Monetary Insanity: When It Doesn’t Work – – Just Promise To Keep Doing It Until It Does

On July 14, 2006, the Bank of Japan raised its benchmark overnight rate off zero for the first time since introducing the world to ZIRP in 1999. In doing so, the BoJ noted that the Japanese economy in its view continued to ‘expand moderately’ and that risks inside the economy were ‘balanced.’ The central bank also sought to reassure, further commenting that despite one 25 bps rate hike ‘an accommodative monetary environment ensuing from very low interest rates will probably be maintained for some time.’
These words, all of them, should sound frighteningly familiar, as they are being redeployed in nearly exactly the same phrasing by the Federal Reserve. Whether or not the FOMC votes for a second rate hike today still remains to be seen, as before that ‘news’ there is first the BoJ once more admitting that its prior efforts didn’t actually work. For the record, Japanese officials actually carried out two hikes, a second coming in February 2007 just in time for the open minded to finally see what really had been going on in the global economy.
In other words, the Japanese policymakers made the same mistakes as are being made today. They assumed absence of further contraction was the same as recovery. In the singularly binary model of orthodox economics, if an economy isn’t in recession it must be growing; so if the economy isn’t in further recession and the economy is barely growing or even stagnating then it is assumed that growth is just being delayed. By the middle of 2006, the Bank of Japan believed there were enough signs the economic postponement had ended.

This post was published at David Stockmans Contra Corner on September 21, 2016.

Will the Bank of Japan cause a Global Bond Tantrum?

As investors anxiously await the key monetary policy decisions from the Federal Reserve and the Bank of Japan next week, there have been signs that the powerful rally in bond markets, unleashed last year by the threat of global deflation, may be starting to reverse. There has been talk of a major bond tantrum, similar to the one that followed Ben Bernanke’s tapering of bond purchases in 2013.
This time, however, the Fed seems unlikely to be at the centre of the tantrum. Even if the FOMC surprises the market by raising US interest rates by 25 basis points next week, this will probably be tempered by another reduction in its expected path for rates in the medium term.
Instead, the Bank of Japan has become the centre of global market attention. The results of its comprehensive review of monetary policy, to be announced next week, are shrouded in uncertainty. So far this year, both the content and the communication of the monetary announcements by BoJ governor Haruhiko Kuroda have been less than impressive, and the market’s response has been repeatedly in the opposite direction to that intended by the central bank.
As a result, the inflation credibility of the BoJ has sunk to a new low, and the policy board badly needs to restore confidence in the 2 per cent inflation target. But the board is reported to be split, and the direction of policy is unclear. With the JGB market now having a major impact on yields in the US, that could be the recipe for an accident in the global bond market.

This post was published at David Stockmans Contra Corner By Gavyn Davies, Financial Times ‘ September 19, 2016.

Japanese Government Bonds Having Worst Quarter In Two Decades

Japanese government bonds hit a six-month low today, and the 10-year came within a whisker of breaking into that long forgotten realm of positive yields.
It’s been a ferocious sell-off- the worst in two decades to be precise.
Since the 10-year JGB yield hit a record low -0.291 per cent at the end of July, yields have rocketed amid widespread headscratching over what the future holds for Japanese monetary policy, writes Joel Lewin.
In July, the Bank of Japan underwhelmed markets with a stimulus boost that fell short of expectations, while the government unveiled a 4.6tn ($45bn) fiscal stimulus package, sparking concerns the BoJ has run out of ammunition and adding fuel to the sell-off.

This post was published at David Stockmans Contra Corner on September 14, 2016.

Here Comes Operation Reverse Twist – – -BOJ Style

Japan’s subzero-rates policy has had a ‘powerful impact,’ as Bank of Japan Gov. Haruhiko Kuroda recently said, in pushing down interest rates. But judging by the collateral damage – record low profits at Japanese banks, which are charged with transmitting the BOJ’s easy-money policy to stimulate the economy – it has likely gone a touch too far.
Signs have emerged that the central bank intends to steepen its yield curve – that is, push long-term rates up and suppress short-term rates. It has shifted around its bond purchases, buying more short-term Japanese government bonds and on the whole buying fewer bonds. Long-term rates rose are up almost half a percentage point since July. Yet even after the recent steepening, the difference between two-year bonds and 10-year bonds is half what it was before negative rates came into effect.
To alleviate further pain, the BOJ at its policy meeting Sept. 21 could nudge the yield curve steeper by committing to lowering the short-term rates that banks typically borrow at, while letting long-term rates that they lend at float higher.

This post was published at David Stockmans Contra Corner on September 14, 2016.

BOJ Bond Buying And Japan’s ‘Crooked’ Yield Curve

In Japan, the yield hunters have become the hunted.
Investors who refused to swallow negative yields to hold Japan’s shorter-dated bonds are suffering, as an index of sovereign debt maturing in 20 years or more has lost 9 percent this quarter. The yield on 2036 bonds climbed to the highest since March 16 as BOJ Governor Haruhiko Kuroda noted last week that low long-term yields hurt returns on pension and insurance investments, even as he signaled there would be no reduction in easing with a policy review due Sept. 21. A 20-year debt sale Tuesday drew the lowest demand in six months.
‘JGBs are responding unreservedly to the BOJ’s message that it’s not desirable for superlong yields to be too low,’ said Takafumi Yamawaki, the chief rates strategist in Tokyo at JPMorgan Chase & Co. ‘The problem is we don’t know what the BOJ’s desired level is, and that’s created an atmosphere of paranoia in the market.’
The intensity of Japan’s bond selloff has sparked concern the market will become the epicenter for a global rout, just as it led a record rally in the first half of 2016. Federal Reserve officials are cautioning against waiting too long to tighten policy, while the European Central Bank is playing down the prospect of further stimulus. DoubleLine Capital Chief Investment Officer Jeffrey Gundlach is among those recommending investors prepare for bonds to fall.

This post was published at David Stockmans Contra Corner By Kevin Buckland and Shigeki Nozawa, Bloomberg Business ‘ September 13, 2016.

RIP: Oil ‘Supply Glut’

The most remarkable aspect of the WTI crude oil futures curve this month has been its amazing ability to maintain its shape no matter which direction or by how much. Previously, as ‘dollar’ pressures either built or ebbed, the futures curve would either steepen at the front (liquidation pressure) or flatten toward more normal backwardation (easing of the ‘dollar’ difficulties). That was the case since June 8 when the WTI curve was at its flattest in well over a year; but as funding pressures built primarily, I believe, via Japan (increasingly negative and record negative cross currency basis swaps) the curve morphed from nearly flat to once more highly angular contango in the tell-tale sign of the ‘dollar.’
In short, the Japanese end of the Asian ‘dollar’ had become distressingly disruptive through June and July, but much less so once BoJ singled out the ‘dollar’ in its actual policy changes. Thus, from around June 8 until about August 2, the Japanese-connected ‘dollar’ pressure was increasingly acute and globally disruptive (stock markets obviously notwithstanding because of their own liquidity supply and buying interests, largely myths about what central banks can’t do). Since August 2, much less so; leaving oil once again as a function of ‘dollars’ this time in relatively better shape. [emphasis in original]

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ September 1, 2016.

Clues to the Origins And Stubbornness of the ‘Rising Dollar’

On March 9, 2016, front month trading for Japanese government bond (JGB) futures was halted at 12:32 pm Tokyo time. Selling had become intense, tripping the Osaka Exchange’s dynamic circuit breaker. The total length of the halt was just 30 seconds, but fingers were already being pointed in the direction of the BoJ.
More than four months later, on July 28, trading was halted in all products for JGB’s for an estimated 20 minutes starting 9:51 am Tokyo time. While the exchange provided very little information, they eventually blamed a delay in system processing. Whether or not that was the proximate cause doesn’t really matter, as the context for the trading darkness was just hours ahead of BoJ’s latest monetary policy decision.
A few days after that, on August 2, JGB 10s experienced their worst single day selloff in 13 years. That ended a 3-day selling binge that cut 2.47 points off the price of the 10-year benchmark, the largest three-day losing streak since May 2013 shortly after QQE had begun.
You might get the sense from these events that trading liquidity in JGB’s, cash or futures, isn’t exactly the most robust these days. Violent swings in bond markets are never a good thing in either direction (just ask the US Treasury). It’s not just government bonds, however, that have obtained a direct and palpable disdain from institutions that used to be a major part of the financial plumbing in Japan.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ August 23, 2016.

