Calm But We Can Hear The Storm Now
Ian Reynolds
Bank FX currency & prop trader. Limit Up ! traders newsletter. Co-Founder Feasly, property development feasibility in The Cloud
Bank Lending Contracting in US
US bank lending has dropped recently, as figures from the Reserve Bank of Dallas show below. The contraction of credit is always a good indication of a recession coming, as small businesses are unable to get loans to fund expansion, operations etc
Money Supply Contracting
The chart above from Federal Reserve Bank of St Louis shows clearly how the money created in the pandemic is being slowly removed from the system.
M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less IRA and Keogh balances at depository institutions; and (2) balances in retail MMFs less IRA and Keogh balances at MMFs. Seasonally adjusted M2 is constructed by summing savings deposits (before May 2020), small-denomination time deposits, and retail MMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.
M1consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (3) other liquid deposits, consisting of OCDs and savings deposits (including money market deposit accounts). Seasonally adjusted M1 is constructed by summing currency, demand deposits, and OCDs (before May 2020) or other liquid deposits (beginning May 2020), each seasonally adjusted separately.
Commercial Real Estate Debt Problems
ALMOST US$1.5 trillion of US commercial real estate debt comes due for repayment before the end of 2025. The big question facing those borrowers is who’s going to lend to them?
“Refinancing risks are front and centre” for owners of properties from office buildings to stores and warehouses, Morgan Stanley (MS) analysts including James Egan wrote in a note in the past week. “The maturity wall here is front-loaded. So are the associated risks.”
The investment bank estimates office and retail property valuations could fall as much as 40 per cent from peak to trough, increasing the risk of defaults.
Ukraine stripping US of ammunition
WASHINGTON — The Pentagon is tapping into a vast but little-known stockpile of American ammunition in Israel to help meet Ukraine’s dire need for artillery shells in the war with Russia, American and Israeli officials say.
In Case You Missed It
RBA pauses
In his address to The National Press Club on 5 April 2023, Governor Philip Lowe explains the Reserve Bank Board's monetary policy decision at the 4 April 2023 meeting and discusses some of the factors that are likely to bear on the economic outlook. He also talks about the importance of returning to low inflation.
Australia
Trouble brewing as cracks appearing everywhere
AUD / USD Trade Update
Short 0.7000
Short 0.7100
Stop 0.6940
AUD broke the short-term consolidation uptrend and with the constricting Bollinger Bands on the daily, we're looking for a sharp move down. Below the low of 10 March at 0.6565 sends us back into the 23.6% fib retracement of the 0.8000 to 0.6170 move.
This Week's Economic Indicators [London time]
Key Economic Releases:?https://suberia.capital/economic-indicators-by-country
Book a chat about Trading | Macro?https://suberia.capital/suberia-capital-foreign-exchange-mcro-capital-markets
SUBERIA CAPITAL LIMITED, 09315704 - Incorporated on 18 November 2014. Nightingale House, 46-48 East Street, Epsom, Surrey, KT17 1HQ, United Kingdom