Economist (US Macro), RDQ Economics

Conrad DeQuadros

Economist (US Macro)

RDQ Economics

RDQ Economics provides global macroeconomic consulting services with an emphasis on U.S. economic fundamentals and monetary policy.  
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Our views are driven by consistent application of classical economic and monetary principles and has generated superior anticipation of changes in the stance of monetary policy and of movements in economic growth and inflation.
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The founders of RDQ Economics—John Ryding and Conrad DeQuadros—worked together on Wall Street for a decade, in the independent research space for nine years, and have experience in central banking at the Federal Reserve and the Bank of England.  John and Conrad have worked closely with fixed income, foreign exchange, and equity traders and portfolio managers, which has enabled their analysis and advice to be tailored to a clientele that is focused on trading and investment decisions.

Credit

<p>Core CPI prices rose 0.2% in May, as expected, and the year-over-year core CPI inflation rate picked up to 2.2% from 2.1%.  Both owners’ equivalent rent and rent of primary residence rose 0.3%, medical care prices rose 0.2%, new vehicle prices increased 0.3%, used vehicle prices fell 0.9%, and airfares dropped a further 1.9%.  Overall CPI prices also rose 0.2% in May with energy prices up 0.9% and food prices unchanged.  The 12-month headline inflation rate picked up to 2.8% from 2.5%.</p><table class="table table-striped"><tbody>
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<td style="width: 106px;"><p><strong><em>May</em></strong></p></td>
<td style="width: 92px;"><p><strong><em>April</em></strong></p></td>
<td style="width: 96px;"><p><strong><em>Ma</em></strong>…</p></td>
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Core CPI prices rose 0.2% in May, as expected, and the year-over-year core CPI inflation rate picked up to 2.2% from 2.1%.  Both owners’ equivalent rent and rent of primary residence rose 0.3%, medical care prices rose 0.2%, new vehicle prices increased 0.3%, used vehicle prices fell 0.9%, and airfares dropped a further 1.9%.  Overall CPI prices also rose 0.2% in May with energy prices up 0.9% and food prices unchanged.  The 12-month headline inflation rate picked up to 2.8% from 2.5%.

May
April
Ma…



May CPI Review: Inflation Continued to Creep Higher in the U.S.

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<p><strong>Risk correlations and post summit pivots</strong></p><div style="text-align: left;">We wanted to refresh near term risk points as we attempt to coordinate a USD/JPY top, bond price low, USD low and VIX low as noted below with S&amp;P 2,800 tactical fade level. We remain bullish equities but see risk of profit taking on the back of the North Korea/US summit given the G-7 poor outcome.</div><div>
<figure class="editor-figure mceNonEditable"><img class="editor-image img-responsive" src="https://static-prod.smartkarma.com/images/media/000/054/941/original/SUMMIT%20RISK%20FOUR.png?1528786670" data-smartkarma-image-id="54941"></figure><p>USD/JPY - Closed half our recent short at 109.40 yesterday and hit our trailing stop on our 111.30 short at 110.30. We are now flat and looking to sell a spike…</p>
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Risk correlations and post summit pivotsWe wanted to refresh near term risk points as we attempt to coordinate a USD/JPY top, bond price low, USD low and VIX low as noted below with S&amp;P 2,800 tactical fade level. We remain bullish equities but see risk of profit taking on the back of the North Korea/US summit given the G-7 poor outcome.
USD/JPY - Closed half our recent short at 109.40 yesterday and hit our trailing stop on our 111.30 short at 110.30. We are now flat and looking to sell a spike…


Post Summit Hurdles, Pivot Levels and Path to S&P 2,960

<p>Anything other than a quarter-point hike to the fed funds target range on Wednesday would be a shock and market participants will likely be more focused on the Fed's updated economic projections and any forward guidance changes (given that this is where the greater uncertainty lies).  Recent hints by the Fed at possible communications policy changes at some point has caused some commentators to suggest U.S. monetary policy is getting close to neutral and the Fed might be getting ready to pause.  In our view, policy remains accommodative and it is unlikely that the Fed will signal that the hiking cycle is anywhere near coming to an end.  </p>

