Monday, 2 March 2015

Some global finance news, charts and views today

A few stories that caught my eye this morning: 

Greece #1 - Apparently ‘haircut’ is an unacceptable word as per this link…so is it really going to be credit swaps as a solution for Greek debt?  Either way more discussions needed as the can just kicked down the road so far.



Greece #2 – Bit of paranoia creeping in: ‘Greece's leftist Prime Minister Alexis Tsipras accused Spain and Portugal on Saturday of leading a conservative conspiracy to topple his anti-austerity government, saying they feared their own radical forces before elections this year’.  Bit paranoid but correct logic…

European banks/haircuts - Austria won’t give fresh capital to Heta Asset Resolution AG, making the “bad bank” of failed Hypo Alpe-Adria-Bank International AG the first case under new European Union rules imposing losses on bank bondholders.  Definitely haircuts for bond holders coming here…

US markets/earnings - “However, the recent sharp rise in the S&P 500, relative to earnings, has raised the probability that we may be entering a bubble. This probability has still not exceeded the key confidence threshold of 95 per cent so, strictly, the verdict of the model is “no bubble”. But in February, the probability rose to 78 per cent, which is not negligible” – Gavyn Davies writing in the FT today (link here).  Got to have some sympathy with this view.  



UK election update – ‘pollsters at Opinium said it appears that the two main parties are statistically tied, with variations in recent weeks being within the bounds of statistical error’.  This one is going to run and run (until May at least). 

Asian manufacturing PMIs -

India HSBC Manufacturing PMI (Feb): 51.2 (prev 52.9)
Five month low but foreign orders better...

Indonesia HSBC Manufacturing PMI (Feb): 47.5 (prev 48.5)
Activity in the manufacturing sector continues to soften

China HSBC Manufacturing PMI (Feb, F): 50.7 (exp 50.1 flash 50.1)
Marked reductions in both input and output prices indicated that deflationary
pressures persist.”



Japan JMMA Manufacturing PMI (Feb, F): 51.6 (flash 51.5)
Manufacturing production rises at quickest pace since March 2014

South Korea HSBC South Korea Manufacturing PMI (Feb): 51.1 (prev 51.1)

Australia AiG PMI (Feb): 45.4 (prev 49.0


Other interesting stuff in Asia post the Chinese rate cut -

Yuan traded at its weakest level since October 2012


Relatively modest gains in Asian bourses - an interesting signal given that generally Chinese interest rate cuts are taken very well/positively.  

Yen close going through 120 level vs the US$ again...and I think is going weaker.  Exports in reality is the only sustainable driver of the manufacturing PMI numbers above.  

HKex says data shows no shorting of eligible A-shares via HK-#Shanghai stock link as of 11:40am local time!!  That sounds like trouble to me

Australia Company Operating Profit (QoQ) Q4: -0.2% (exp 0.5% prev 0.5%)

- Australia Inventories (QoQ) Q4: -0.8% (exp 0.1% prev 0.7%).  Interesting observations given the Australian PMI data above...


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