The United States: This scatterplot shows US average hourly wages vs. the unemployment gap.
As wage growth improves, so should the core PCE inflation (the Fed’s preferred measure).
Here is Morgan Stanley’s core PCE forecast for next year.
Rates: Most of the increase in Treasury yields over the past 30 days has been due to rising term premium as opposed to risk neutral rates.
China: The rate differential between China and the US has been closing, which has been putting downward pressure on the yuan.
The Eurozone: Will faster wage growth boost inflation across the Eurozone?
Equities: Valuations have improved meaningfully this week. Here is the forward-looking P/E ratio (green).
Global Developments: Below is Oxford Economics’ estimates for the output gap in advanced economies.
Emerging Markets: This chart shows the minimum wage by country.
Food for Thought: Who supplies parts for Boeing 787 Dreamliner?
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