Eurodollar University

Opening round of the 2025 trade wars. Mexico and Canada in the crosshairs. Neither of them stood a chance. The pounding started even before the negotiations began. Eurodollar University's Money & Macro Analysis NYT Here’s What to Know About Trump’s Tariffs https://www.nytimes.com/2025/02/01/business/trump-tariffs-canada-mexico-china.html Truth Social, Trump Mexico Message https://truthsocial.com/@realDonaldTrump/posts/113940711907400754 Bloomberg Car Prices Face $3,000 Increase as Automakers Worry Over Tariffs https://www.bloomberg.com/news/articles/2025-02-02/car-prices-face-3-000-increase-as-trump-tariffs-hit-auto-sector Financial Post Trump takes aim at Canada's banking sector as tariffs loom https://financialpost.com/fp-finance/banking/trump-takes-aim-canada-banking-sector-tariffs-loom Live updates: Trump discusses tariffs with Canada and Mexico https://www.nbcnews.com/politics/politics-news/live-blog/trump-canada-mexico-tariffs-live-updates-rcna190371 As Trade War Intensifies, Watch for Soaring Inflation, July 2018 https://assuredam.com/2018/07/as-trade-war-intensifies-watch-out-for-inflation/ FOMC Transcript June 2019 https://www.federalreserve.gov/monetarypolicy/files/FOMC20190619meeting.pdf https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Gold has been soaring all of 2025 so far, reaching a new all-time high this past week as yet another major cyclical warning was triggered. Trade wars may account for some of the urgency, the real story is how in a world that's entirely artificial more in it desperately demand something real. It's getting easier to sort what's real from so much fakery. Eurodollar University's conversation w/Steve Van Metre Bloomberg STMicro Eyes Workforce Cuts of Up to 3,000 in Chip Slump https://www.bloomberg.com/news/articles/2025-01-31/stmicro-eyes-workforce-cuts-of-up-to-6-as-chip-slump-drags-on https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Silicon Valley Bank's failure in March 2023 kicked off a chain of events that has cascaded across money, banks, and the real economy. The world economy didn't forget how to grow, the banking crisis of early '23 proved to be the final inflection point. Central banks may have won the battle over banks, then lost the war where it truly mattered. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Banks are in full-on defensive mode, GDP is in a huge and growing hole, and central bankers are realizing they're stuck no matter what. The end of last year for Europe stands as a stark warning that this global transition remains far from over with - even after two years of it already. Eurodollar University's Money & Macro Analysis ECB statement https://www.ecb.europa.eu/press/pr/activities/mopo/html/index.en.html Bloomberg ECB Cuts Rates for Fifth Time as Euro-Zone Economy Flatlines https://www.bloomberg.com/news/articles/2025-01-30/ecb-cuts-rates-for-fifth-time-as-euro-zone-economy-flatlines Bloomberg Traders’ ECB Rate Cut Bets Fuel Biggest Yield Drop in Two Months https://www.bloomberg.com/news/articles/2025-01-30/german-two-year-yields-slump-as-traders-boost-ecb-rate-cut-bets https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Reviewing the Fed, the Canadians, Sweden, and previewing the ECB. Market reactions and what really happened at the FOMC. Eurodollar University's Money & Macro Analysis Bloomberg Bets on Big Treasuries Rally Are Booming Before Fed Decision https://www.bloomberg.com/news/articles/2025-01-28/bets-on-bigger-treasuries-rally-are-booming-before-fed-decision Bloomberg Traders Bet ECB Will Need to Deepen and Accelerate Rate Cuts https://www.bloomberg.com/news/articles/2025-01-29/traders-bet-ecb-will-need-to-deepen-and-accelerate-rate-cuts https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Shipping rates have plunged in January. The sinking demand for raw materials is another warning about the state of the economy in 2025. It was one echoed yet again by American consumers who, after a short reprieve on rate cuts and election, are right back to worrying about jobs and incomes all over again. Eurodollar University's Money & Macro Analysis Investopedia https://www.investopedia.com/terms/b/baltic_dry_index.asp Bloomberg US Consumer Confidence Drops to Four-Month Low on Job Market https://www.bloomberg.com/news/articles/2025-01-28/us-consumer-confidence-drops-to-four-month-low-on-job-market Conference Board https://www.conference-board.org/topics/consumer-confidence https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Chinese banks are the real story, even as China's government (intentionally?) stole the spotlight with its AI-knock-off, a distraction from the latest real economy warning and most importantly the banking sector's latest. The credit crisis in the latter may finally be coming to a head as it keeps the former from stabilizing. Eurodollar University's Money & Macro Analysis AA Xi Jinping https://www.aa.com.tr/en/asia-pacific/on-chinese-new-year-s-eve-xi-vows-to-confront-challenges-without-hesitation-/3463706 Bloomberg China’s Economy Stumbles in Sign Rebound Hinges on More Stimulus https://www.bloomberg.com/news/articles/2025-01-27/china-s-factory-activity-cools-ahead-of-major-new-year-holiday Bloomberg China Starts Lowering Price Goals to Match Deflationary Reality https://www.bloomberg.com/news/articles/2025-01-24/china-starts-lowering-price-goals-to-match-deflationary-reality Bloomberg Markets Sound Alarm Over Deflationary Spiral in China https://www.bloomberg.com/news/articles/2025-01-07/china-investors-sound-alarm-over-japan-style-deflation-as-yields-hit-record-low Bloomberg Hong Kong’s Property Distress Is Catching Up With City’s Banks https://www.bloomberg.com/news/articles/2025-01-26/hong-kong-s-property-distress-is-catching-up-with-city-s-banks https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

