Research Team at BBH, suggests that last week's US retail sales and yesterday's industrial output figures are disappointed and what looked to be such a promising quarter in terms of growth appears to have fizzled.
Key Quotes
“Economists are no longer confident that the three-quarter streak of sub-2% GDP prints will be snapped.
It is tempting to attribute this disappointment to the dollar's pullback, but such logic needs a middle term, and that is changed expectations of Fed policy. That is the missing link, so far. Net-net, and with little volatility, the December Fed funds futures contract is unchanged since October 4, and implies a slightly higher chance of a hike than at the end of September. Still, US yields have softened somewhat. The two-year note yield is seven basis points off last week's high. The 10-year yield is five basis points below yesterday's four-month high.”
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