SPECIAL NOTE: This forex news aud jpy forecast february 16 2016 be the last edition of “Weekly Indicators” to be posted as XE. Beginning next week, Weekly Indicators will be published exclusively at Seeking Alpha.
May data included a small decline in industrial production, but a steep rise in retail sales, even after inflation, which rose to 2. Both business sales and inventories increased. Consumer sentiment as measured by the University of Michigan increased as well, but it was all about current conditions. Now-cast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. They are also an excellent way to “mark your beliefs to market. In general I go in order of long leading indicators, then short leading indicators, then coincident indicators. NOTE that I include 12 month highs and lows in the data in parentheses to the right.
Mortgage rates and treasury bonds are still both negatives. I have switched it from positive to neutral. The only remaining positive is the yield curve. Refi has been dead for some time. Purchase applications were strong almost all last year, began to falter YoY in late December, but rebounded during spring, ultimately making new expansion highs. I will downgrade back to neutral.
Since 2010, both real M1 and real M2 were resolutely positive. Real M2 growth has fallen below 2. M1 growth this week was again below 3. YoY, but increased significantly this week so that on a 6 month basis it has returned to a positive. The Chicago Fed’s Adjusted Index’s real break-even point is roughly -0. In the leverage index, a negative number is good, a positive poor.
The historical breakeven point has been -0. All three metrics presently show looseness and so are positives for the economy. It went mainly sideways afterward until briefly spiking higher after the US presidential election. Both measures had been positives since last summer, but this week the broad measure turned netural. Commodity prices bottomed near the end of 2015.