US economic momentum continues to print at a modestly positive level through the end of July, based on a markets-based estimate of macro conditions. The Macro-Markets Risk Index (MMRI) closed at +5.9% yesterday (July 30). The current level is in the lower range for the past year, although MMRI remains comfortably above zero, which implies that business-cycle risk remains relatively low. A decline below 0% in MMRI would indicate that recession risk is elevated while readings above 0% imply that the economy will expand in the near-term future. Analyzing market-price data in the financial and commodities markets with a probit model also suggests that macro risk is low.
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US economic growth rebounded in the second quarter, but the Treasury market isn’t convinced that GDP’s 2.3% advance in the April-through-June period is the catalyst that will bring a rate hike at the Fed’s monetary meeting in September. The benchmark 10-year yield ticked lower yesterday (July 30), settling at 2.28%, according to Treasury.gov data. That’s a touch below Wednesday’s close and well below the recent high of 2.50% that was briefly touched in June.
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● US Q2 GDP rises 2.3%…
● The Q2 gain keeps a September interest rate hike in play…
● But some analysts are looking past September for first rate hike…
● Meanwhile, US jobless claims tick up from four-decade low…
● And Bloomberg’s Consumer Comfort Index tumbles to lowest level since Nov…
● While 1-year inflation in Europe stays mildly positive and jobless rate is elevated but stable.