Thursday, 4 June 2015

Financial Orbit wrap 04/06/15

Five sentences or graphics which sum up the Financial Orbit output over the last 24 hours across the website, twitter account and anything else thought about...

1. ECB redux – The only Draghi quote you need to know: "We should get used to periods of higher volatility. At very low levels of interest rates, asset prices tend to show higher volatility,".  Bunds at highest level since October and have suffered the worst 2 days re change of yield in 17 years.  Where bond volatility starts…does equity volatility follow?



2. Commodities - good chart from today's Financial Times...correlations have fallen to near zero equals in my mind diversification / portfolio level opportunities.  Interesting for such an out-of-favour area...

3. Greece - Via Fast FT "Athens has informed the International Monetary 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...Although the bundling practice is not unprecedented, it has not been used in four decades. IMF officials said the last time it was used was by Zambia in the 1970s".

Yet another kicking the can down the road! 

4. IMF and US interest rates - really good write-up here

The FOMC should remain data dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident. Based on the mission’s macroeconomic forecast, and barring upside surprises to growth and inflation, this would put lift-off into the first half of 2016.

5. Joy Global - I write up the value case in my latest Yahoo Finance Contributors article (link here)

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