Thursday, 12 March 2015

A few early macro views and thoughts

A few overnight (GMT) macro views and thoughts...

FX – dollar trade weighted (DXY) goes to 100…



…so a ‘$9trn stress test’ for the emerging markets (link here)

(I personally am not so pessimistic about the EMs and hence I would perceive the emerging markets are are probably pleased to see this)


Euro – moved below 1.05 briefly overnight against the US dollar, lowest since 2003.  ECB may be pleased with the move but almost unprecedentedly rapid /putting pressure on the global system as I have been detailing over recent week...

(h/t @bespokeinvest)


Greece – pressure building: ‘the general government primary budget surplus posted a remarkable drop in January compared to the same month last year…general government primary surplus amounted to just 419 million euros in January, against 1.8 billion a year earlier, putting extra pressure on the Finance Ministry’.  So they are looking to tap alternative sources of capital: Tsipras still claiming Athens owed Euro160bn in compensation from WW2…hmm. Still need a deal/haircut here. 



Ukraine - IMF's executive board has approved a new $17.5bn bailout for Ukraine.  Also highlighting ‘exceptional risks’.  Exceptional risk of unfortunately not getting the money back too. Unfortunately  what do you do?  Ukraine/Russia still underestimated as an issue...

China - "The PBOC is the Bundesbank of EM… It is conservative and does not have the mindset of the Fed”.  Maybe not but I still reckon they cut rates progressively as this year goes on…at the very least to respond to US$ strength noted above.  Interesting link nevertheless.  

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