Monetary policy has Nationalized the Japan Stock Market

Even a resurgent yen hasn’t dampened Japan’s stock rally over the past couple months, but that’s not necessarily because investors like the market.
The Nikkei 225 index has surged around 10 percent since late June, even as the yen has climbed against the dollar, with the pair testing levels under 100. Normally this would be bad news for stocks as a stronger yen is a negative for exporters as it reduces their overseas profits when converted to local currency. So what explains the buoyant stock market?
Analysts attributed the gains to the Bank of Japan (BOJ), not fundamentals.
In a report titled, ‘BOJ nationalizing the stock market,’ Nicholas Smith, an analyst at CLSA, said that the central bank’s exchange-traded fund (ETF) buying program was distorting the market.
At its late July meeting, the BOJ said it would increase its ETF purchases so that their amount outstanding will rise at an annual pace of 6 trillion yen ($56.7 billion), from 3.3 trillion yen previously.
Those purchases were particularly distorting to the market because they focused largely on funds tracking the Nikkei 225 index, Smith said in a note dated Sunday, estimating that more than half of the BOJ’s ETF buying was likely in Nikkei-tied funds.

This post was published at David Stockmans Contra Corner By Leslie Shaffer, CNBC ‘ August 23, 2016.

Bubbles In Bond Land – – A Central Bank Made Mania, Part 1

….. Sometimes an apt juxtaposition is worth a thousand words, and here’s one that surely fits the bill.
Last year Japan lost another 272,000 of its population as it marched resolutely toward its destiny as the world’s first bankrupt old age colony. At the same time, the return on Japan’s 40-year bond during the first six months of 2016 has been an astonishing 48%.
That’s right!
We aren’t talking Tesla, the biotech index or Facebook. To the contrary, like the rest of the Japanese yield curve, this bond has no yield and no prospect of repayment.
But that doesn’t matter because it’s not really a sovereign bond anymore. These Japanese government’s bonds (JGBs) have actually morphed into risk free gambling chips.
Front-running speculators are scooping up whatever odds and sots of JGB’s that remain on the market and are selling them to the Bank of Japan (BOJ) at higher and higher and higher prices.

This post was published at David Stockmans Contra Corner on August 22, 2016.

BOJ Cornered as Japanese Banks Running Out of Bonds to Sell

Japan’s biggest banks are running out of room to sell their government bond holdings, pushing the central bank closer to the limits of its record monetary easing.
Japan Post Bank Co. and the nation’s three so-called megabanks have almost halved their sovereign bond holdings to 114 trillion yen ($1.1 trillion) since March 2013, the month before the Bank of Japan began buying the securities on an unprecedented scale to end deflation. Government notes held by Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. are approaching the level where further reductions would involve securities they need as collateral.
‘Banks are the first port of call’ as the BOJ seeks to boost its JGB holdings by 80 trillion yen annually, said Shuichi Ohsaki, the chief rates strategist at Bank of America Merrill Lynch in Tokyo. ‘But they’re losing capacity to cut beyond those that are reaching maturity.’
Finding willing sellers is a headache for Governor Haruhiko Kuroda as the central bank prepares to review policy at next month’s board meeting, amid growing concern among economists that he has few tools left to revive the economy. Record bond buying has already saddled the BOJ with more than a third of outstanding sovereign notes, draining liquidity from the market and making it more volatile.

This post was published at David Stockmans Contra Corner By Gareth Allan and Shigeki Nozawa via Bloomberg Business ‘ August 18, 2016.

BOJ Firepower Fizzles as Currency Market Dares Japan to Act

Foreign-exchange traders are becoming increasingly confident that the Bank of Japan won’t stand in the way of further yen strength after the currency surpassed 100 per dollar for the second time this year.
Strategists at Bank of Tokyo-Mitsubishi UFJ Ltd. and Morgan Stanley see the yen extending this year’s almost 20 percent gain versus the dollar, further confounding policy makers who are seeking to spur growth and inflation in the world’s third-largest economy. As the currency surged Tuesday, Japanese Vice Finance Minister Masatsugu Asakawa said he’s watching with concern to see if there are speculative moves in the foreign-exchange market.
Forecasters who started 2016 predicting yen weakness have had to revisit calls predicated on Japan’s ability to use rhetoric, monetary stimulus and quantitative easing to stymie the currency’s advance. Efforts that would typically weaken the yen have proven largely ineffective this year, signaling that the BOJ may have run out of room to maneuver. At this point, the yen’s strength appears to fall short of levels where the BOJ would consider entering the market to sell yen – a step that hasn’t happened since 2011 – according to Mizuho Bank Ltd.
More Jawboning
‘The verbal warnings will get stronger until something nearer 90, which might induce some form of physical intervention,’ said Neil Jones, head of hedge-fund sales at Mizuho in London. ‘It is very unlikely that they will unilaterally intervene at current levels.’

