April 15. Tim-BERRRRRR!!!!
Attached is a chart of Lumber, which has gone from 330 to 250 just this year. Like a lot of other commodities, it’s crashing and to the casual observer probably NOT indicative of a robust residential construction market.
–The news this morning is mostly about China, which grew at 7% in Q1, “…its slowest pace in six years, and weakness in key sectors suggested the world’s second-largest economy was still losing momentum.” (Reuters) Retail Sales and Industrial Production have come in below expectations…in China that is, but…
–In the US, Retail Sales were also softer than expected, though due in large measure to lower gas prices. Yields fell, with tens down 3.5 bps to just over 190. The blue euro$ pack was the star performer, up 5 bps on the day, and implied vol continued its descent, with June Five yr vol now under 3%.
–Today’s news in the US includes Fed speakers with Bullard at 9:00EST and Fischer (on macro-prudential tools) at 10:40. Industrial Production expected -0.3 from +0.1 and then, capping it all off, the Beige Book.
–Every time I see “macro-prudential tools” it reminds me of the Far Side cartoon with two cavemen, one handing a rock to the other. The caption is, “I told you to get me a crescent wrench. THAT’S not a crescent wrench…well, maybe it is” Or this one:
