Friday, 31 July 2015

A few macro and related thoughts today

Still very focused - as it is the height of the earnings season - on corporate announcements but nevertheless a few macro and related thoughts today: 

Greece – Some good and some less good news. Tspiras wins vote which boosts his authority/aids bailout terms acceptances but the IMF remain worried and said they ‘Won't Reach Deal With Greece On New Debt Program Until Greece, Europeans Find Way To Make Greece's Debt Sustainable’ (sounds like IMF trying to bounce Europeans into a debt restructuring). Meanwhile reports in the Greek press that a new wave of bank recapitalizations could lead to the loss of the bulk of the value of Hellenic Financial Stability Fund (HFSF) holdings in Greek lenders. In end-June 2014, the value of bank holdings owned by the HFSF came to 20 billion euros

No surprises that Greece has the worst sentiment but the best…hands up if you said Croatia!


(h/t @grodaeu)

Why confidence levels matter – given consumption is 60%+ of a developed market economy...


Ukraine - creditors said to accept small principal cut subject to conditions.  Eminently sensible if true
(link here).

US vs UK interest rate rises ‘the importance of the exact date of lift-off is overstated. It matters most for traders concerned with making a quick buck. The stance of monetary policy is reflected by the entire expected path of interest rates, not just the timing of any one move. And both central banks have made clear that take-off will be very gradual­—whenever it begins’ (Economist). 

Would totally agree with that.  Link here


Junk bond outflows again - well there is limited value in fixed income...


Asia - Patchy last day of the month for the Chinese bourse which at -14% is the worst performer this month, only 18% of stocks not trading properly (nice link on all this here).  Meanwhile Shanghai and Shenzhen Exchanges Limit Stock Trading Of 24 Accounts – sounds so prudent (not!)

Another big faller during July has been the Australian dollar which is at levels not seen since the dog days of early 2009...


As Fast FT notes this has been a pretty dire period...but only ranked fifth worst month in the last five years...

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