We’re taking the rest of the week off - Happy Thanksgiving to those celebrating! The next newsletter will be out next Tuesday.
Chart of the Day
There has been a sharp rise in bond yields in recent weeks as traders price in a more hawkish Fed, but these signs of higher US borrowing costs have also put pressure on global markets. For instance, the main cyclical currencies have all been falling sharply, and main commodities have also done badly. At the same time, the latest US data is looking very strong. The Atlanta Fed GDP Nowcast is at 8.2% annualized. Despite that strong US growth rate, these concerning global signs suggest investors are worried about outlooks elsewhere, such as in China.
US existing home sales increased by 0.8% MoM in October, which left them 5.8% lower than a year earlier.
Eurozone consumer confidence is falling sharply.
UK manufacturing production fell to 2.8% YoY.
US bond yields have been rising again, especially at shorter term rates.
It’s been a mixed picture across the world.
Real yields have been rising as inflation breakevens fall.
The rise in real yields has hit the Nasdaq harder than the other markets.
Higher real yields in the US keep hitting the euro too.
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