Treasury Secretary Janet Yellen expressed confidence in the Federal Reserve’s fight against inflation and said she doesn’t see any sign that the US economy is in a broad recession. “We’re likely to see some slowing of job creation,” Yellen said on NBC’s “Meet the Press” on Sunday. “I don’t think that that’s a recession. A recession is broad-based weakness in the economy. We’re not seeing that now.”. With US consumer prices rising at the fastest rate in four decades, a growing number of analysts say it will take a recession and higher joblessness to ease price pressures significantly. The Federal Reserve raised rates in June by the most since 1994 and is expected to approve another 75 basis-point hike this week. Inflation is “way too high,” Yellen said, while renewing the Biden administration’s argument that it’s also high in many other advanced economies. “The Fed is charged with putting in place policies that will bring inflation down,” said Yellen, a former Fed chair. “And I expect them to be successful.”

함의: 옐런은 고용 창출이 다소 둔화 될 수 있으나 전방위적 부진이라 할 수 있는 경기침체의 신호는 보이지 않으며, 중앙은행은 물가를 통제해야 하고 그럴 수 있길 바란다고 함.

The won looks set to extend declines from its recent 13-year low as South Korea’s trade balance worsens and foreign investors pull money out of the nation’s stock market. Repeated interest-rate hikes by the Bank of Korea haven’t been enough to stem the rot, with the won dropping about 9% this year as global investors shift into dollar assets. It’s among Asia’s worst performers as investors increasingly focus on the trade deficit, which reached record $10 billion in the six months through June. Bank of America Corp. strategists including Claudio Piron see the currency weakening around another 3% from present levels to 1,350 per US dollar by year-end. Citigroup Inc. economist Jin-Wook Kim projects an even faster depreciation to 1,350 within three months.

함의: 무역수지 적자와 외국인 자금이탈로 13년래 최저로 절하 된 달러 대비 원화가치에 대해 BofA는 연말까지, Citi는 3개월래 1,350원으로 추가 절하 될 것으로 봄.

Investors are skeptical that the Federal Reserve can tame the worst inflation in four decades without driving the economy into a recession. That’s bad news for Americans, who face the prospect of a downturn as their bills for food, rent and fuel swell. But to bond investors hit by deep losses this year, it may mean any further pain will be short-lived, as a recession will spark the US central bank to cut rates next year. That’s according to the results of the latest MLIV Pulse survey. Over 60% of 1,343 respondents in the survey said there’s a low or zero probability that the US central bank can rein in consumer-price pressures without causing an economic contraction. The survey was conducted July 18-22 and included retail and professional investors.

함의: 설문 조사에 따르면, 중앙은행이 경기수축 없이 인플레이션을 통제할 수 있을 확률은 매우 낮거나 아예 없다고 응답한 비율이 60%에 달함.

The most educated generation in China’s history was supposed to blaze a trail towards a more innovative and technologically advanced economy. Instead, about 15 million young people are estimated to be jobless, and many are lowering their ambitions. A perfect storm of factors has propelled unemployment among 16- to 24-year-old urbanites to a record 19.3%, more than twice the comparable rate in the US. The government’s hardline coronavirus strategy has led to layoffs, while its regulatory crackdown on real estate and education companies has hit the private sector. At the same time, a record number of college and vocational school graduates—some 12 million—are entering the job market this summer. This highly educated cohort has intensified a mismatch between available roles and jobseekers’ expectations. The result is an increasingly disillusioned young population losing faith in private companies and willing to accept lower pay in the state sector. If the trend continues, growth in the world’s second-largest economy stands to suffer. The sheer number of jobless under-25s amounts to a 2% to 3% reduction in China’s workforce, and fewer workers means lower gross domestic product. Unemployment and underemployment also continue to impact salaries for years—a 2020 review of studies reported a 3.5% reduction in wages among those who had experienced unemployment five years earlier.

함의: 역사적 수준의 고학력 젊은이가 이례적 실업을 겪으며 민간기업에서의 도전을 회피하고 더 낮은 임금의 정부 소유 기업으로 진입하려 하면서 중국 노동시장의 불균형과 성장동력 훼손이 우려 됨.

"Boys, be ambitious!"

AUD/JPY looks too high in the face of a slowing global economy. OECD’s leading indicator has been a useful indicator in the past 15 years not only for the group’s economies but also for Aussie-yen, which is sensitive to ups and downs of investor risk sentiment. Signals from the gauge that growth momentum had either started to ease or pick up roughly coincided with changes in the direction of AUD/JPY in 2007, 2009, 2011, 2012, 2015, 2016 and late 2017. But this time around, the pair has been rising despite a steady decline in the leading indicator since July last year. Australia was the biggest provider of coal and gas for Japan in the fiscal year ended March 31 as Japan relied on them for electricity generation. This resource demand may continue to help AUD/JPY defy downward pressures on global growth for a little while, but a growth slowdown should eventually reduce commodity prices, cut Japan’s import bills and drive down AUD/JPY.