South Korea is the latest to fall into "forgot how to grow" and Texas Instruments showed the world why. Both were slammed this week for getting to the same place from different perspectives. Critical cyclical indications that shocked the consensus. Eurodollar University's conversation w/Steve Van Metre Bloomberg Texas Instruments Suffers Worst Rout Since 2020 on Weak Forecast https://www.bloomberg.com/news/articles/2025-01-23/texas-instruments-outlook-signals-chip-slump-is-persisting https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

While the dollar was screaming higher the past few months, that eurodollar disorder had foreign govts absolutely raiding their reserves, money dealers hoarding record amounts of collateral and record Treasuries being piled up by depositories. And those were just the beginning. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

President Trump created quite a stir in his speech to Davos, demanding, among other things, lower oil prices from OPEC plus lower interest rates out of Jay Powell. In fact, those two are linked with the one expected to pave the way for the other. What's the real game here? More important, what are the chances this can work? Eurodollar University's Money & Macro Analysis Bloomberg Trump Urges Lower Oil Prices, Interest Rate Cuts at Davos https://www.bloomberg.com/news/articles/2025-01-23/trump-urges-opec-to-lower-oil-prices-warns-of-tariffs-at-davos CNBC President Donald Trump says he’ll ‘demand that interest rates drop immediately’ https://www.cnbc.com/2025/01/23/president-donald-trump-says-hell-demand-that-interest-rates-drop-immediately.html https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Tariffs on Mexico and Canada begin on February 1, or do they? Whether President Trump is merely posturing or not, the threat is real and the situation globally they would be starting from makes for a difficult mix. That's why the dollar is rising, rates are falling, and real economy variables are already experiencing significant pressure. Eurodollar University's Money & Macro Analysis Bloomberg Trump Plans to Impose 25% Tariffs on Mexico, Canada by Feb. 1 https://www.bloomberg.com/news/articles/2025-01-21/trump-plans-to-enact-25-tariffs-on-mexico-canada-by-feb-1 WSJ The Big Risk of a Trade War: Inflation https://www.wsj.com/articles/the-big-risk-of-a-trade-war-inflation-1522926022 Bloomberg Why the Freight Market Is Stuck https://www.bloomberg.com/opinion/articles/2025-01-17/j-b-hunt-warning-shows-freight-is-stuck-in-place Rueters Canadian dollar posts biggest decline among G10 currencies https://www.reuters.com/markets/currencies/canadian-dollar-posts-biggest-decline-among-g10-currencies-2025-01-16/ Bloomberg Trump’s Pledge to Slap 25% Tariffs on Mexico Sinks Peso https://www.bloomberg.com/news/articles/2025-01-21/trump-s-pledge-to-slap-25-tariffs-on-mexico-sinks-peso https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

