Friday, 5 June 2015

A few macroeconomic charts and thoughts today

Greece – so citing the precedent of Zambia in the late ‘70s Athens has informed the fund that it will not make a €300m loan repayment on Friday and will instead use a rarely-used IMF rule that will allow Greece to bundle all €1.6bn it owes in June and pay at the end of the month.  Discussions ongoing: to watch for later Greek PM Tspiras is set to brief parliament on negotiations on Friday at 6pm Athens time, followed by a debate.  Just kicking that can…European financial markets to remain volatile
Greece #2 – latest Varoufakis blog: comparing Greece now to post-war Germany.  Interesting strategy!

China - since a recent nadir on May 29, the Shanghai Composite has risen 12.4 per cent. Today, it topped 5,000 for the first time in seven years before falling back. In China this year there have been 144 IPOs, average gain has been 539%, ave move on 1st day 44%.  

Flows also remain strong...


...whilst margin debt increases remain high:



Sentiment - whilst China is characterised by high sentiment in the US market the most striking sentiment component is the neutral one...


...and companies willing to buyback materially.  Look when this last peaked: 2007.  Hmm. 


OPEC meeting today - Saudi oil minister Naimi says oil supply from outside OPEC has shrank; demand is improving slightly along with the global economy.  Let's see how the meeting goes...


Non-farm payrolls also out today - US jobs report for May is expected to show growth of 226,000 jobs, up from 223,000 in April. The unemployment rate is expected to stay at 5.4 per cent, which is the lowest since May 2008. A figure below 150,000 or above 250,000 would force investors to shift forecasts of when the Fed will lift interest rates.  Famously yesterday the IMF told the US to wait until 2016 to raise rates…

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