Tuesday, 12 May 2015

A few macro and related thoughts today

A few macro and related thoughts today...

Greece – More chat...

Varoufakis: No plan for capital controls in Greece, Greece prepared to make more compromises, but any deal must end debt-deflation spiral, targeting deal within a couple of weeks. 

Eu's Dijsselbloem: Up to the Greek's to decide on referendum; We can’t discuss a 3rd bailout until we have completed current process

The saga continues...

Sterling is on course for its biggest two-day gain against the euro since January 2009, as the euphoria at the unexpected victory for the Conservatives hit a single currency already weakened by worries over Greece and the European Central Bank's quantitative easing programme. Building on this UK euphoria will the in/out referendum on Europe occur in 2016? See this link here 

Bonds - The yield on the ten-year Treasury shot up 12 basis points to 2.26 per cent, eclipsing its previous high for the year of 2.24 per cent set in early March, and well above the low for the year of 1.64 per cent from late January.


Talking about fixed income, there will be lots of need to roll over debt in China as per this chart:

Talking about China, Nick Leeson of Barings Bank collapse fame warns over the Shanghai Connect (link here).  Talking about bubbles in China, I thought this was instructive.  Early days still?!  


Well in this great graphic sourced from @AlastairWinter whilst the US may be taking away the QE punch bowl...other central banks are still pouring...


Look at even the 'prudent Swiss' balance sheet!



And the impact of all of this?  Well record art prices as noted here.  If you put too much easy money into the system...




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