UK payrolls took a massive hit in both November AND December. While the media looks for reasons to blame, the answer instead comes from all the rest of the world. Unemployment is on the rise all over the place, with the situations in some of them going way beyond softening or weakness. More than a few places you might not think of having a major employment downturn are, a warning to the world this is getting really serious. Eurodollar University's Money & Macro Analysis Bloomberg Surprise UK Retail Sales Drop Fuels Economic Growth Worries https://www.bloomberg.com/news/articles/2025-01-17/uk-retail-sales-fall-in-latest-setback-for-struggling-economy https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Many regulators worry there is the potential for systemic crisis begun by so-called shadow banks. The banks you already know are the last one. In the decade and a half since 2008 the eurodollar world has evolved yet again. The aftermath of that last one opened the door to go back into the shadows. Eurodollar University's Money & Macro Analysis Bloomberg US Lays Path for More Financial Giants to Get Fed Oversight https://www.bloomberg.com/news/articles/2023-11-03/yellen-lays-path-for-more-financial-giants-to-get-fed-oversight Bloomberg Shadow Bank Loans From US Lenders Surpass $1 Trillion in Fed Data https://www.bloomberg.com/news/articles/2024-02-10/shadow-bank-loans-from-us-lenders-surpass-1-trillion-in-fed-data IMF Shadow Banks: Out of the Eyes of Regulators https://www.imf.org/en/Publications/fandd/issues/Series/Back-to-Basics/Shadow-Banks https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

The verdict for the Christmas season is in and...not good. Consumers wanted to spend. They tried to spend. They couldn't spend, not what they wanted or retailers needed. Americans simply don't have enough funds and so the downturn marches on. Eurodollar University's conversation with Steve Van Metre Signet Jewelers Announces Holiday Sales Results https://www.signetjewelers.com/investors/financial-news-releases/financial-news-release/2025/Signet-Jewelers-Announces-Holiday-Sales-Results/default.aspx Americans Are Spending Less On Streaming Services – Here’s Why https://9meters.com/entertainment/streaming/americans-are-on-average-spending-less-on-streaming-services-in-2024-compared-to-the-previous-year https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Germany's economy is doing something we've never seen before. Not only did it contract for the second straight year, that's not even the most amazing part. The general pattern it is taking is one that is being repeated all around the world. It's as if the entire global economy stopped growing. Eurodollar University's Money & Macro Analysis Bloomberg German Economy Shrinks for Second Year in New Blow to Scholz https://www.bloomberg.com/news/articles/2025-01-15/german-economy-shrinks-for-second-straight-year-before-election IFO Press Release Germany: Europe's largest economy is facing a third consecutive year of recession https://www.ifo.de/en/press-release/2024-12-19/headcount-reduction-germany-more-likely-december-2024 Sky News https://news.sky.com/story/germany-europes-largest-economy-is-facing-a-third-consecutive-year-of-recession-13289549 Bloomberg ECB Will Keep Easing With Economy Losing Momentum, Guindos Says https://www.bloomberg.com/news/articles/2025-01-15/ecb-will-keep-easing-with-economy-losing-momentum-guindos-says https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

