Save US Fed Excess Reserves (Yearly Change) vs. DXY Index

Fed's excess reserves have a highly negative correlation with the DXY index. (Y-axis is reversed for excess reserves in this chart.)

Since Fed put its QE program into action in 2008, excess reserves increased from 260 billion to 2.6 trillion. US dollars were weak, bouncing within the low end, because there was sufficient liquidity in the market.

Excess reserves began to reduce since Fed ended its debt-purchasing program in October 2014, as Fed's debts grew and the economy expanded. When Fed began raising interest rates in late 2015 and began shrinking its balance sheet in late 2027, liquidity of USD tightened, causing the dollar to spike.

To conclude that, excess reserves can be seen as an indicator for USD liquidity, with which it has a negative correlation. When Fed began to cut rates, implement open market operations, or purchase short-term debts, liquidity increases.

Save US 10-year Treasury Note Yield

US 10-year Treasury Note yield is closely connected with inflation. When inflation slows down, bond yield tends to fall.

Save US CPI vs. WTI Crude Futures

In the past decade, crude oil futures has a positive correlation with CPI YoY, and their correlation coefficient is nearly 0.6.

Save MM COVID-19 Confidence Index

More pneumonia epidemic charts are in the must-see for traders-pneumonia epidemic area chart group: https://pse.is/PXA2R
It is recommended that investors work together to grasp the latest situation of the epidemic.

The MM New Crown Pneumonia Confidence Index is an integrated index compiled by MacroMicro to exclusively integrate many factors that affect the confidence of Wuhan pneumonia. After the second epidemic, the world gradually showed a trend that the epidemic and the economy could coexist with each other. Therefore, the data and calculation methods used in the index were adjusted after the (2020/9/15).

MacroMicro believes that if the index shows that the pneumonia epidemic is under control, the market's confidence in the pneumonia epidemic will increase; if the index shows that the pneumonia epidemic has worsened, the market's confidence in the pneumonia epidemic will decline.

The MM New Crown Pneumonia Confidence Index mainly uses the following data, which investors can track and collect together:

1. Daily new confirmed cases of global pneumonia (excluding China)
2. The number of newly diagnosed pneumonia in the United States daily
3. Major European countries-the daily number of newly diagnosed pneumonia
4. Global-daily new deaths from pneumonia
5. U.S.-New daily deaths from pneumonia in China
6. Major European countries-daily new deaths from pneumonia
7. OFR Global Financial Stress Index
8. Apple mobile trend data

The MM New Coronary Pneumonia Confidence Index updates the previous day's value at noon every working day.

The official name of WHO is "COVID-19" and the official name of China is "New Coronary Pneumonia (NCP)".

Save US COVID-19 Deaths

Death rate surged in early 2020 as medical system went overloaded with patients. After mitigation measures were put in place, the pandemic went under control and death rate began to decrease. We've been stressing the importance of death rate as an indicator for the pandemic conditions.

Death rate = total deaths / total confirmed cases

Save US Initial & Continuing Jobless Claims

A small increase of jobless claims means the labor market is still stable.

Number of continuing claims are released later than number of initial claims by one week.

Save US Saving Rate vs. Consumption Expenditures

Personal saving rate is personal savings as a percentage of disposable personal income (DPI).

Save US Job Losers on/Not on Temporary Layoff

Job losers who expect to be recalled within 6 months are on "temporary layoff". Both data increase during an economic slowdown. If there's a surge in workers not on temporary layoff, it shows the economy is heading into a recession.

Save US ISM Manufacturing PMI: New Orders & Customer's Inventory

New order and production reflect the manufacturing activities in the near future. Customer's inventory reflects the potential new orders and production in the near future. When customer's inventory's low, employment and investment are likely to rise.

Save Taiwan Export Value: Electronics (YoY)

Exports account for 65% of Taiwanese GDP. Electronics account for roughly 40% of exports.

Save China

Save US Credit Spread vs. S&P 500

MM CCC credit spread = Merrill Lynch CCC-grade high-yield bond yield - US 10-year government bond yield (risk-free interest rate)
It reflects the market's expectations for future corporate default risk.

High-yield bonds are bonds issued by companies with low credit ratings. They have higher credit risk, so the yield will be higher than that of general investment-grade bonds. When the issuer's business is in good condition, the future cash flow will grow and the risk of bankruptcy will decrease. The yield will consequently lower. Possessing such bonds is like trading stocks, investors need to weigh on expectations for the corporate's business outlook.

The credit risk spread goes the opposite direction to that of the stock market, and the credit risk spread is less volatile than the stock market, thus making it easier for investors to grasp the overall condition of the financial market.

Save US Commercial Paper Rate & EFFR Spread

Commercial Paper is issued by corporations that need short-term, unsecured loans. Its average maturity is shorter than one year and it's issued in 2 types: AA and A2, both investment-grade.

Effective federal fund rate (EFFR) is the real inter-bank interest rate.

The spread between commercial paper rate and EFFR is a measure of the borrowing costs that banks with high credit ratings have. When liquidity gets tight, commercial paper rate rises and the spread widens.

Save US S&P 500 Yield and Bond Yield Spread

Yield spread between US stocks and US bonds = S&P 500 dividend yield or earnings yield - US 2-year bond yield

Dividend yield = dividend / price per share
Earnings yield = eps / price per share

Earnings and bond yield spread reflects which asset is more expensive, while dividend and bond yield spread indicates when you should increase/reduce exposures in stocks/bonds.

Save US Real Interest Rate & Gold Price

Real interest rate has a negative correlation with gold price.

Real interest rate = US 10-year bond yield - 5-Year, 5-Year Forward Inflation Expectation Rate

When the inflation % outgrows the interest rate raise, real interest rate declines and gold price rises. (Gold is more inflation-protected.)

When the deflation % is bigger than the interest rate cut, real interest rate rises and gold price declines. (Gold becomes less inflation-protected.)

Save CBOE Total Put/Call Ratio

CBOE's total put/call ratio includes index option and equity option. It's a popular indicator for market sentiment. A high put/call ratio suggests that the market is overly bearish and stocks might rebound. A low put/call ratio suggests that market exuberance could result in a sharp fall.

When 10-day average rises over 1.1, a trough might appear. When it falls below 0.8, a peak might appear.