Les dépêches lundi matin, le thème de l’inflation

  • Les marchés attendent la Fed. On pense qu’elle va finalement annoncer une forme de resserrement passif de sa politique monétaire.
  • Carney de la Bank of England va parler à washington, on attend également des précisions sur sa politique monétaire .
  • Eurozone final  CPI , on attend 1,5%

Je ne sais pas si les pressions déflationnistes faiblissent et si les pressions inflationnistes prennent de la force, mais je sais que l’on parle un peu plus de l’inflation ces derniers jours .

On continue de créer d’énormes quantités de liquidités dans le monde global et il faut bien que ces liquidités finissent par aller quelque part , soit qu’elles font monter le prix des actifs , soit qu’elles font monter le prix des biesn réels , imobilier et consommation.

Il semble depuis quelque temps qu’il y ait un peu de débordement, on déborde des marchés d’assets pour irriguer un peu le marché des biens et services. C’est un balbutiement mais il est net dans certaines zones comme l’Europe, Grande Bretagne comprise…Il y a un peu de hausse et des signes sur les matières premières, le pétrole est plus ferme vers les 50 dollars etc.

La probabilité de hausse des taux de la Fed avant la fin de l’année est remontée à 50%, les taux des Treasuries à 10 ans sont repassés au dessus des 2,2% etc, il y a un frémissement.

Ci dessous quelques extraits ou on parle de l’inflation

“Inflationary pressure emanating from the factory to the world is proving more resilient than economists have anticipated. China’s producer-price inflation accelerated to 6.3% in August from a year earlier, exceeding all but one of 38 estimates… That data… followed 5.5% readings in the prior three months… The surprise strength gives support for global inflation spanning from metals to fuel and shows the effects of resilient domestic demand and reduced supplies of some commodities.”

Up 1.8% y-o-y, Chinese August CPI was the strongest since January. This follows last week’s stronger-than-expected import data. China is demonstrating classic signs of a Credit-induced Bubble economy – one where domestic Credit excesses are seeping into the global inflationary backdrop through commodities and some modest upward pressure on goods and services prices.

It’s now only about a month until the (10/18) start of the National Congress of the Communist Party of China. Financial stability will be a primary focus, though I question whether the party appreciates how unstable things have become. Chinese officials have dabbled with myriad (“macro prudential”) tightening measures.

A key aspect of global Bubble analysis is that inflationary policymaking and resulting monetary disorder have badly distorted economic and financial structures. QE and other monetary inflation were supposed to rectify the dilemma of insufficient “aggregate demand.” Yet all this “money” and Credit sloshing around the global system is creating dangerous market contortions, destabilizing speculation and ubiquitous price Bubbles. China’s financial system is straining under the burden of intermediating $4.0 TN of 2017 Credit growth into perceived “money-like” instruments .

A few – not necessarily market-friendly – headlines worth pondering: “UK inflation rate rises to 2.9%”; “Euro zone wage growth surges, making ECB taper more likely”; “Bank of Canada open to alternatives to inflation target”; “Inflation data prompt rethink on US rates”; “Inflation is heating up with some help from the hurricanes”.

Recent inflation readings have generally surprised on the upside, including those in China, UK, U.S. and India. The GSCI commodities index gained 2.2% this week to trade to highs since April. Crude (WTI) was back above $50 this week. While down this week, industrial metals have been on fire. Meanwhile.

Global bond markets have begun taking notice. UK yields surged a notable 32 bps this week to 1.32%, near a seven-month high. Ten-year yields were up 10 bps in Canada to an almost three-year high. Australian 10-year yields were up 16 bps to 2.74%, near the high since March. Sweden saw yields jump 13 bps to 0.85%, the high since January 2016. German bund yields rose 12 bps to 0.43%. 

