Eurodollar University

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

China's yuan is hanging by a thread, the closest it has ever been to going over the government limit. Finally, even the mainstream media has caught on this has nothing to do with Jay Powell and the Fed. The bazooka has been utterly exposed. Eurodollar University's Money & Macro Analysis Bloomberg PBOC Halts Bond Buying to Defend Yuan as Economic Gloom Worsens https://www.bloomberg.com/news/articles/2025-01-10/pboc-says-it-will-temporarily-halt-buying-of-government-bonds Bloomberg China’s Market Support Falls Short as Economic Gloom Deepens https://www.bloomberg.com/news/articles/2025-01-10/china-s-market-support-falls-short-as-economic-gloom-deepens Bloomberg China Ramps Up Yuan Support With Record Hong Kong Bill Issuance https://www.bloomberg.com/news/articles/2025-01-09/pboc-taps-record-bill-issuance-in-hong-kong-to-support-yuan Bloomberg Yuan Short Sellers Squeezed by Soaring Hong Kong Funding Costs https://www.bloomberg.com/news/articles/2025-01-07/offshore-yuan-borrowing-costs-surge-as-currency-support-in-focus https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Credit card balances crashed in November, according to the latest data from the Federal Reserve. That's a major warning but not about spending. With such a negative signal instead relating to jobs and the labor market, why the hell are LT rates...rising? The answer to the question can be found in Canada and Germany. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

And now for some layoffs to go with the ongoing alarming drop in hiring. More strong evidence the labor market in the US is on the edge of the Beveridge cliff. It may not actually be a cliff in the literal sense, yet all the data points to the economy being at that point...if not already past it. Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

European banks are not acting like either inflation is breaking back out or that the economy is going to be fine and hit its widely-expected soft landing. Instead, what they are doing is the other side of the weak euro. Both are further corroborated by the latest from France and especially Switzerland, with another warning coming from the Swiss on more than "inflation." Eurodollar University's Money & Macro Analysis Bloomberg Traders See Euro Hitting Dollar Parity as Soon as This Month https://www.bloomberg.com/news/articles/2025-01-07/traders-look-past-euro-s-bounce-for-parity-as-soon-as-this-month Bloomberg French Government Tempers Budget Goal to Shelter Economy https://www.bloomberg.com/news/articles/2025-01-06/france-aims-for-2025-deficit-between-5-and-5-5-of-gdp Reuters Swiss inflation falls again, pointing to more central bank rate cuts https://www.reuters.com/markets/europe/swiss-inflation-falls-again-pointing-more-central-bank-rate-cuts-2025-01-07/ https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Canada's Prime Minister resigned, as expected, just as Canada announces more troubling economic data. The whole saga of PM Trudeau's downfall is actually perfectly illustrated by the loonie; and it applies to a lot more than Canada. It's a warning to both existing governments as well as the successors who take over for them after voters have had enough. Eurodollar University's Money & Macro Analysis Fox Canada’s Trudeau announces resignation following party pressure amid criticisms of Trump, budget handling https://www.foxnews.com/world/canadas-trudeau-announces-resignation-following-party-pressure-amid-criticisms-trump-budget-handling Bloomberg Canada’s Economy Shrank in November for First Time This Year https://www.bloomberg.com/news/articles/2024-12-23/canada-s-economy-shrank-in-november-for-first-time-this-year Bloomberg One in Four UK Firms Cut Jobs After Reeves Budget, PMI Shows https://www.bloomberg.com/news/articles/2025-01-06/one-in-four-uk-firms-cut-jobs-after-reeves-tax-rise-pmi-shows Bloomberg Number of UK Retailers in Distress Surge 25% in Fourth Quarter https://www.bloomberg.com/news/articles/2024-12-27/number-of-uk-retailers-in-distress-surge-25-in-fourth-quarter UK Independent Tax and pay hikes to see UK firms pay £2,300 more per low-wage worker in 2025 https://www.the-independent.com/news/uk/home-news/tax-ni-pay-wages-businesses-b2672875.html https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Eurodollar University's Money & Macro Analysis https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Something big happened in late November, impacting markets all around the world. Responsible for the crash in currencies, the collapse in some interest rates, maybe even some modest upset over in the stock market. We have a number of clues to go off, a few suspects to analyze. Eurodollar University's Money & Macro Analysis CNBC Trump vows an additional 10% tariff on China, 25% tariffs on Canada and Mexico https://www.cnbc.com/2024/11/26/trump-vows-an-additional-10percent-tariff-on-china-25percent-tariffs-on-canada-and-mexico.html Truth Social https://truthsocial.com/@realDonaldTrump/posts/113546215408213585 https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

