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FMI Weekly Data Preview: February 15-19

FMI’s complete Preview of the notable data releases in this holiday-shortened week

TOE Alert: BOJ Negative Rates Backfire; People Move to Cash Instead of Stocks

Key points in Richard Katz's report include: - Kuroda’s negative rate policy presumes low rates will force firms, banks and households to shift to higher-return risky assets - But Kuroda’s premises about firm and household behavior have been consistently mistaken - They are based on theories about what a perfectly rational person would do rather than looking at what real-world firms and households actually do - Ever since the BOJ pushed interest rates to the floor, beginning in 1995, households have shifted out of higher return time deposits at the banks into cash and ordinary deposits, which pay almost no interest - They have not increased their purchases of insurance annuities - Pension funds have gone up because people have no choice ​- Households have been consistent sellers of stocks in the past decade, selling even more when the market is rising a lot

Yellen Testimony Keeps Rate Hike Options Open

FMI’s Commentary on Yellen’s Congressional testimony.

Data Round-Up: Labor Markets Solid in Face of Financial Market Turmoil

FMI’s review of the latest Weekly UI Claims & Rail Traffic results.

TOE Alert: Real Wages Fall almost 1% in 2015; Fourth Consecutive Fall

Key points of this TOE Alert include: - Real wages per worker fell 0.9% in 2015, marking the fourth decline in a row; - One of the most disappointing omens for the future in the December report was the 0.8% fall in nominal bonuses, a harbinger for a disappointing shunto negotiations on overall wages; ​- Some officials and economists keep blaming the data, rather than look at the reality

TOE Alert: Financial Market Mayhem

Key points for Richard Katz's TOE Alert include: - Stock prices fell 5% on Tuesday and another 2.4% Wednesday morning to the lowest level since Kuroda’s “monetary bazooka” of October 2014; - The yen stands at ¥114.6/$, the strongest level since October 2014; - Yields on JGBs out to ten-year maturity are now in negative territory, for the first time; - Banks, pension funds, insurers all invest heavily in JGBs; - Banks have already made big cuts in the rates they pay depositors, but are not expected to go into negative territory for households or SMEs; ​- All this means a squeeze on earnings at banks, insurers and pension funds

Data Round-Up: NFIB Mired in Doldrums, But Labor Outlook Remains Upbeat

FMI’s analyses of today’s January NFIB Small Business Optimism Index and December JOLTS data.

FMI Weekly Data Preview: February 8-12

FMI’s complete Preview of this week’s notable data releases.

Kuroda Goes Negative on Interest Rates - Monetary ‘Hail Mary’

Richard Katz's February 2016 issue of the Oriental Economist

Data Round-Up: Strong Wage Gains Increase the Odds for a March Rate Hike

FMI’s analysis of this morning’s January Employment (including a review of the Annual Payroll Benchmark) and December International Trade reports.

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