Tuesday, 9 June 2015

A few macro and related stories today

A few macro and related stories today...

Greece #1 - The country's international creditors have suggested extending the country's bailout program until the end of March 2016, but disagreements over the conditions attached to the continued support and what would happen afterward risk undermining that plan, three people familiar with the negotiations told Reuters on Monday.  In my view madness…more can kicking.

Greece #2 – lack of agreement everywhere: according to Bloomberg sources, Schaeuble and Varoufakis disagreed on virtually all aspects of key points needed for an agreement… Meanwhile a split between German Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble is widening over Greece as the funding standoff goes down to the wire… Can someone show some leadership?

Euro – up to 1.13+ against the US dollar.  Plausible even with the above…because if the US dollar is too strong unbalanced world which is in no-one’s interest.  Recall that Gavekal Euro/US dollar PPP.  You can fundamentally justify a higher rate here but adjusting for the Greek excitements I would rate the rate as there/there abouts...



Oil - Is Cheaper Oil Good News or Bad News for U.S. Economy?

“Our analysis suggests that the expansionary oil supply shock of late 2014 and early 2015 will have a relatively modest stimulative impact on economic activity, which will peak around mid-2015, and the effects should dissipate significantly by early 2016”.  Good read

Asia key insights -

Nikkei 225 fell 0.7 per cent, a third straight loss. The yen rebounded 0.9 per cent overnight aka the ‘usual correlation'.  Still feels warped to me...

Meanwhile weak inflation data in China as per Fast FT:

The latest data underscored a weak economy. China's consumer price index decelerated to a year-on-year pace of 1.2 per cent in May, from 1.5 per cent in April, according to the government's official figures. That was the slowest reading since January and well below Beijing's target of "around 3 per cent" this year.

Producer prices, meanwhile, deflated for a 39th consecutive month, falling 4.6 per cent year on year. The reading has been below -4 per cent for five straight months and the trend doesn't appear to be coming to a quick end.


A couple of final charts...

Excellent from @Linzcom on the crazy Sydney property market...


...and following my Visa piece last week (link here) I was not surprised to see this thematic positive.  Just awaiting the opportunity...



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