Ten-year Treasury yields rose 15 bps this week to 2.20%. Two-year Treasury yields jumped 12 bps to 1.38%, quickly closing in on early-July’s multi-year high of 1.41%. Five-year Treasuries were under heavy selling pressure, with yields jumping 17 bps to 1.81%. Meanwhile, currency trading continues to indicate underlying instability. Two currencies popular in speculative trading strategies – the Japanese yen and British pound – both posted big moves this week. The pound surged 3.0%, while the yen sank 2.7%.

September 11 – Bloomberg (Thomas Biesheuvel): “The price of one of the most critical materials for the Western world’s economy and defenses is spiking faster than any major commodity. Tungsten, used to harden steel in ballistic missiles and in drill bits, has surged more than 50% in the last two months amid growing concern about supply cutbacks in China, where about 80% of the metal comes from.”

The Goldman Sachs Commodities Index gained 2.2% (down 0.6% y-t-d). Spot Gold dropped 2.0% to $1,320 (up 14.6%). Silver fell 2.3% to $17.701 (up 10.8%). Crude surged $2.41 to $49.89 (down 7%). Gasoline increased 0.9% (down 1%), and Natural Gas jumped 4.6% (down 19%). Copper fell 3.0% (up 18%). Wheat rallied 2.6% (up 10%). Corn slipped 0.6% (up 1%).

September 14 – Bloomberg (Sho Chandra): “Inflation may finally be getting back on track to reach the Federal Reserve’s goal, as the U.S. cost of living accelerated following a weak stretch of readings… Consumer-price index increased 0.4% m/m (est. 0.3% gain) after 0.1% rise the prior month; rose 1.9% y/y (est. 1.8%). Excluding food and energy, so-called core CPI rose 0.2% m/m (matching est.) after rising 0.1%; up 1.7% y/y (est. 1.6%) after 1.7% advance. Increase in core index driven by biggest gain in shelter since 2005.”

September 13 – CNBC (Diana Olick): “Homebuyers are clamoring to capitalize on the lowest interest rates in almost a year, driving total mortgage application volume 9.9% higher last week… After declining for weeks, mortgage applications to purchase a home jumped 11% for the week and were 7% higher than a year ago.”

September 13 – Bloomberg (Sho Chandra): “Rising U.S. wholesale prices in August reflect the biggest jump in energy costs since January, while underlying inflation remained contained… Producer-price index rose 0.2% m/m (est. 0.3% rise) after 0.1% drop the previous month. PPI rose 2.4% y/y after 1.9% gain in prior 12-month period.”

September 11 – Bloomberg (Chikako Mogi and Takako Taniguchi): “Japan’s regional banks are turning toward private equity, hedge funds and real estate in search of higher returns as regulatory concerns restrict ownership of foreign bonds. Alternative assets was the favored choice of investment for five lenders, according to a Bloomberg survey… Foreign bonds was picked by three respondents, while none of the lenders said they found Japanese government debt attractive given depressed yields. Japanese banks are following the nation’s largest insurance companies in considering more alternative assets as choices narrow with the Bank of Japan committed to holding down the benchmark bond yield at around zero percent.”

September 12 – Bloomberg (Archana Chaudhary): “India’s August inflation rate accelerated to the fastest since March, exceeding expectations ahead of the central bank’s policy review in October. Consumer price inflation quickened to 3.36% in August…”

September 11 – Bloomberg (Fion Li): “Hong Kong’s Financial Secretary Paul Chan warned potential buyers to be careful buying property in the world’s most expensive housing market, as moves by the Federal Reserve to unwind its balance sheet may shrink money supply. Chan warned in June that Hong Kong’s property market is in a ‘dangerous situation’ and vulnerable to a correction. Hong Kong Chief Executive Carrie Lam describes housing as citizens’ No. 1 concern and recently set up a task force on increasing land supply as she tries to rein in ever-escalating prices… Hong Kong home prices, the least affordable in the world, have surged 21% in the 12 months through June 30…”

September 14 – Bloomberg (Lucy Meakin and Jill Ward): “Signaling that inflation is overtaking Brexit-related slowdown as an economic risk, Bank of England policy makers said they’re headed toward raising interest rates for the first time in more than a decade. The pound surged and gilt yields jumped as investors anticipated rates may increase as soon as November, far earlier than the previous consensus. That came after the BOE revealed that for a majority of policy makers, ‘some withdrawal of monetary stimulus was likely to be appropriate over the coming months in order to return inflation sustainably to target.’”

