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4 Sep 2023

The importance of nominal growth

Source: Barchart

4 Sep 2023

The US mortgage to income ratio (% of disposable income needed to cover the cost of a mortgage) is at its highest level in history

Source: Barchart

4 Sep 2023

Is wage pressure in the US here to stay?

A highlighted by Tavi Costa, the word "strike" recently surged to record levels on Google trends. This surge implies a growing pressure among workers to secure improved compensation deals with their employers. Labor strikes are becoming a regular occurrence in society, reminiscent of their prevalence in the 1970s. The rising cost of living is placing significant pressure on wages to rise. Source: Crescat Capital, Google Trends

1 Sep 2023

Despite surging mortage rates, US home prices are RISING to ALL-TIME-HIGHS

Higher rates are having an INVERSE effect on price. Rather than prices falling with higher rates, they are actually rising. Why is this happening? As explained by The Kobeissi Letter, as rates rise, existing home sales are falling, now down 16.6% at their lowest since 2010. Borrowers are locked-in to sub-3% mortgages and do not want to sell their homes to get a 2.5x higher rate. We need LOWER rates for LOWER prices... Truly a historic occurrence... Source: FRED, The Kobeissi Letter

1 Sep 2023

PCE Deflator, the FOMC's favorite inflation number, show a rise as expected with the YoY at 3.3% (from 3%) and the core at 4.2% (from 4.1%)

Jobless claims at 228k (235k expected) showing continued strength ahead of Friday's NFP report Source: Ole S.Hansen

1 Sep 2023

Disinflation pause?

Eurozone inflation remained stuck at 5.3% in Aug, higher than the 5.1% that economists expected. Core inflation, which excl volatile energy, food, alcohol & tobacco prices & closely watched by ECB as measure of underlying inflation, tumbled to 5.3% in Aug from 5.5% in July, matching expectations. Source: HolgerZ, Bloomberg

31 Aug 2023

We are now seeing the widest spread between mortgage rates and 30-year risk-free rates in history

Should we see this as another barometer of credit tightness in the system? Source: Crescat Capital, Bloomberg

31 Aug 2023

French CPI a little hotter than expected, rising 50bp in August

This was all due to energy (including higher regulated prices) and the end of the summer sales, but services inflation is still easing driven by transports and "other services". FRENCH CPI YOY NSA PRELIM ACTUAL 4.8% (FORECAST 4.6%, PREVIOUS 4.3%) FRENCH CPI MOM NSA PRELIM ACTUAL 1% (FORECAST 0.8%, PREVIOUS 0.1%) FRENCH HICP MOM PRELIM ACTUAL 1.1% (FORECAST 1%, PREVIOUS 0.0%) FRENCH CONSUMER SPENDING MOM ACTUAL 0.3% (FORECAST 0.3%, PREVIOUS 0.9%) Source: Bloomberg

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