Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US BreakEven Inflation at 5-Year Lows

Economics / Inflation Aug 21, 2015 - 12:37 PM GMT

By: Ashraf_Laidi

Economics

Neither higher than expected Philly Fed survey at 8.3 in August nor a dovish set of FOMC minutes has managed to ease the onslaught of selling in global equities. The old trick that a dovish Fed and poor data are good for stocks is no longer valid. An uncertain Fed drove down chances of a Sept Fed hike to 36% from close to 50% earlier in the week. Meanhwile, stock indices deepen their selloffs well after a series of DeathCrosses emerged in the S&P500, Dow-30, Dax-30, FTSE-100 and Shanghai Composite. which may suggest that they require the Fed to firmly shut the door on any 2015 rate cut.


US Inflation Figures

We highlighted earlier on the week that the real impact on CPI remained to be seen after the latest downleg in oil prices. 0.2% y/y in the headline and 1.8% y/y on the core underlines the divergence caused by falling oil prices. This was seen in yesterday's release of UK CPI.

Breakeven inflation at 5-year lows

The above charts suggest market-oriented measures of inflation, such as break-even rates, which measure the difference between traders' expectations of the difference between nominal bonds and inflation-protected bonds -- have fallen sharply. Unlike survey-based inflation measures, which are provided monthly, break-even rates are available daily, with the 2-year BE tumbling to 7-month lows of 0.22% and 5-year BE rates at 1.1%, the lowest since August 2010.

These inflation measures have been criticized for being too sensitive to oil prices. But is the Fed being inadequately aware of falling oil prices? We warned here about how the Fed could be behind the curve in accounting for energy's impact on inflation.

We continue to expect the Fed to remain on hold in 2015, a positon long held since December 2014 . Our longs in EURUSD pre-NFP at 1.1020 remain open and our final target will not be lowered for now.

By Ashraf Laidi
AshrafLaidi.com

Ashraf Laidi CEO of Intermarket Strategy and is the author of "Currency Trading and Intermarket Analysis: How to Profit from the Shifting Currents in Global Markets" Wiley Trading.

This publication is intended to be used for information purposes only and does not constitute investment advice.

Copyright © 2015 Ashraf Laidi

Ashraf Laidi Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in