Recession? The Market Is Wrong

Bank Of America’s Brian Monihan has said it precisely: “We have nothing to fear about a recession right now except for the fear of recession.” The Fed bond buying and Algorithms have inverted the yield curve. The government’s latest gross domestic product report showed wages and salaries in the first half of the year grew at the fastest pace in more than a decade. Read Full Strategy: http://bit.ly/2z4mbx1

JPY: Get Ready For More Upside

The yen was sent for a wild ride today as the currency fell sharply at the start of European trading amid a recovery in risk sentiment • The quick jump from 105.90 to 106.78 stalled at the 38.2 retracement level before settling lower around 106.20-30 • But after China issued a statement on trade/tariffs, the yen gained as Treasuries pushed higher with yields and equities both sinking • Right now, US 10-year yields are down at the lows for the day by over 6 bps to 1.515% • We Are Able To Buy JPY 10-15% below market using Interbank FX Options – PM For Details • Email Now To Access Our Next JPY Algo Trade Alert: inquiries@ppchk.net

Can Your Wealth Advisor Make 8.85% On An FX Trade?

The Commonwealth Bank of Australia now expects the Reserve Bank of Australia To Cut Interest Rates In Nov and Feb, Taking The Cash Rate To 0.5% • At the current spot rate of $0.6782, we are able to Sell AUDUSD above $0.7119 using Interbank FX optionsTarget: $0.65. Profit Potential: 8.85% PM Us Now For Details Or Email To Arrange For A Call: inquiries@ppchk.net

Recession? Yield Curve Inversion? You May Be Wrong

A yield curve inversion when a longer-term bond yield sinks below that of a shorter-term bond’s yield. The two most watched sections of the U.S. Treasury curve—the difference between 3-month and 10-year yields and the difference between 2-year and 10-year yields—have now inverted, though the latter only inverted briefly

The yield curve, however, may be a less reliable indicator than in the past. Our Algo warns that the Federal Reserve’s bond buying, which may have distorted the market, as one reason it might be different this time. Investors should also take note that recent economic data has held up despite the inversion of the 10-year/three-month portion of the curve

In a note released Wednesday morning, Tom Porcelli, chief U.S. economist at RBC Capital Markets, highlights how this instance is different from past yield curve inversions. In the past, the curve was a gauge of U.S. economic growth, but these days it is being driven by what’s happening around the world. “What this means is the United States is able to finance relatively good rates of DOMESTIC growth at GLOBALLY suppressed interest rates,” Porcelli writes. “This type of dynamic has historically been very positive for asset inflation…So, no, we are not on recession watch because of this dynamic.”

Jay Bryson, acting chief economist at Wells Fargo Securities, argues that the 10-year yield would be much higher without the Fed’s bond buying. The central bank still has more than $2 trillion of Treasuries on its balance sheet, which has made the 10-year yield 0.25 to 0.5 percentage point lower than it would be otherwise, by Bryson’s math. “In other words, the yield curve may not be inverted at present if not for the Fed’s QE [quantitative easing] purchases on its balance sheet,” he explains

How To Profit From A Recession? Which Companies Will Do Well In A Recession And/Or Stock Market Drop? Email Now To Access Our Next Algo Trade Alert: inquiries@ppchk.net