Anything other than a quarter-point hike to the fed funds target range on Wednesday would be a shock and market participants will likely be more focused on the Fed's updated economic projections and any forward guidance changes (given that this is where the greater uncertainty lies).  Recent hints by the Fed at possible communications policy changes at some point has caused some commentators to suggest U.S. monetary policy is getting close to neutral and the Fed might be getting ready to pause.  In our view, policy remains accommodative and it is unlikely that the Fed will signal that the hiking cycle is anywhere near coming to an end.  

A Fed Funds Rate Hike On Wednesday Still Leaves U.S. Monetary Policy Far From Neutral

<p>Nonfarm payrolls rose 223K in May (with private payrolls up 218K).  The increase was stronger than expected and total payroll gains in the prior two months were upwardly revised by 15K.  The unemployment rate dropped to 3.8% in May from 3.9% in April, while the U6 labor impairment rate fell to 7.6% from 7.8%.  Average hourly earnings increased 0.3% in May and year-over-year wage growth picked up to 2.7% from 2.6%. Total private-sector hours worked rose 0.2%, but hours worked of factory…</p>

Nonfarm payrolls rose 223K in May (with private payrolls up 218K).  The increase was stronger than expected and total payroll gains in the prior two months were upwardly revised by 15K.  The unemployment rate dropped to 3.8% in May from 3.9% in April, while the U6 labor impairment rate fell to 7.6% from 7.8%.  Average hourly earnings increased 0.3% in May and year-over-year wage growth picked up to 2.7% from 2.6%. Total private-sector hours worked rose 0.2%, but hours worked of factory…

U.S. Rates Markets Dealt A Strong Jobs Report For May

US Treasury (10 Yr Generic) / Technical Analysis

<p>Our base case call for the 10yr yield touted a rise to the 3.08%-3.176% projection range with a  fade due above 3.10% and attempting to tie in with our DXY 94.20 fade sequence back to 92.60 if not the 92 support area before we resume the USD rise. Concern lies with the USD not responding in line with the yield fade. We are monitoring gold and base metals for a response to weaker yields and a USD fade sequence.</p><p>Yield/price charts outlined last week showed a clear 5 wave up move, near or at a…</p>

Our base case call for the 10yr yield touted a rise to the 3.08%-3.176% projection range with a  fade due above 3.10% and attempting to tie in with our DXY 94.20 fade sequence back to 92.60 if not the 92 support area before we resume the USD rise. Concern lies with the USD not responding in line with the yield fade. We are monitoring gold and base metals for a response to weaker yields and a USD fade sequence.Yield/price charts outlined last week showed a clear 5 wave up move, near or at a…

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US Treasury (10 Yr Generic) (GT10 GOVT)

May CPI Review: Inflation Continued to Creep Higher in the U.S.

Core CPI prices rose 0.2% in May, as expected, and the year-over-year core CPI inflation rate picked up to 2.2% from 2.1%. Both owners’ equivalent...

RDQ Economics

Post Summit Hurdles, Pivot Levels and Path to S&P 2,960

Risk correlations and post summit pivotsWe wanted to refresh near term risk points as we attempt to coordinate a USD/JPY top, bond price low, USD...

Thomas Schroeder

A Fed Funds Rate Hike On Wednesday Still Leaves U.S. Monetary Policy Far From Neutral

Anything other than a quarter-point hike to the fed funds target range on Wednesday would be a shock and market participants will likely be more...

RDQ Economics

U.S. Rates Markets Dealt A Strong Jobs Report For May

Nonfarm payrolls rose 223K in May (with private payrolls up 218K). The increase was stronger than expected and total payroll gains in the prior...

RDQ Economics

10yr and 5yr Yield Fade Call and Targets

Our base case call for the 10yr yield touted a rise to the 3.08%-3.176% projection range with a fade due above 3.10% and attempting to tie in with...

Thomas Schroeder

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