There are huge numbers being thrown around the stock market. Normally you can just ignore them since share prices go up almost no matter what. But these imbalances are now too big to simply dismiss and key sectors in the equity market aren't buying them. Eurodollar University's Money & Macro Analysis WSJ Stocks on Pace for Best Two Years in a Quarter-Century https://www.wsj.com/finance/stocks/stocks-on-pace-for-best-two-years-in-a-quarter-century-c5b5f9b3 NYT Wall St. Sees More Gains Ahead After Another Bumper Year for Stocks https://www.nytimes.com/2024/12/31/business/stock-market-2025-predictions.html Motley Fool Prediction: The Artificial Intelligence (AI) Bubble Will Burst in 2025. Here's Why. https://www.barchart.com/story/news/30123360/prediction-the-artificial-intelligence-ai-bubble-will-burst-in-2025-heres-why ECB Financial Stability Review November 2024 https://www.ecb.europa.eu/press/financial-stability-publications/fsr/html/index.en.html https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

A plunge in Chicago kicks off more concerns over the global car business. Layoffs and plant closures keep coming as automakers are having enormous difficulties first aligning their businesses with the lack of recovery. On top of that, more indications beside Chicago pour in showing falling cyclical demand for cars, too. Eurodollar University's Money & Macro Analysis Reuters Europe's embattled auto sector plans plant closures and layoffs https://www.reuters.com/business/autos-transportation/europes-embattled-auto-sector-plans-plant-closures-layoffs-2024-12-02/ InsideEVs Honda's CEO Struggles To Explain Why Nissan Merger Makes Sense https://insideevs.com/news/745625/honda-nissan-merger-struggling-reason/ Japan trade https://www.customs.go.jp/toukei/shinbun/trade-st_e/2024/2024115e.pdf https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

The biggest surprise of 2024 wasn't any election results nor was it the fact central banks worldwide are more desperately accelerating rate cuts as the year draws to close. Or that other governments and officials are resorting to increasing panicky measures to calm markets in their areas. What caught everyone so off guard about '24 was the one outcome that stands behind all of those things. Eurodollar University's Money & Macro Analysis IMF WEO January 2024 https://www.imf.org/en/Publications/WEO/Issues/2024/01/30/world-economic-outlook-update-january-2024 https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

After facing a major setback, the Reserve Bank of India has ditched its longshot desperation tactic aimed at 'speculators' betting against the rupee. They aren't the problem, the fundamentals are - global fundamentals. There is a lot INR has to say about those as it becomes the latest to plunge. Eurodollar University's Money & Macro Analysis Business Standard RBI dials down use of NDFs to fight dollar, balance rupee stability https://www.business-standard.com/finance/news/rbi-dials-down-use-of-ndfs-to-fight-dollar-balance-rupee-stability-124121800613_1.html Business Standard RBI asks some lenders to reduce speculative positions against rupee https://www.business-standard.com/economy/news/reserve-bank-asks-some-lenders-to-cut-speculative-bets-against-rupee-124112200628_1.html Business Standard Rupee falls to new low of 85.27 as importers stock up dollar at month end https://www.business-standard.com/economy/news/rupee-falls-to-new-low-of-85-27-as-importers-stock-up-dollar-at-month-end-124122600861_1.html https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

More indications of substantial problems for American workers - they can't find any jobs. But why? Moreover, what will it take to get this major hiring freeze to thaw? It isn't rate cuts or lower rates. Nor does it appear the election has worked, either. Consumers plunged back into fears over jobs and incomes in December. Eurodollar University's Money & Macro Analysis NBC News From 'Great Resignation' to 'Great Detachment': How the U.S. job market has slowed https://www.nbcnews.com/business/economy/hard-to-find-a-job-get-hired-why-november-2024-jobs-report-rcna183102 Conference Board US Consumer Confidence Pulled Back in December https://www.conference-board.org/topics/consumer-confidence https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU

Major shift in the Treasury curve with a critical spread uninverting for the first time in years. Bonds and central banks are on the move, which leaves some of Treasury market going the wrong way. And the only reason is Jay Powell. From swaps to other bonds, even something called term premia, the Fed is in the dark while bonds are lighting up. Eurodollar University's Money & Macro Analysis FRBNY Term Premia calculations https://www.newyorkfed.org/research/data_indicators/term-premia-tabs#/interactive Bloomberg Treasury ‘Term Premium’ Gauge Positive for First Time Since 2021 https://www.bloomberg.com/news/articles/2023-09-27/treasury-term-premium-gauge-positive-for-first-time-since-2021 https://www.eurodollar.university Twitter: https://twitter.com/JeffSnider_EDU