Ugly start to the US week for the dollar
It's getting worse for the US dollar by the minute.
The factory orders numbers were fine but they're being used as a reason to dump the dollar once again.
I noted earlier that the bond market was not in a good mood and that sentiment is spilling over to the US dollar. Ten-year yields are now down 8 bps to 2.08% and touched the lowest since the US election. A big driver was Brainard, who has a reputation as a dove but she's a critical vote around the table and represents the core far more than someone like Bullard or Kashkari.
"There is a notable disconnect between signs that the economy is in the neighborhood of full employment and a string of lower-than-projected inflation readings," she said today. "I will want to take some time to assess the path of the federal funds rate that will best support a sustainable move in inflation to our 2 percent goal."
She also said that Harvey would cloud the outlook.
But it would be unfair to blame everything on Brainard. After all, stock markets are falling and they would normally like lower rates. The S&P 500 is at a session low, down 12 points to 2464.
Finally, Congress has truly bitten off more than it can chew. According to Bloomberg's Sahil Kapur, here are the things that need to be done before the end of the month or shortly afterwards:
- Harvey relief
- Fund govt
- Raise debt limit
- Extend CHIP
- Renew FAA
- Flood insurance $
- Stabilize ACA
- Tax cuts/reform
- DACA
And we might be adding Hurricane Irma relief to that list.
