Weekly Price Changes June 9-16, 2017
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Interest Rate Tempest – Earnings: CRR, MRT, REF, WIR
The outlook for interest rates to move higher is not justified by recent economic data. In the U.S., consumer prices were unchanged in June and retail sales fell for a second straight month, last week. The larger issue at the US Fed and other major central banks may well be the time frame for unwinding their multi-year bond buying spree. This strategy was initiated to recover from the Global Financial Crisis, and when combined with plans to raise interest rates in the US would likely be too much for markets to handle. The probability for both to happen similtaneously, is suspect by the steady weakening of the US dollar that began in early Dec-2016.
This week's comments review the changes in the US dollar compared to our basket of global currencies, changes in 10 year bond yields and once again preferred share prices. The price changes for each of the three categories of preferred shares provide a window into how interest sensitive investments at present view the future for central bank interest rate policy.
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