This post was published at David Stockmans Contra Corner on August 17, 2016.

The Bank of Japan’s Unstoppable Rise to Shareholder No. 1

The Bank of Japan’s controversial march to the top of shareholder rankings in the world’s third-largest equity market is picking up pace.
Already a top-five owner of 81 companies in Japan’s Nikkei 225 Stock Average, the BOJ is on course to become the No. 1 shareholder in 55 of those firms by the end of next year, according to estimates compiled by Bloomberg from the central bank’s exchange-traded fund holdings. BOJ Governor Haruhiko Kuroda almost doubled his annual ETF buying target last month, adding to an unprecedented campaign to revitalize Japan’s stagnant economy.
While bulls have cheered the tailwind from BOJ purchases, opponents say the central bank is artificially inflating equity valuations and undercutting efforts to make public companies more efficient. Traders worry that the monetary authority’s outsized presence will make some shares harder to buy and sell, a phenomenon that led to convulsions in Japan’s government bond market this year.
‘Only in Japan does the central bank show its face in the stock market this much,’ said Masahiro Ichikawa, a Tokyo-based senior strategist at Sumitomo Mitsui Asset Management Co., which oversees about 12 trillion yen ($118 billion). ‘Investors are asking whether this is really right.’
While the BOJ doesn’t acquire individual shares directly, it’s the ultimate buyer of stakes purchased through ETFs. Estimates of the central bank’s underlying holdings can be gleaned from the BOJ’s public records, regulatory filings by companies and ETF managers, and statistics from the Investment Trusts Association of Japan. Forecasts of the BOJ’s future shareholder rankings assume that other major investors keep their positions stable and that policy makers maintain the historical composition of their purchases.

This post was published at David Stockmans Contra Corner

Not “The Onion”: Argentina’s Fernandez Says She Deserves A Nobel Prize In Economics

Cristina Fernandez de Kirchner, former First Lady and President of Argentina (2003-2015), confessed in an interview that ‘instead of having the courts chase us, they should be giving us a Nobel prize for economics… We inherited a country in default and we left it without any debt. ‘ Brilliant.
Amongst her accomplishments, Cristina boasts one sovereign debt default after failing to negotiate with creditors (2014), cooking the national economic figures for 8 years, an IMF censure for faking such data, devaluing her currency from 4:1 to 15:1 USD, and leaving her successful with 50% inflation. Perhaps the BoJ could use her advice?
She and her cabinet have also been the subject of multiple corruption scandals following her departure of office. She has naturally expressed shock, condemned any corrupt officials and denied any knowledge of such actions.
For those who like to focus on her track record, Bloomberg has compiled a helpful GDP growth that compares GDP in Cristina’s mind versus GDP growth in the real world.

This post was published at Zero Hedge on Aug 3, 2016.

It Was All A Dream – – Japan’s Monetary Fiasco Removes All Doubt

Last Friday the Statistics Bureau of the Japanese Ministry of Internal Affairs and Communication reported some more bad news for Prime Minister Abe and really Bank of Japan chief Kuroda. Month-over-month, the consumer price index was down again, leaving it 0.48% less in June 2016 than June 2015. This was the third consecutive month of increasingly negative year-over-year CPI estimates.
When QQE was first implement back in April 2013, its staff economists guessed that it would take two years to get Japan back to 2% inflation; the standard target for almost all the central banks in the ‘developed’ world. The point of QQE as apart from all prior QE’s, and there had been nine or ten before it depending on your definitions, was that it would be so big, powerful, and sustained that the ‘deflationary mindset’ that had, according to orthodox economists, gripped Japan for decades would be forced to surrender to this new monetary regime. Two years was their conservative forecast.
The Bank of Japan did achieve the first part; the central bank has, as of the latest balance sheet figures for June 2016, quadrupled the level of bank reserves in Japan. The end of month balance in March 2013 was 52.6 trillion, a number that at the outset of prior QE’s was already supposed to be impressive, further meaning that it wasn’t as if BoJ was starting from nothing. More than three years and an acceleration of QQE later, there are now 272.6 trillion of bank reserves in Japan, an increase of 418.2%.