함의: 오즈는 투자자의 위험에 대한 선호/회피 지표로 훌륭했고, OECD 선행지수와 궤를 같이 했지만, 일본의 에너지가 전력에만 의존하며 생긴 수요에 의해 성장 둔화에도 불구 강세로 왜곡 된 폭이 큼.

There's No Need to Fear the Italexit Zombie. There's a lot of things to worry about in the wake of another government collapse in Rome — but, please, let's expunge Italexit from the list for good. The concept is a familiar one for investors: At a moment of political stress, Italy could crash out of the euro and return to the old lira as a result of bad government decisions, be it by design or accident. If Italexit were to manifest — or even approach reality — it would trigger an unprecedented crisis for both the single currency and the Italian economy. Except it won't happen. In fact, the challenges facing the next government are so big, their hands are full — and tied. And considering the level of bickering we’re about to see as the campaign gets underway, they probably could not even agree on how to exit even if they wanted to.

함의: 유럽의 노이즈 중 하나인 이탈리아의 유럽 연합 탈퇴는 걱정하진 말자는 의견임.

Bitcoin sank back into the doldrums of a one-month-old trading range between $19,000 and $22,000, part of a wider cryptocurrency selloff.
The largest digital token fell as much as 4.3% on Monday and was exchanging hands at $21,820 as of 12:15 p.m. in Singapore. Second-ranked Ether and smaller virtual coins like Avalanche and Solana nursed larger declines. Crypto may again be at the vanguard of swings in riskier investments ahead of an expected Federal Reserve interest-rate hike on Wednesday and a slate of earnings from megacap technology firms in the US amid a slowing economy. The past two rate increases by the US central bank ended up sapping market sentiment. Poor earnings could also drag down tech shares and Bitcoin given the correlation between the two. That said, some prognosticators continue to believe the worst of Bitcoin’s selloff is over after a 53% plunge this year.

함의: 연 초 이후 -53% 하락 한 지점에서 바닥을 확인했다고 믿는 이가 많지만, 중앙은행의 금리인상과 대형 기술주의 실적발표를 앞두고 대량 매도 구간인 19k~22k로 다시 하락함.

German business confidence deteriorated to the worst level since the early months of the pandemic on growing concerns that record inflation and limited energy supplies from Russia will throw Europe’s biggest economy into a downturn. A gauge of expectations released Monday by the Munich-based Ifo Institute fell to 80.3 in July from 85.8 in June. Analysts had predicted a drop to 83.0. An index of current conditions also dropped. “Germany is on the brink of a recession,” Ifo President Clemens Fuest said. “High energy prices and the threat of gas shortages are weighing on the economy. Companies are expecting significantly worse business activity in the coming months.”

함의: 독일 기업 신뢰 지수는 대확산 초기 수준까지 수축되며 경기침체를 눈 앞에 두고 있다는 우려를 키움.

Speculators aren’t buying the latest rally in longer-dated bonds, even amid the threat of recession. Net-short non-commercial positions in so-called ultra-long Treasury futures -- bonds with at least 25 years to maturity -- hit a two-year high last week, according to data from the Commodity Futures Trading Commission. That’s even as 30-year US yields dropped back below the 3% level from a mid-June high of over 3.4%. Futures positioning aren’t always a clean read -- they are often are used to hedge cash bond positions -- but the leveraged fund data also show a similar bearishness.

함의: 선물 포지션을 명확히 분석하기 어려우나, 경기침체 우려로 30년물 국채금리가 하락하는 동안에도 투기적 수요는 장기채권 매도(Short) 포지션을 2년래 최대치까지 늘렸음.

Earnings estimates are dropping and that’s a good thing for stocks, because it reflects a more realistic outlook on corporate profits, removing some of the downside. But they need to fall further before they align with gloomier economic views. Full-year annual growth estimates for US stocks have dipped to 10.1% from 10.7% a month ago but remain about 1.2 percentage points higher than at the start of the year, per Bloomberg Intelligence data. That’s as economists have lowered their forecasts for GDP growth to 2% this year from 3.9% and stocks plunged into a bear market. The disconnect has upped pressure on strategists to temper their views.

함의: 기업 성장률 전망치가 하향되었지만 여전히 연 초 대비 +1.2%p 높은 수준, 다만 경제성장률 전망치가 연 초 3.9%에서 2.0%로 낮춰진걸 감안하면 추정치는 여전히 현실과 괴리가 크다고 봄.

Earnings Estimates Are Slowly Coming Back to Earth.

Russia is further curbing natural gas flows on the Nord Stream pipeline  just days after bringing the link back from maintenance, escalating European concerns over a supply crunch this winter. Gazprom PJSC will cut flows via the link to Germany to about 20% of its capacity from 7 a.m. Moscow time on Wednesday, the Russian gas giant said in a statement. One more gas turbine, crucial for the supply, is due for maintenance and will be taken out of service, according to the company. Gas had been flowing through the link at about 40% of capacity since it returned from 10 days of maintenance on July 21. That’s about the same level as before the works. 

함의: Red mafia 자식들...