Mohamed El-Erian

France has taken center stage these days among the G7's three most bond-sensitive economies, with the French-German 10-year spread moving more than 50 bps in the last month. (The other two economies are Japan and the UK.) #economy #markets #france #eurozone #europe #bonds #yields

FYI: Some of the links to this morning's conversation on Yahoo Finance. https://t.co/x6VvRYRyAc https://t.co/JCcakw6t1G https://t.co/IUtlA0AtlF #economy #markets #jobs #federalreserve #employment

This is a good example of domestic political considerations and geopolitical pressures driving an economic policy decision in this era of geo-economics. Releasing these strategic reserves helps partially shield consumers from soaring prices, but it’s also a high-stakes, longer-term economic risk: G7 leaders are betting supply conditions normalize before winter demand truly bites. #economy #energy #oil #inventories #geoeconomics #markets

Here’s the US Treasury market reaction to the soft jobs report. Note the continued retracement in 2-year yields as traders moderate Fed rate hike expectations. The next major data catalyst here will be CPI inflation on October 14th. (Bloomberg data below.) #economy #markets #bonds #inflation

The US jobs data is out and there are surprises: Job creation was only 29,000 in September, with the unemployment rate rising to 4.2% and monthly earnings growth moderating to only 0.1%. Add to that downward revisions to both July and August (about 60,000 jobs). On the supply side, a more encouraging development with labor force participation increasing to 61.8%. This will reinforce the impact of recent Fedspeak in calming expectations about an October rate hike. #economy #markets #jobs #employment #earnings

On inflation data, while most of us will wait for Japan's national data, I suspect the Bank of Japan will pay attention to the Tokyo measures released overnight. Tokyo core CPI jumped to 2.7% (versus a 2.4% consensus forecast and 1.8% prior), its highest level in 10 months. #economy #japan #inflation #markets

👇🏼

On the worry I've mentioned before that interest rate risk may morph into credit/spread risk: Bloomberg: "Credit markets are showing signs of caution, as investors pull back from treating high-grade debt as a bastion of safety amid lingering worries about record borrowings and inflation." #economy #markets

Among the notable price moves early this morning, Brent crude oil has joined WTI in trading below $100 a barrel (with WTI itself declining below $90). As regards refined products, the national average price for diesel in the US has fallen to $6.37 a gallon. #oil #economy #markets https://t.co/xK2HLgte0C

While on Europe, annual eurozone inflation rose from 3.2% in August to 3.8%. Driven mainly by energy prices, the September print topped the consensus forecast of 3.6%, adding pressure on the ECB as economies deal with higher borrowing costs. #economy #markets #inflation #europe

Further to earlier posts on G7 fragilities, this from Bloomberg: "The country’s 10-year yield has risen more than one percentage point since June, its worst quarterly performance since the birth of the single currency. The premium investors charge to hold those bonds over equivalent German bunds has soared, and is on track for a record weekly widening." #economy #markets #france #bonds #yields

What happens when a CNN conversation on the global economy and markets suddenly shifts to my beloved American football team, the New York Jets! @nyjets #jets https://t.co/OvXpF79140

The IMF issuing a statement to reassure the public that bond markets are "functioning in an orderly manner" is highly unusual—and risks raising more questions than it answers. #economy #markets #bonds #yields @IMFNews https://t.co/csYUXFpnsq

The link to this afternoon's conversation with @carlquintanilla. https://t.co/U2MZdmpcP7 #economy #markets @cnbc @CNBCClosingBell

From the FT: "US mortgage rates jumped the most in four years as an accelerating sell-off in the government bond market deals a fresh blow to the housing market just weeks ahead of midterm elections. The 30-year fixed-rate mortgage averaged 7.28 per cent as of October 1, an increase of 0.25 percentage points from a week ago, Freddie Mac said on Thursday." #economy #markets #housing #mortgages @ft

Thank you, Carl, for the interesting conversation on Closing Bell. #economy #markets @cnbc @CNBCClosingBell @carlquintanilla https://t.co/A9a5yp9uNg

Following the surge of the last few weeks, the US Dollar Index (DXY) is trading at its strongest level this year. (Bloomberg charts below.) #economy #markets #dollar #currency #fx https://t.co/wtFe7ZxN5g

The latest "GDP Now" estimate for Q-3 US growth from the Atlanta Fed. #economy #growth #markets @AtlantaFed https://t.co/K4LoV0Aceq

Meanwhile in Europe, while attention is understand centered on the 10-year France–Germany spread widening way past 100 bps in the last few weeks, what's happening at the short end is as interesting if not more so: The 2-year spread between the two core eurozone sovereigns (Bloomberg chart) has surged to 62 bps—a stark signal of how rapidly markets have been repricing French sovereign risk. #economy #bonds #germany #france #markets

Three things to note when considering the influences on US government bond yields: 1. While Fedspeak this week has struck a hawkish tone, it was not quite as aggressive as the rate-hike trajectory currently priced in by markets. 2. While I have been pointing for months to the widening imbalance between surging higher supply and waning appetite from some dependable long-term buyers, the recent yield spike appears to have overshot this and other main drivers (a dynamic consistent with the growing footprint of hedge funds in this market segment). 3. On a relative valuation basis, US Treasury yields now look distinctly attractive when compared to…

Today's US data releases, which come ahead of tomorrow's more comprehensive jobs report, point to continued robust economic activity, solid labor market, and greater cost pressures. Specifically: Labor market: With initial jobless claims below 200,000 once again (at 197,000), this partial indicator points to continued strength. ISM Manufacturing: The slight dip in September to 54.5 (below the consensus forecast of 55.0 and down from 54.6 in September) occurred even though new orders beat expectations (55.3 vs. 54.7). Price pressures: Costs are well ahead of expectations (79.9 vs. 73.0 consensus, up from August's 71.1). This is contributing to…

The usual monthly table of returns for major asset classes/assets. #economy #markets #bonds #stocks #bitcoin #gold #oil #investing #investors https://t.co/TsWaCwRNAm

While on dispersion, have a look at this September chart of returns on 10-year government bonds: US Treasuries were down twice as much as German Bunds (-3.7% versus -1.9%), reversing the prior US relative outperformance. #economy #markets #bonds #yields https://t.co/vNhwYIYas5

Responding to a question on US stock market dispersion: This chart gives you a sense. The difference in Q2 returns between the Russell index (white) and both the S&P (red) and NASDAQ (yellow) is 9-10 percentage points. #economy #markets #stocks #investing #investors https://t.co/14FIjrFrxv

Entering the final quarter of the year, investors in US markets face two important questions: • Equities: How far can dispersion go within the S&P, and if there's a limit, how does the eventual convergence play out? • Fixed Income: How high is the bar for yields and spreads to entice buyers in size? #economy #markets #investors #investing #stocks #bonds

From the Wall Street Journal: US stocks versus bonds, year-to-date. #economy #markets #stocks #bonds @WSJ https://t.co/YsmCQm5RTE

Good morning. It’s a new month for markets, but the dominant theme remains the same for now: upward pressure on government bond yields. The UK 30-year gilt has climbed this morning to a level not seen since 1998, while both the US 10- and 30-year yields trade around those of 2002. #economy #markets #yields #bonds

Some interesting charts from Martin Wolf's FT column. #economy #markets #debt @FT https://t.co/S4CTUOWkhr

The US 10-year government bond yield is now trading at 5.30%. #economy #markets #yields #bonds https://t.co/2CMrwcKj7g

Here is "The White House Accord on Super Intelligence" signed yesterday: #economy #tech #ai #markets https://t.co/nP1I4sT0y8