The Constant in the PI, CPI
Whereas US appears to be a Resilient economy with sceptical sentiment., the rest of the world is swinging into an era of upbeat sentiment amidst fragile economy.
The "no one watches" kind of data conveys timely information - NFIB small business optimism index for March fell to 88.5 from 89.4 -softest read since Dec 2012 - 27th consecutive month below the long-term average of 98. (Small businesses employ nearly half of entire American workforce and represent 43.5% of America's GDP)
Higher Selling Prices jumped by 7 pts to 28%, a 5-month high - Higher inflation is back as the top worry - hence CPI inflation would sustain its spike as this measure is highly correlated with CPI - So elevated readings in Jan & Feb not an aberration - price pressure is more firmly embedded.
It’s just getting curious that there has not been a single dissent in last 14 FOMC meetings, dating to June 22 - uncommon unanimity in Fed with no dissents - other such long stretches with no dissents : 2004-05 & 1999-early 2001 (Greenspan)- later on, the reports showed policy makers were low on confidence - just toed Chair's line - all Yes men normally sow seeds of a crisis - anyway stale FOMC minutes today.
USD index resilience -neither breakout nor a reversal into the summer. Carry as a strategy for now.
April bank lending survey shows that bank lending to continue to flatline in the current weak economy & high rates. Bund yields have been creeping up, with the 10 year just short of 2.46% - highest level seen this year. Monday's 1.0821 European low & Fri 1.0791 base support while 1.0884, 61.8% of Mar/Apr fall & 1.0885 NY high resist.
Reports China reluctant to stimulate economy as it sees its prior support as a failure and waiting for natural forces to help steady the real estate market -So the exchange rate regime is less likely to shift.
Weak economy with a strong sentiment Cheerful mood - Retail Sales for food items rose sharply in March due to early Easter, while overall demand subdued.
OBR forecasts UK economy to grow by 0.8%. -static resistance at 1.2675.
Ueda: We might need to change monetary policy if fx moves lead not just to rising import prices, but risk pushing up trend inflation more than expected - hint that the break of 152.00 won't trigger intervention.
Load up for break above 152.00 for upper 30-day Bolli, now by 153.30 before 155.20.
USDINR crawls back into the lower end of the range - back to being in static stability from a short-lived phase of dynamic stability.