morning 8-30

See if you heard this one before Low Unemployment (lowest in 21 years) a beat on monthly retail sales but yet Inflation stuck in the doldrums. This is Japan. They reported these retail sales and unemployment numbers overnight, but yet ministers are still on the wires talking about ways to weaken the yen. The latest is that BOJ could but Foreign Corporate debt and thus weaken yen as they convert currencies for Purchase. Yen -40 Pips. Vice Chairman Fischer on Bloomberg radio and he offered nothing new to the rate hike Rhetoric. He did Not mention September specifically and thus by the admission of this word treasuries caught a small bid. He also said “no way to commit to one and done have to see how data unfolds.” All eyes still on Friday’s payroll numbers.

Let’s stick to the low Inflation story with Germany, She reported Inflation that was below consensus for the Month of August. Bunds and buxls have stayed bid and Euro has traded heavy, down 25 pips. ECB reported that holdings of Debt have approached 1 trillion euros. We keep seeing these weak Inflation numbers speculation will continue to grow of more QE. Ridiculous.
Oil is Bid as 11% of production in Gulf has been shut due to tropical Depression #9.These depression expected to turn into a storm but not strengthen into a Hurricane. Its projected path is one to move across Florida and then out to sea. Watching Heating Oil as talk of Diesel shortages in Europe may cause an Increase in Demand.
• Wheat at Multi year low, Heavy rains in Iowa have caused little concern for Now.
• Yesterday’s price action in the Bonds is due to the continued lowering of the terminal fed funds rate. Some calling for 1.5 in 10 years’ time.

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