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A Bird's Eye View Blog

Fireside Charts: Interest Rate Cut Probability up to 80%, A Weakening Dollar, and Mixed Industrial Production Results in Europe

By:BCM Investment Team | Date:Jun10, 2019 | Category: Equity, Economics, Market Highlights, Fireside Charts

The Fed is indicating that a rate cut is coming and the U.S. dollar is showing signs of weakening. The probability of a rate cute before July's Federal Open Market Committee leaped to over 80%. But is the market too aggressive in its pricing of Fed rate cuts? Germany's April industrial production report was disappointing and now back in negative territory year-over-year while French industrial production is holding up (for now). Finally, the 10 year UST yield is back at its 2017 bottom. Where will it go from here?

 

1. With U.S. interest rates lower across the curve and the bond markets pricing in 3 rate cuts, the U.S. dollar is finally showing signs of weakening...
 

 6.10 chart 6

Source: WSJ Daily Shot, as of 6/6/19

  

 

2. Will the 10 year UST yield hold here at the 2017 bottom or will they revisit 2012 and 2016 levels?

 6.10 chart 7

Source: WSJ Daily Shot, as of 6/6/19

 

 

3. Since our interest rates are ~2% higher than Europe and Japan...

 

 

Source: Bloomberg, as of 6/7/19

 

4. Are the bond markets getting too hopeful?

 

Source: Bloomberg Finance, as of 6/10/19


 

5. How does a trade war directly effect earnings of the S&P 500?  Where are the sales? 

 Source: FactSet, as of 6/10/19

 

     

6. Germany's manufacturing fell back into the red...

 

Source: WSJ Daily Shot, as of 6/7/19

 

 

7. ...while France fought back to positive...

 

 Source: WSJ Daily Shot, as of 6/7/19

    

 

Are you familiar with our Portfolio Manager Dave Haviland? He has over three decades of experience as an advisor and investor which gives him unique perspective as a portfolio manager. Read his insights, backed by raw data and historical market intelligence on ETF Trends.com. 

  

 Insights from BCM PM Dave Haviland 

 

 

 

Disclosure: The charts and info-graphics contained in this blog are typically based on data obtained from 3rd parties and are believed to be accurate. The commentary included is the opinion of the author and subject to change at any time. Any reference to specific securities or investments are for illustrative purposes only and are not intended as investment advice nor are a recommendation to take any action. Individual securities mentioned may be held in client accounts.