Monday, 17 February 2014

It remains a funny world...some sources of volatility (Japan, Brazil, China)

Brewing issues in the world that strike me today...

Japanese GDP trends - Abenomics looks more challenged today as annualised growth is deep in the 'positive but dull camp', the Bank of Japan note that as inflation is heading towards 2% they don't need to undertake more stimulus and real wage growth remains supressed.  Whilst domestic factors were positive, capital investment by companies +1.3 per cent and consumer spending +0.5 per cent is simply not good enough.  Japan is getting boxed in policy-wise, especially as consumption taxes are to rise shortly...next stop exchange rate and/or bond market volatility. 
 


What was a chart that accompanied a potential falling of the Brazilian economy into recession article in the Financial Times?  This one on housing price moves in the country...despite all the major sporting events in the next couple of years, housing angst spilling onto the wider local economy awaits


And then we have China.  Who saw the lending numbers over the weekend? This excellent report was helpful, here's an extract:

'China's new yuan-denominated lending reached 1.32 trillion yuan (US$216 billion) in January, up 246.9 billion yuan (US$40.7 billion) year on year, the central bank said Saturday.
The monthly new lending set a four-year high'
Now the pre Chinese New Year period is always busy but this highlights to me that continued waxing/waning support as the authorities grapple with the shadow banking issues is likely.  That will spill over into local and global markets...

Meanwhile the volatility index most investors look at - the VIX - remains flat on its back...
 


 
It remains a funny world...

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