China's money markets have started to come unglued, with serious illiquidity driving up money rates. Despite provoking one of the largest liquidity operations in twenty years from the PBOC yesterday, the disorder came back even worse today. All of this against the backdrop of a currency fight and the prospect China's bank credit problem becomes a full-blown liquidity crisis. Eurodollar University's Money & Macro Analysis Bloomberg China's Central Bank Pumps Near-Historic Level of Cash Into Financial System https://www.bloomberg.com/news/articles/2025-01-15/pboc-dials-up-short-term-liquidity-injections-amid-cash-squeeze Bloomberg China Cash Squeeze Rolls on Even After Central Bank’s Infusions https://www.bloomberg.com/news/articles/2025-01-16/china-cash-squeeze-rolls-on-even-after-pboc-liquidity-boosts https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Treasuries exploded on the release of the "inflation" figures for December. Those were rather unremarkable, taken in isolation wouldn't have been able to explain why such a heavy market reaction. There is much more to the CPI and what's going on in the bond market. Eurodollar University's Money & Macro Analysis Bloomberg Why Some Bond Traders Bet Relentless Selloff Will Soon Lose Steam https://www.bloomberg.com/news/articles/2025-01-14/bond-traders-wager-slump-set-to-ease-with-key-cpi-data-ahead Bloomberg Fed’s Barkin Says CPI Data Show Inflation Headed Toward 2% Goal https://www.bloomberg.com/news/articles/2025-01-15/fed-s-barkin-says-cpi-data-show-inflation-headed-toward-2-goal Bloomberg Fed Finds New Reason for Confidence in Obscure Inflation Gauge https://www.bloomberg.com/news/articles/2025-01-09/fed-finds-new-reason-for-confidence-in-obscure-inflation-gauge https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Russian sanctions triggered more than a surge in oil prices. Financial markets near-panicked bought in near-term futures contracts. While the jump in energy is already being called an huge inflation risk, it isn't even close. On the contrary, oil spikes always end a certain way. Eurodollar University's Money & Macro Analysis CNN Biden admin imposes harsh sanctions on Russian oil industry to cut off funding for Ukraine war effort https://www.cnn.com/2025/01/10/politics/biden-admin-russia-energy-sanctions-ukraine/index.html https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Not a good day in India to start the week. The rupee’s currency crisis is accelerating. The central bank is burning through reserves at an unsustainable pace. India stocks were crushed, with the main SENSEX index down over a thousand points. Delhi also significantly dialed back its growth estimates while reports came out it is going to massively restate its November imports. Why is all this happening? It's not because of Jay Powell or Donald Trump. Eurodollar University's Money & Macro Analysis Hindustan Times Stock market today: Sensex and Nifty tanks, rupee hits all-time low https://www.hindustantimes.com/business/stock-market-crash-sensex-tanks-nearly-700-points-on-open-nifty-down-over-200-101736737599073.html Bloomberg Deepening India Slowdown Sinks Hope for New Era of 8% Growth https://www.bloomberg.com/news/articles/2025-01-08/india-s-deepening-slowdown-dashes-hopes-for-new-era-of-8-growth Bloomberg India’s Central Bank Said to Ease Rupee Drought With FX Swaps https://www.bloomberg.com/news/articles/2025-01-13/india-s-central-bank-said-to-ease-rupee-drought-with-fx-swaps Business Standard 'If they tax us, we tax them': Trump threatens reciprocal tariffs on India https://www.business-standard.com/external-affairs-defence-security/news/trump-threatens-reciprocal-tariffs-india-trade-conflict-124121800321_1.html Bloomberg It May Rain Downgrades This Earnings Season in India https://www.bloomberg.com/news/articles/2025-01-13/india-market-buzz-big-money-in-small-companies-looks-tough-now Bloomberg India Fixing Record Trade Gap After Overstating Gold Imports https://www.bloomberg.com/news/articles/2025-01-08/india-fixing-record-trade-deficit-after-overstating-gold-imports https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Another blowout payroll report, way above every expectation. That makes two in a row for the Est. Survey post-election. Plus, a big rebound for the HH Survey. Trump-bump, a sign of a resurgent economy finally shaking off the doldrums of the past year-plus? Eurodollar University's conversation w/Steve Van Metre https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU