Making Sense

"If you can trust yourself when all men doubt you, B ut make allowance for their doubting too;    If you can wait and not be tired by waiting..... If you can fill the unforgiving minute,  With sixty seconds’ worth of distance run,    Yours is the Earth and everything that’s in it...." ~ Rudyard Kipling  Let's Quickly review the U.S Economic Data released over the week.  The GDPNow Model estimate for real GDP growth in Q2 was revised downwards to 3% after the release of the data this week. CBO estimates show that U.S Budget Deficit will be around $ 400 bn larger this year at $ 1.90 trn.  USTs consolidated last week's gains in a 9.50 bps range and US2s10s closed relatively unchanged for the week at - 48 bps and DXY continued to climb higher after taking support at the 103.00 level at the start of the month and S&P 500 made fresh highs at 5517. On the DXY, 106.25 is a crucial resistance zone for DXY bears and an important point of reversal. S...

Risk sentiment stabilised overnight as 11 banks infused USD 30 bn of deposits into First Republic Bank and Treasury Secretary Janet Yellen told the Senate Finance Committee that "Americans can feel confident that their deposits will be there when they need them." US Initial claims for the week ending Mar 11, 23 came in under the 200K level at 192K following a jump last week to 212K which was attributed to mid-winter school break. The steady print shows reluctance among employers to let labor force go. Continuing claims fell to 16.84mn from prior week number of 17.18 mn.  The residential construction report showed stronger than expected construction activity.  Building Permits: 1,52 mn   (prior 1.34 mn) Housing Starts: 1,45 mn  (prior 1.32 mn)  Housing Completions: 1,557,000 (prior 1.39 The interest pricing gyrated with May 23 peak rate seen at 4.95% and dec 23 rate at 4.23% Yields on US Treasuries made low before closing the day higher. 2Y UST touched a low...

If you personalize losses, you can't trade. It is important to know the probability of your wins so when you loose , take comfort in knowing that you will make money only x % of the time. Initial Jobless Claims came in for the week ending Jan 14 decreased by 15,000 to 190,000 and Continuing jobless claims for the week ending Jan 7 increased by 17,000 to 1.647 million. The employment data has been resilient.  Dec total housing starts declined 1.4% mom in December to 1.382 million units while total building permits declined 1.6% mom to 1.330 million. High mortgage rates are biting into spends on housing as can be seen in the chart below. Remember, we are seeing goods disinflation and due to the construction of the shelter component of CPI, shelter inflation will also start coming off from Q2, the services excluding shelter component could be sticky.  What is important here to understand is - there is divergence in the embedded market pricing of Fed Funds rate and Fed's proj...