Recap :


This chart from G/S (h/t @barnejek) speaks for itself – and another reason to be worried about EM assets:

Also, apparently, the average student loan data we’ve been getting stressed out about is, unsurprisingly, getting skewed by outliers. I certainly don’t think that puts the issue to bed, but perhaps the problem is smaller than generally thought. Per the NYT,

the share of income that young adults are devoting to loan repayment has remained fairly steady over the last two decades, according to data the Brookings Institutions is releasing on Tuesday. Only 7 percent of young-adult households with education debt have $50,000 or more of it. By contrast, 58 percent of such households have less than $10,000 in debt, and an additional 18 percent have between $10,000 and $20,000.

Finally, this is brilliant, and another reason it takes effort to understand the truth. People who know do not have enough energy to disprove incorrect statements by people who don’t.


  • German IFO declined to 109.7 vs 110.3 exp and 110.4 prev
  • US FHFA House Prices were flat Mo in April vs +0.5% exp and 0.7% prev. The Case Shiller 20 City measure rose 0.19% vs 0.8% exp and 1.24% prev
  • Consumer Confidence improved to 85.2 vs 83.5 exp and 83.0 prev
  • New Home Sales jumped 18.6% MoM vs 1.4% exp and 6.4% prev. The increase broad, but driven by the South and the West.
  • Turkey cut rates to 8.75% vs 9.0% exp and 9.5% prev
  • Carney said that “there’s additional spare capacity concentrated in the labor market that can be absorbed further.” The apparent about face drove a rally in short sterling.
  • Abe’s 3rd arrow was formally unveiled Tues morning but the plan is short on detail and may underwhelm. Keep in mind that many of these 3rd arrow proposals have been leaked to the press over the course of the last several weeks. Specifics on the corporate tax cut and GPIF allocation adjustments were sparse. Per Reuters, “key details of many steps have been left to be worked out later and several bold but politically contentious proposals were watered down or omitted”. "Even after the government growth strategy is announced, various pieces of legislation must be enacted and it will take time for companies to begin to act. Therefore, it will be 10 to 20 years before the potential growth rate rises”.

Upcoming Data:

  • Wed: German GfK Consumer Confidence, Italy Consumer Confidence, US DGO, Core PCE,
  • Thu: France Consumer Confidence, US Jobless Claims, Personal Income
  • Fri: Germany CPI, UMichigan Confidence
  • Weekend: New ZealandBuilding Permits, Business Confidence, Japan Housing Starts,
  • Mon: Month End, EU Money Supply, CPI, UK Mortgage Approvals, Canada GDP, ChicagoPMI, US Pending Home Sales, AustraliaMfg PMI, China Mfg PMI
  • Tue: RBA, EU PMI, Employment, US ISM, Australia Trade Balance