Mohamed El-Erian

“Another good US economic number: September industrial production expanded by 0.7%, beating the 0.4% consensus forecast. This comes on the heels of yesterday’s strong retail sales and labor market data. Meanwhile, today’s higher-than-expected rise in September import prices (+1.1%) reinforces the message from this week’s hot CPI and PPI readings. #economy #markets #growth #inflation”

“Of note this early morning: the yield on 10-year US government bonds has fallen sharply, trading just below 5.10%. #economy #markets #bonds #yields”

“From the WSJ article, 'China’s Weakening Economy Is Creating a Lost Generation.' #economy #markets @WSJ #china”

“With diesel back under the spotlight, please find below Google's summary of price movements over the last year. Underlying this is what has become an increasingly influential, multi-directional causal relationship between geopolitics, domestic politics, and economics. For example, as geopolitical tensions drove diesel prices higher, the negative economic impact began affecting domestic politics. That, in turn, inc…”

“Good morning. As reported below by the WSJ, the US budget deficit climbed to nearly $2 trillion ($1.993 trillion) for the fiscal year ending September 30. What remains historically notable is that the US has continued to run a deficit of around 6% of GDP despite solid economic growth and a robust labor market. #economy #markets @WSJ”

“Good morning. From the FT: 'A sharp sell-off in US government bonds is starting to reverberate across corporate America, forcing companies to overhaul their borrowing plans and even raising the spectre of defaults among the most lowly rated businesses.' Remember the historical playbook: The most vulnerable sectors get hit first and hardest. Then, if elevated borrowing costs persist, the pressure both migrates up t…”

“On two stubborn market indicators with broad influence: 1. Brent above $100, even with Strait of Hormuz flows nearly back to pre-war levels. The important comments by Aramco’s CEO provide part of the explanation: massive drawdowns have left both corporate and sovereign inventories 'scarily thin,' and restocking will take significant time. 2. 10-year US Treasury yield at 5.30% despite last week's cooling data and d…”

“The US jobs data is out and there are surprises: Job creation was only 29,000 in September, with the unemployment rate rising to 4.2% and monthly earnings growth moderating to only 0.1%. Add to that downward revisions to both July and August (about 60,000 jobs). On the supply side, a more encouraging development with labor force participation increasing to 61.8%. This will reinforce the impact of recent Fedspeak i…”

“Good morning. It’s a new month for markets, but the dominant theme remains the same for now: upward pressure on government bond yields. The UK 30-year gilt has climbed this morning to a level not seen since 1998, while both the US 10- and 30-year yields trade around those of 2002. #economy #markets #yields #bonds”

“Good morning. In markets, US bond yields are back in focus, with the 10-year hitting 5.22%, its highest level since 2002 -- as Brent oil approaches $110. (CNBC chart below.) #economy #markets #oil #energy #bonds #yields”

“ROW: Long US equities, less so Treasuries: As reported by the FT, 'foreign investors made a record $942bn in net purchases of US equities and investment fund shares in the 12 months to July, accelerating a shift in overseas investment towards American stocks and away from debt. The flows represented the highest rolling 12-month total in Treasury data going back to 1985.' #economy #markets #stocks #bonds @ft”