This post was published at David Stockmans Contra Corner by Jeffrey P. Snider ‘ August 3, 2016.

Investors to Central Banks: We aren’t Listening Anymore

Japan’s failure to stimulate much with its latest stimulus serves as a reminder of how few tools global policymakers have left to drive growth.
Fiscal and monetary authorities announced more plans over the past few days to spur inflation in hopes of driving broader economic hopes. The government on Tuesday announced fiscal stimulus amounting to $274 billion, while the Bank of Japan late last week said it would nearly double its exchanged-traded fund purchases to nearly $60 billion. They were rewarded with a stronger currency, a sea of red in both global equity prices and bond yields, and a market that generally was disappointed that Japanese leaders were not willing to do more to jump-start the long-moribund economy.
Japan has tried this literally dozens of times over the past quarter century, most often with the same results – perhaps a momentary bounce in activity that ultimately leads back to the same dreary growth pace. Despite all the stimulus, the economy has grown by barely 1 percent a year.
‘In short, the dual monetary and fiscal stimulus plans out of Japan over the past few days have chalked up to a disappointment,’ said Christopher Vecchio, currency analyst at DailyFX, a currency trading firm. ‘The fault lies with fiscal policymakers, not with the BOJ, though. Whatever the BOJ did/does will have little impact unless the measures are amplified by a concurrent fiscal policy response; we now know the hefty fiscal policy response isn’t coming.’

This post was published at David Stockmans Contra Corner on August 3, 2016.

Pay Attention To What BoJ Did Do

As if a mirror of the Federal Reserve, what is more important from the Bank of Japan flop today is what it did do rather than what it did not. Everyone was looking for at the very least an even quicker pace to QQE if not the full-blown ‘helicopter’ of momentum dreams. Instead, BoJ offered what appears tepidity. As widely expected, their ETF buying program was expanded to 2.7 trillion annually, but that wasn’t the end of the submission. The only other change was to double a ‘dollar lending’ program that few knew existed.
In April 2012, the Bank of Japan policy statement included the official approval of a plan to extend dollar loans from its supply of dollar ‘reserves’ to eligible Japanese companies obtaining overseas finance.
The goal of overcoming deflation will be achieved both through efforts to strengthen the economy’s growth potential and support from the financial side. With this in mind, the Bank will pursue powerful monetary easing, and will support private financial institutions in their efforts to strengthen the foundations for Japan’s economic growth via the fund-provisioning measure to support strengthening the foundations for economic growth. At today’s meeting, as shown in the Attachment, the Bank established detailed rules for a new U. S. dollar lending arrangement equivalent to 1 trillion yen, of which a preliminary outline was released at the previous meeting in March.
‘Eligible’ counterparties are narrowed specifically in the technical terms to only those firms who have accounts at FRBNY or have accounts at banks with settlement recourse to FRBNY (where BoJ’s assets are mostly in custody). All loans are in US dollars posted by eligible collateral with 1-year duration (and 3 available one-year rollovers, for a total of four years) at 6-month LIBOR refreshed every six months. The maximum loan per counterparty is $1 billion, with a total balance capped at $12 billion (those amounts were today doubled).

This post was published at David Stockmans Contra Corner on July 29, 2016.

USDJPY Surges On Headline Government Pressuring BOJ To Boost Stimulus; Bloomberg Denies

Update: Looks like we may have a lost in translation moment here, because shortly after the Reuters report (which recall is first and foremost an FX dealer and so loves USDJPY volatility), bloomberg reports that the “MOF draft statement cited by Reuters simply affirms that govt still plans a package.” Hardly the dramatic “pressuring” of the BOJ Reuters would have its FX trading clients believe.
As Bloomberg paraphrases the Reuters piece, the BOJ is considering specific steps for expanding monetary stimulus Friday to address signs of weakness in inflation, Reuters reports, citing people familiar.
BOJ would aim to maximize boost of its measures by timing its action with the govt’s big spending package: sources Ministry of Finance lobbying hard for BOJ to ease further and has prepared a statement it’ll publish if BOJ eases ‘We welcome the BOJ’s decision and will deploy all necessary policy steps including a scheduled big stimulus package,’ says a draft statement seen by Reuters Bloomberg adds the following:

This post was published at Zero Hedge on Jul 28, 2016.

