Michael Woolfolk
Michael Woolfolk
asian bank central continued demand elevated ensures foreign oil prices remains strong
We see that elevated oil prices and a continued Asian central bank intervention ensures that foreign demand for U.S. treasuries remains strong during January.
continued fully globally hike hikes interest march positive rate talk
The hike in March is fully priced in. The hike in May is over 80% priced in. There is already talk of continued hikes after that. Interest rate differentials globally are increasingly favoring the U.S. and it's positive for the dollar.
continued dollar importance interest labor market rally rate report respect
The dollar rally after the non-farm payrolls report underscores the continued importance of labor market tightness with respect to interest rate expectations.
change consistent data fed
Our Fed watchers say there's a consistent story that the Fed is one and done. Today's data doesn't change this story.
backing dollar economic economy likely rate strong
There are strong economic fundamentals backing not only the U.S. economy but the U.S. dollar right now. We are likely to get two more rate hikes.
caught data heavy market players week wrong
Market players don't want to be caught the wrong way here going into a very heavy data week in the U.S..
below compelling concerned drifted further hike interest levels next rates reason start
Unemployment has drifted further below 5 percent, and at those levels you have to start being concerned about bidding up of wages. There's a compelling reason to hike interest rates at the next meeting.
exceeded knew september turn worst
We knew that there were going to be some hurricane-related distortions in the September data, but this really exceeded our worst fears. This was a turn for the worst.
asian bonds conscious demand dollar greatest market policy remains soon threat time unlikely whereas
Whereas Asian demand for US bonds is unlikely to end any time soon as a conscious policy decision, the reversal of petrodollars from the US bond market remains the greatest threat to the dollar in 2006.
dollar fed markets trend until
We won't see the dollar embarking on any new trend until the markets get a better sense of where the Fed is headed.
account bush capable current cutting decline deficit destined unless
Unless the Bush administration is capable of cutting the current account deficit in half, the dollar's decline is destined to continue.
believe curve people recession signal wrong yield
The people who believe that the inversion of the yield curve is a signal of recession have it wrong this time.
durable favorable gains given goods growth interest january market positive rate recent unlikely weigh
Given the recent spate of positive January data, CPI and durable goods are unlikely to disappoint. The USD is positioned to make new gains ... as favorable U.S. growth and interest rate differentials weigh on market sentiment.
market tape
But the tape will not be as important to the market as new data.