September 12 – Bloomberg (Lucy Meakin): “U.K. inflation is on the rise again, accelerating more than forecast in August after the biggest surge in clothes prices in almost three decades. The jump to 2.9% from 2.6% in July puts the spotlight squarely back on one of the most prominent economic repercussions of the Brexit vote in 2016. The pound has fallen 11% against the dollar since the referendum, boosting import costs and feeding through to prices for everyday household items. The annual inflation rate has never been higher since 2012 and helped push Bloomberg’s Brexit barometer to the lowest since June.”

September 12 – Bloomberg (Chris Anstey): “Banks from China, Japan and Canada have overseen a surge in overseas lending since the financial crisis, helping to cushion a deep slide in cross-border capital flows thanks especially to a retreat by European banks, according to the McKinsey Global Institute. While the stock of global foreign holdings — including loans, equities, bonds and foreign direct investment — has remained about the same since 2007 at 183% of world GDP, gross flows of capital across borders have plunged 65%. Much of that has been due to European banks refocusing on their domestic markets as the euro crisis and new capital rules took hold, McKinsey said… Key exceptions have been banks in China and Japan, which have funded their countries’ companies abroad…”

September 13 – Bloomberg (Pooja Thakur Mahrotri): “Prices of office, retail and industrial properties in most global cities have reached records since the global financial crisis, with values in Hong Kong tripling over the past decade, according to a survey by Real Capital Analytics Inc. With the exception of a handful of cities such as Amsterdam, Chicago, Tokyo and Washington, prices in the other cities have fully recovered and gone on to set new records… Prices in Manhattan and London’s West End have almost doubled…”

September 10 – Financial Times (Robin Wigglesworth): “At the peak of the South Sea Bubble three centuries ago, a wag famously poked fun at the craze by issuing a prospectus for ‘a company for carrying out an undertaking of great advantage, but nobody to know what it is’. Cryptocurrency mania has now arguably reached the same stage. This summer an unknown software developer launched what he termed the ‘Useless Ethereum Token’, an ‘initial coin offering’ of a variant of a cryptocurrency whose popularity rivals that of the more famous bitcoin. But this was the ‘world’s first 100% honest’ ICO, he promised, and was admirably transparent about its purpose. ‘You’re literally giving your money to someone on the internet and getting completely useless tokens in return,’ he wrote on the UET website. ‘There are no ‘whitepapers’, no ‘products’, and no ‘experts’. It’s just you, me, your hard-earned Ether, and my shopping list.’ The ICO raised more than $200,000, according to the backer.”

September 13 – Bloomberg (Matthew Boesler): “Former Federal Reserve Chairman Alan Greenspan, in year nine of a U.S. economic expansion, conceded in 1999 that patience was sometimes a better policy than his doctrine of preemptive interest-rate moves because ‘the future at times can be too opaque to penetrate.’ For some Fed officials, these days look like one of those times to wait for clarity. Faith in preemption — the Greenspan-era strategy of setting of monetary policy based on forecasts to get ahead of where the economy was going — is beginning to falter among some officials. That’s because in the current expansion’s ninth year, inflation isn’t accelerating as they predicted for reasons that aren’t yet understood, even as the labor market tightens and global growth improves. ‘The conventional wisdom did not work in the 1990s and it is not working now,’ said Allen Sinai, chief executive officer of Decision Economics…”

[Reuters] Asia stocks hit decade high, dollar firm before Fed meeting

[Bloomberg] China Home Prices Rise in Fewer Cities in Property Slowdown

[Bloomberg] ‘Frothy’ Assets Spark Concerns as Cash Floods Indian Markets

[FT] China vs US: Who is copying whom?


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