Consumer Economy
None of my usual series appeared this week.
Credit & Rates
- Total Bank Credit (TOTBKCR) 19.35T +2.7B (+0.01% w/w)
- Fed Balance Sheet (WALCL) 6.66T +1.2B (+0.02% w/w)
- US 30 Year Mortgage Rate (MORTGAGE30US) 6.38% +16 bp
- 3-Month Treasury (DGS3MO) 3.70% -4 bp
- 1-Year Treasury (DGS1) 3.78% -2 bp
- 10-Year Treasury (DGS10) 4.42% +3 bp
- 20+ Treasury ETF (TLT.N) -0.22% w/w
There was almost no change in bank credit. If it continues, that’s deflationary.
How about Fed Money Printing? Tiny change this week; about 1% per year, annualized.
The 30-year mortgage rate jumped 16 basis points – this series lags the Treasury yields by about a week. Mortgage rates are up about 40 basis points in March. While we’re still well below the top of 7.04% set last year, the trend is not your friend for housing.
Money moved into the short end of the curve [3M-1Y], and out of the long end [5Y-20Y]. It suggests a move to safety in the short term, and an ongoing concern about inflation in the longer term. The (relatively minor) move out of the long end resulted in TLT losing 0.22%.
CME Fedwatch Tool projects a 4% chance of a rate increase on the April 29th meeting.
Currencies
The buck rallied 0.52 [+0.53%] to 99.98. The buck was hit hard on Monday [-0.73], but then rallied back for the next 4 days, erasing all the losses, ending up nicely on the week – almost back to round number 100. Maybe the flows into the dollar this week helped ease the flight out of longer-dated bonds?
My sense: the international capital flows that caused this week’s dollar rally are likely driven by the projected energy shortage impacts for each country or region. For example, the big move out of AUD sure lines up with the experiences we’ve heard from our members in Australia.
Losers
- AUD 0.69 [-0.0146 -2.08%]
- INR 94.86 [+1.1256 +1.20%]
- CAD 1.39 [+0.0144 +1.05%]
- CHF 0.80 [+0.0077 +0.97%]
- JPY 160.10 [+0.8358 +0.52%]
- RMB 6.91 [+0.0261 +0.38%]
- EUR 1.15 [-0.0022 -0.19%]
Note that the currency pairs that FRED provides place USD in either the numerator or the denominator. Example: DEXUSAU = USD/AUD: negative is bad if you are holding AUD. DEXINUS = INR/USD: positive is bad if you are holding INR. I have no idea why they don’t do things the same way with each
by davefairtex 
