Philippe Waechter (Natixis AM) | The CFNAI index, calculated by the Chicago Fed, is the best measure of the economic situation as it is. It is a composite of 85 indicators published in one month. It includes industrial production, retail sales, employment and many more. It is published late compared to the surveys, but it perfectly reflects the state of the business cycle. It reads on average over 3 months and when it is greater than -0.7, the probability of recession is almost zero. Below this threshold, the risk of recession is high. See here for more details. In April, the index dropped more than 10 points to -16.74 from -4.97 in March. Its three-month average was -7.22 compared to -1.69 in March. The indicator is well below the threshold of -0.7. As the graph shows, The index is also well below the measures observed in 2008/2009. The shock is of a different kind and magnitude never before seen. This curve has the same pace as that of employment which in April contracted by 20.5 million.
LONDON | Barclays | The US dollar strengthened after the FOMC left the door open for a September move, although it did not provide any strong signal for the timing of the first hike.
SAO PAULO | By Marcus Nunes via Historinhas | In The Risks to the Inflation Outlook SF Fed researcher Vasco Cúrdia writes: the median inflation forecast is not expected to return to the FOMC target of 2% until after the end of 2016. The uptick in inflation in the first half of 2014 could lead one to believe inflation is finally on the path back toward its target. However, inflation has shown similar patterns several times before and each time the uptick has never lasted very long. According to this model, we should not see inflation begin to recover more firmly until around the end of 2015.
SAO PAULO | By Marcus Nunes via Historinhas | NGDP and RGDP trends are rather similar in both countries. The main question is: Why is the UK´s labor market so much more exuberant?
MADRID | Bankinter Analysis | 3Q Perspectives. Economic cycle speeds up and, mostly, gains soundness and reliability. Global growth will consolidate in 2014/2015 by +3%/+4% with positive news for developed countries and less favorable surprises in emerging markets. Japan and India are the exception to this rule. Spain will also amaze and main economic risk will lie in regional regional integrity issues whose aftermath may be undervalued, regardless the final scenario.
BEIJING | By Andy Xie via Caixin | The world has depended on Chinese and American stimulus for years, and one implication of their tightening is a slowing global economy in 2014
SAO PAULO | By Marcus Nunes | The fact that Ms Yellen is a dove today does not imply that she would tolerate rising inflation tomorrow. She will need to persuade the markets, and the public, of that in the coming weeks.
BERKELEY | By Carola Binder | The author compares the fiscal crisis in the 1840 in the US with what happened in the euro zone. Back in the XIX century state governments in America saw infrastructure projects fail and land values and tax revenue fell further, eroding their fiscal positions, making it harder for them to issue bonds and forcing them to pay higher interest rates. Something similar to what Greece is suffering.
NEW YORK | “Warren is in the house” was his first twit. Within 24 hours, 82-year-old Warren Buffett had only posted two messages on the social network but he got more than 311,400 followers.
Nine media outlets write a letter to Mitt Romney campaign challenging the exorbitant bills they had to pay in order to follow the Republican candidate before the US election