Author: esanchez

Will EUR/USD Volatility Snap Back? By Erik Norland, Senior Economist, CME Group EURUSD Volatility Has Declined Sharply 30-day EUR/USD options implied volatility in 2021 is down sharply to 5%-6%. Implied volatility ranged from 5%-10% past few years, and 10%-15% before 2016. U.S. and eurozone budget deficits, inflation rates have diverged since pandemic. Widely traded EUR/USD … Read More

View in your browser Inflation Dichotomy and Equities vs. Real Estate By Erik Norland, Senior Economist CME Group Surging Inflation Unique to U.S. U.S. core inflation at 4.5%, U.K. at below 2.5%, eurozone 1%. China’s inflation below pre-pandemic level at 1%, Japan at around zero. Massive U.S. fiscal spending led to a surge in consumer … Read More

View in your browser Inflation Lacks Persistent Driver and Bonds Price Unique Fed Move By Blu Putnam, Chief Economist Erik Norland, Senior Economist CME Group Weak Dollar Drove Inflation in the 1970s Inflation has exceeded Fed’s 2% target, yet bond yields barely moved. Ten-year Treasuries are yielding less than 1.3%, below actual inflation rate. Weaker U.S. … Read More

View in your browser Dividend Futures as an Inflation Hedge? By Blu Putnam, Chief Economist, CME Group Dividends Futures and Soaring Inflation Dividend growth expected at 10%-15% through 2020s before inflation. When adjusted for inflation, dividend growth turns negative in 2020s. Equities have outperformed dividends amid declining bond yields. Dividend index futures could be an inflation … Read More

View in your browser Labor Market Anomalies and Soaring Home Prices By Blu Putnam, Chief Economist Erik Norland, Senior Economist CME Group Contradictions in the Labor Market About 30%, or seven million, of jobs lost to pandemic yet to be recovered. Some sectors unable to find workers in an anomaly of the economic recovery. More … Read More