8-26

 Disruption in the Force??   One of the brightest spots in the Economic Landscape taking a bit of a hit ?

  Mortgage applications in the United States slipped by 6.5 percent in the week ended August 21st, the most since the week ended June 19th and following a 3.3 percent drop in the previous week, data from the Mortgage Bankers Association showed. Applications to refinance a home loan fell 10.2 percent while homebuyer mortgage applications increased 0.4 percent. The average fixed 30-year mortgage rate edged down 2 bps to 3.11 percent.-Trading Economics

 Hurricane Laura  Shifting a bit north Easterly   and possibly not directly hit some of the refineries in in South East Texas. roughly 12% of U.S. refining capacity shut in (BBG)  its not the winds that could delay reopening of Facilities it is the rain and possible floods.Gasoline,RBOB giving back some of the recent gains trading lower  3.3 % as the path of laura a  bit less worrisome for refienries  at least for now.  Human side of story  “ More than half a million people have been ordered to evacuate the U.S. Gulf Coast, with Hurricane Laura set to come ashore tonight in Texas and Louisiana.”-pro Farmer

 Long End Bonds and ultras bunds and Buxl also on the offer again today. One of the reasons is the expectations that Powell will announce an New Inflation targeting regime, backed up by Inflation Hawk Ester comments this morning, thus allowing an  overshoot of the 2% target thus creating and Average level of 2% inflation .Long end does not like inflation a so possibly position adjustments being made

 Inflation hawk K.C. president Mester “ “I have never thought of 2% as a ceiling but to really stay     focused on what anchors inflation expectations in the economy,” George said in a Bloomberg Television interview with Michael    McKee broadcast Wednesday,  Further   from BBG “Esther George, who has been among the most hawkish Fed policy makers, doesn’t oppose some overshooting of the central bank’s 2% inflation target and sees more risk of price pressures
being too weak than too strong.”

 Hmmm ..  Dollar is rallying a bit today Sell the rumor buy the news scenario?? Possibly?  todays Durable good orders beat consensus Business spending proxy, capital good orders and shipments also better then consensus. So plenty of reasons here for dollar to catch a bid.

Markets.. Stronger dollar trade accordingly

From Mizuho

  China copper demand increased 8.6% y/y in Jul, the fastest growth since Feb 2017, a Street analyst said in a note. China’s retail sales of passenger cars averaged about 37,000 vehicles per day in the first three weeks of Aug, rising 12% from the same period last year, according to the China Passenger Car Association. EU governments are extending job-support programs, with Germany earmarking $12 billion for its latest effort – Bloomberg. The focus increasingly turns to what support the U.S. will extend, with companies moving forward with mass job-cut plans. Shares in US homebuilders have surged to record highs, past their peak set during the subprime bubble in 2005 – FT.  

 More News

  • Germany: Extends virus relief for the economy inc help for SMEs until end of this year & extending wage support program until end of next year (was due to expire Mar ’21) https://reut.rs/3aYy7Ti
  • Jackson Hole full agenda will be published at 1.00 BST Thur morning https://bit.ly/3gxKnem

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