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Insights and Analysis
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29 марта, 20:00

Can Yield Curve Foretell a Coming Recession?

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.

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28 марта, 17:00

Equities: Event-Risk Storm on the Horizon?

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Equities could face event-risk turbulence as Congress attempts to legislate eagerly-awaited tax reforms, infrastructure spending and debt ceiling.

23 марта, 19:30

French Elections: Euro Hangs in the Balance?

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With the Dutch elections over, the euro has breathed a sigh of relief.  As Geert Wilders' nationalist Freedom Party fell short in the parliamentary elections on March 15, the euro gained nearly one percent against the U.S. dollar, albeit on a day when most currencies strengthened versus the greenback.  While Wilder’s party suffered a spectacular collapse in polls in the immediate run up to the election, there was never any serious concern that he would be running the Dutch government.  By contrast, the upcoming French Presidential election in April has the potential to be a much bigger source of volatility for the euro, as well as other currencies, equities and bonds. France votes in two rounds.  Round one takes place on Sunday, April 23, and the top two vote getters will proceed to the second round on Sunday, May 7.  On both days, the French government will issue an exit poll at 8:00 pm Paris time (7:00 pm London, 2:00 pm New York and 1:00 pm Chicago) with a preliminary projection of the winner.  It appears likely that one of those two top vote getters will be Marine Le Pen of the National Front who promises, among many other things, to hold a referendum on France’s memberships in the European Union (EU) and in the euro currency that spans 19 countries.  As such, a Le Pen victory holds the potential to roil the markets in the way that the surprise Brexit vote did in 2016. On the face of it, she seems unlikely to win.  Recent polls have put her at 20-30% behind her most likely second round opponent, the pro-European centrist Emmanuel Macron (Figure 1).   She trails her next most likely second round opponent, the center-right Francois Fillon, a former Prime Minister, by a 10-20% margin (Figure 2).  Fillon is also pro-Europe.

22 марта, 19:00

Fed: End of an Era of Economists at the Helm?

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Dr. Janet Yellen’s term as Chair of the Board of Governors of the Federal Reserve (Fed) System ends in early 2018.  While she could be reappointed for another four-year term as Chair, reading the tea leaves in Washington D.C. suggests a scenario where we may see a person from a business career take over the gavel.  And not just as Chair.  There are three vacancies on the Board of Governors, and we also expect a new Vice-Chair in the summer of 2018.  That is, there is a potential for five new board members on a seven-member board, and some or all of those seats could be filled with business-career credentialed individuals instead of persons with academic or central bank experience.   This could usher in a major cultural change at the Fed.  Such a cultural shift might make a very big difference in how decisions about interest rate policy may be made.  Our intuition is that more business experience on the Fed Board of Governors and fewer economists will shift the debate away from academic interpretations of monetary policy and increase the focus on the interplay of rates and debt.  More specifically, the high debt loads in the U.S. will create a bias for lower than otherwise rates, so that increases in debt-service expenses do not derail an economic recovery.  Over the long haul, if this scenario prevails, a bias toward lower rates relative to inflation is likely to also lead to a weaker trend for the U.S. dollar as well. For a podcast on this topic by Blu Putnam, please visit: www.cmegroup.com/podcasts/off-the-charts-podcast-series/what-will-a-post-yellen-fed-look-like-in-2018.html.

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21 марта, 14:00

What Will a Post-Yellen Fed Look Like in 2018?

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.

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14 марта, 14:00

Copper: Will Fed Rate Hikes Temper Rally?

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.

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09 марта, 15:00

Factors That Can Blunt Copper's Blistering Rally

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Copper's sharp price rally has been fueled by expectations of a U.S. fiscal stimulus package, China's still respectable growth rate, and supply disruption.

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08 марта, 15:00

Is Crude Oil Taking Cue from Vegetable Oils?

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It looks like the ultimate case of the tail that wagged the dog: soybean oil foreshadowing price trends of crude oil (Figure 1).  It seems odd.  How could the modest soybean oil, whose average daily volume in dollar terms amounted to $2.8 billion in February 2017, lead the colossal West Texas Intermediate crude oil market, whose volume that same month was 21 times greater?

Выбор редакции
07 марта, 15:00

Agriculture: El Niño, La Niña and Trade Policies

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.

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06 марта, 17:51

Fed Warming Up to Multiple Rate Hikes in 2017

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Fed Chair Janet Yellen's speech in Chicago signals greater confidence in the economy and readiness to raise interest rates multiple times in 2017.

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28 февраля, 15:00

Data-Driven Fed's Dilemma Over Rate Decision

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Off The Charts! examines the pertinent economic issues of the day, providing a deeper dive into complex topics and framing the issues in a way that can lead to a better understanding of the financial and commodities markets.

27 февраля, 14:00

Beware as Debt Ceiling Meets Fiscal Ambitions

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Tax reform, infrastructure spending and the national debt are topics likely to take center stage in Washington in the spring of 2017.  The debt ceiling returns as a potentially potent political factor after being temporarily suspended in late 2015 to avoid any Congressional vote during the 2016 election year.  This time around, Beware the Ides of March!  The need to raise the debt ceiling will be reactivated at $20.1 trillion somewhere in the second quarter as the U.S. national debt will be at its maximum allowed level, even with emergency measures.  There is no doubt that with Republicans controlling the White House, Senate and House of Representatives, the challenge of the debt ceiling will be overcome.  The burden of governing is on Republicans and they will ensure that there will be no government shutdowns on their watch.  Nevertheless, how the debt ceiling issue is resolved will provide a very strong signal to the equity and bond markets as to the principles and assumptions that will guide fiscal policy over the next four years or more. U.S. Treasury markets have moved in the direction of preparing for a massive issuance of new debt, rising inflation, and for the Federal Reserve to raise short-term rates.  By contrast, U.S. equity markets have embraced the possibility of corporate tax cuts, lighter touch regulations, and eventual government-sponsored infrastructure spending.  So, a lot is at stake in the markets as the debt ceiling is confronted.