If the trillions spent on QE had reached the real economy
US...Janet Yellen’s speech on Friday was largely unremarkable, apart from the underlying feeling she and the FOMC still don’t have a clue what is happening with the US economy, because it doesn’t fit their model of economic theories. Whether as an experiment, or as a last ditch attempt to fit square pegs in round holes, Yellen said it's useful to consider the benefits of a ‘high-pressure economy’......Following last week’s Non Farm Payroll data, the release of the Fed’s LMCI (Labour Market Conditions Index), suggests November’s and December’s meetings will be as close as September’s, especially as Yellen and the FOMC have already been accused of playing politics...
Corporate profits are in recession and consumers will never feel confident whilst wages are in doubt, having relied on disinflation to maintain living standards. Employment is not certain for the many self-employed, part-time, or zero hours contract workers, whilst minimum wages are still being campaigned for; therefore, consumers have been unwilling to spend, preferring to increase savings, whilst global trade is suffering its 5th straight year of sub-3% growth.
Brexit... Macro Thoughts considered UK 10year Beakeven swaps at 2.36, which traded to 3.12 this week....
Europe... The movement towards a new Europe, led by new politicians and backed by Europe’s voters, could be enough to bridge the gap over the English Channel, making Article 50 negotiations positive, rather than a confrontation.
Asia... Tensions will be high at the BRICS meeting, as China looks to extend its influence in trade by promoting the ‘Silk Road’...
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