Tuesday, 24 March 2015

A few macro headlines and charts today

Been a bit busy so far this morning...so time only for a few headlines and key charts.  

'Greece can choose its own reforms…but it only has a week or two to do it' (link here).  Hello volatility my old friend...

...however it is telling this is no longer currently pushing the euro down as Predicted Markets noted:

'EUR/USD has rallied more over Friday and Monday (2.6%) than in any 2 day period since 12/13 January 2011, 1084 trading days earlier'.  

My view: no DAX 12k currently…and are we going to have a tilt at 1.10 Euro/$ sometime today?  Perfectly logical stuff. Unless you get structural reforms (way beyond just Greece) then equity markets in Europe are not going to be able to live without a weak euro...and the region turns into Japan #2.  

Bond flows - via Fast FT so far this year, inflows into US bond exposed ETFs listed in Europe have already exceeded the previous quarterly record

It is PMI day...

China - HSBC's "flash" China manufacturing index fell into contraction with a 49.2 reading, an 11-month low, down from 50.7 last month.  The micro structure did not look great either...

However the independent China Beige book actually read better (link here). Net net more stimulus likely (probably why the Chinese index did eventually end a long way off its lows)...not the only ones: 

Yuan use not rising outside of Asia as per a HSBC poll cited by Bloomberg (link here).  The survey 'interviewed 1,610 businesses worldwide with at least $3 million in annual sales, said 17 percent of those surveyed were using the yuan to settle transactions, down from 22 percent a year earlier. Usage in Germany slid to 7 percent from 23 percent and in France fell to 10 percent from 26 percent. China’s currency has strengthened 26 percent against the euro over the past 12 months'.

Interesting...trying to rationalise that.  My instinct remains global yuan use goes up and up...

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