with NDX futures jumping 1.9%. Moving West...
Just took a passing gander at the latest Federal Reserve SLOOS aka Senior Loan Officer Opinion Survey on Bank Lending Practices.
Sluice - noun 1. a sliding gate or other device for controlling the flow of water, especially one in a lock gate. 2. an act of rinsing or showering with water.
verb - 1.wash or rinse freely with a stream or shower of water. "she sluiced her face in cold water" synonyms: wash, wash down, rinse, swill down, clean, cleanse, flush "crews sluiced down the decks of their ship" (of water) pour, flow, or shower freely. "the waves sluiced over them"For our purposes this SLOOS measures demand for credit, which can give an indication as to where spending, aggregate demand and the economy might be heading. To get a glimpse of our currently deepening economic contraction, look no further than...
Aside from the obvious declining trend, what's the big deal? Excluding lead in, recession and aftermath of the GFC Q4-2006 through Q4-2010 and dot com Q4-2000 through Q3-2003...
For both series, the current reads are the lowest since Q1-2010, but it gets better... reads his low have not been seen since Q1-1992, and its not a one off.
Since Q1-2016 declining demand for large and medium firms has registered 3 positive reads, 1 zero, 10 negative of which 5 are double digit declines. Small firms declining demand has registered 4 positive reads, 10 negative of which 4 are double digit declines.
Outside of a recession, the last three reads for large and medium -14.5; -8.3; -16.9 and small firms -10.8; -10.1; -10.3, are the worst consecutive reads in the history of the series.
More to come in The SLOOS Is Down!!! Ruh-Roh? Stay tuned, no flippin.
More to come in The SLOOS Is Down!!! Ruh-Roh? Stay tuned, no flippin.
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