Nothing has changed since the last update. US Bank Deposits and Loans are soaring as capital flees NIRP in Europe.
Real time withholding tax collections accelerated this week. The nominal annual growth rate rose to +4.7%. This has reached the limit of the downtrend in these collections over the past 7 months.
The deck looks stacked against the bears at least through June. Here are the particulars on why, and what to expect.
Liquidity is flooding into the US. US market liquidity has been growing at an increasing rate this year after being nearly stalled in 2015. This increase has buoyed US stock prices. The Composite Liquidity Indicator is up 4.3% over the past 12 months. The SPX is now down just 0.7% from one year before after…
Real time withholding tax collection data showed slight year to year growth last week, but certain excise taxes suggest that the US economy continues the contraction that began a few months ago.
The 10 year Treasury yield has formed a double bottom in an attempt to end the downtrend, while the US dollar continues to weaken toward a test of major support.
The massive flow of tax collections causes the Treasury to pay down debt from now to mid May, putting cash back into the accounts of dealers and investors. At the same time, the Fed will be settling MBS purchases in mid month as usual. That can be an incendiary combo.
The Precious Metals Update will not be published this morning. It will return on Friday. With gold’s price tightly rangebound, there’s little to report. We’re spending our last 2 days in Europe and will be flying home to N. America on Saturday. While there will be a few gaps in publication of various reports this…
Total demand for long term Treasuries at the March auctions dropped, continuing the downtrend of the past 6 ½ years. But supply, which has also been falling over that period, has stabilized and could turn higher.
Real time withholding tax collection data rebounded in recent weeks and no longer show the US economy contracting. However, the trend of the growth rate remains down. The data has made lower highs and lower lows since last August. The full month’s data for March in both withholding and other Federal taxes is now in…