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Technically Speaking: Treasury Market Rallies

Technically Speaking For May 13-17


  • International data is positive, but there was softness this week in China and the EU.
  • US data was mixed.
  • This rally is still suspect.

International Economic Data of Note

  • China/Japan/Australia
    • Japan
      • LEI: 96.3; CEI 99.6: these have trended lower over the last 12 months
      • Exports -.8% M/M
    • China
      • Service sector growth 7.4%
      • Industrial Production +5.4%
      • Retail sales +7.2%
      • Fixed Asset Investment +6.1%
    • Australia
      • Unemployment at 5.1%

Asia/Australia conclusion: this week’s news was disappointing. Chinese retail sales hit a multi-year low while industrial production fell back after a strong advance the previous month. This could simply be a natural fall-back after a strong month. Japanese news is fair, but there’s an underlying softness that is concerning. Australia remains in decent shape.

  • EU/UK/Canada
    • EU
      • Industrial production -.3% M/M
      • GDP +.4%
      • Employment + .3%
      • Zew Economic Sentiment -1.6%
      • EU Exports up 3.1% Y/Y
      • Construction production down .3% M/M
      • Inflation up 1.7%
    • UK
      • Unemployment at 3.8%
      • Wage growth at 3.3%
    • Canada
      • CPI at 2%

EU/UK/Canada conclusion: EU news is still soft. While GDP is growing, it’s doing so at a snail’s pace. Economic sentiment is weak and construction was off. Growth is just this side of positive, which means a negative shock (like higher U.S. tariffs on EU auto exports) could send the region into a mild recession.

  • Emerging
    • Indian inflation at 3.07
    • Turkish retail sales -3.8%
    • Turkish unemployment 14.7%

US Data Of Note

The Census reported that retail sales were off modestly (emphasis added):

Advance estimates of U.S. retail and food services sales for April 2019, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $513.4 billion, a decrease of 0.2 percent (±0.5 percent)* from the previous month, but 3.1 percent (±0.7 percent) above April 2018. Total sales for the February 2019 through April 2019 period were up 3.0 percent (±0.7 percent) from the same period a year ago. The February 2019 to March 2019 percent change was revised from up 1.6 percent (±0.5 percent) to up 1.7 percent (±0.2 percent).

The data charts are still pretty good:

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