Japan’s Lemming Syndrone

The financial world is buzzing about former Fed chairman Ben Bernanke’s recent trip to Japan, where he advised Japan’s central bank chief Haruhiko Kuroda on how to manage his nation out of multi-decades of stagnant growth. Channeling economist Milton Friedman, Bernanke warned that Japan was vulnerable to perpetual deflation and stagnate growth and that helicopter money – where the government issues non-marketable bonds with no maturity date and the Central Bank buys them with counterfeited credit – was the most useful tool in overcoming this condition.
Bernanke encouraged Japan to carry on with the Abenomics policies that have failed to date by supplementing monetary policy with even more fiscal stimulus – as if Japan’s 230% debt to GDP ratio wasn’t enough. And he assured Abe and his staff that the Bank of Japan (BOJ) has instruments to ease monetary policy yet further.
And in case this village needed another idiot, Nobel laureate Paul Krugman, also chimed in. Arguing that Japan should raise its inflation target to 4 percent and embark on a significant but temporary fiscal stimulus to boost prices in the economy. Speaking at a conference on Thursday in Singapore, Krugman called for ‘a big burst of government spending and maybe also cash donations.’
But the truth is that despite pumping trillions of yen into the financial system, Japanese money printing has had little or no effect in restoring growth. In fact, Japan has already undertaken the largest quantitative easing program – much larger in relative terms than the U. S. Federal Reserve and the European Central Bank.

This post was published at David Stockmans Contra Corner on July 25, 2016.

Bubbles In Bond Land – – It’s A Mania!

Sometimes an apt juxtaposition is worth a thousand words, and one from this morning’s news is surely that.
Last year Japan lost another 272,000 of its population as it marches resolutely toward its destiny as the world’s first bankrupt old age colony. At the same time, the return on Japan’s 40-year bond during the last six months has been an astonishing 48%.
That’s right!
We aren’t talking Tesla, the biotech index or the FANGs. To the contrary, like the rest of the JGB yield curve, this bond has no yield and no prospect of repayment.
But that doesn’t matter because its not really a sovereign bond, anyway. It has actually morphed into a risk free gambling chip.
Leveraged front-runners are scooping up whatever odds and sots of JGB’s that remain on the market and are selling them to the BOJ at higher, and higher and higher prices.

This post was published at David Stockmans Contra Corner on July 14, 2016.

Abenomics Rebuked – – Massive Money Printing, No Economic Gains

With a little more than a week until Japan goes to the polls for an upper-house election, a batch of economic data released Friday underscores the challenge Prime Minister Shinzo Abe faces in convincing voters that his policies are working.
Consumer prices excluding fresh food fell for a third straight month and household spending declined, undermining efforts to revitalize the world’s third-largest economy. While corporate confidence and unemployment were unchanged, there is still little pressure for higher wages.
Friday’s data followed reports earlier this week showing that industrial production fell more than economists had forecast and retail sales were flat in May, adding to concern that Japan’s recovery may be faltering after the economy returned to growth in the first quarter. The U. K.’s vote to leave the European Union has strengthened the yen and roiled financial markets, increasing risks to corporate earnings for Japanese companies.
The data will put more pressure on Bank of Japan Governor Haruhiko Kuroda to expand monetary stimulus at the policy meeting later this month, especially with the stronger yen and the central bank far from its 2 percent inflation target.
‘High Chance’ of Easing
‘Given concerns over the effects of the Brexit vote and the strengthening yen, there is a high chance that the BOJ will ease further at its July meeting,’ said Hiroaki Muto, chief economist at Tokai Tokyo Research Center in Tokyo. ‘If the BOJ doesn’t move this time, there’s a possibility that the yen will strengthen further.’

This post was published at David Stockmans Contra Corner on July 1, 2016.