Friday, 28 August 2015

A few macro and related thoughts today

Jackson Hole symposium properly starts today – schedule below.  Watch out for thoughts of Swiss central bank head today and Carney and very importantly Fischer tomorrow (link here). 

Let’s see the comments on all this: ‘Overseas Bankers, Officials Urge Fed Not to Waver on Interest-Rate Rise…Some international officials have a message for the U.S. central bank: Get on with it already’ (WSJ)

Global growth - Moody's revises forecast for G20 economies' growth downwards to 2.8% in 2016. the revision mainly reflects the impact of a more marked slowdown now forecast in China and more prolonged negative  of low commodity prices on G20 producers than earlier expected (link here).  

Meanwhile Moody’s also issued an interesting bond report

Ukraine  - ‘creditors…said the restructuring (20% bond haircut) would allow Ukraine to maintain its access to capital markets and provide the stable economic platform that will help the country to restore growth’.  Greece take note! However not all over…one big other creditor to deal with…

French labour market reform – Macron the French EcoMin said the French labour market must become more flexible, sees suitable political support to pass new reforms and pledges these in coming months. Sounds good but let’s see the reality. 

Outflows/inflows - Biggest US Stock Outflow Since August 2014 - US equity ETFs saw weekly outflows of $4.4bn to August 26, despite recovering with inflows of $5.4bn on Wednesday. Tuesday saw the biggest daily outflows in August while Wednesday saw the biggest daily inflows. Investors pulled over $25bn out of global-tracked equity funds, according to the data, and global-tracked emerging market equity funds are on course to record their biggest weekly outflow in over seven years.  Reflecting the volatile conditions the Dow has rallied for 2 days in a row, adding 6.3% making this the biggest two day gain since 5 December 2008, WTI crude Oct'15 futures settles higher by 10% which is the largest intra-day gain since 2009.  Still feel it is more about mix than anything else…

Volatility blame - China's devaluation of its yuan currency should not be made a scapegoat for the recent global stock market rout, a senior Chinese central bank official said on Thursday. Instead, Yao Yudong, head of the bank's Research Institute of Finance and Banking, said concerns over a possible US interest rate rise this year may have fuelled capital flight out of emerging markets (link here). 

(h/t @RANsquawk)

China profits - China industrial profits extend decline, -2.9% in July (after -0.3% in June). Biggest drop since Jan-Feb Chinese New Year lull of -4.2%.  Feels more important than the more tedious GDP/stock market debate...

Japan - Japanese FinMin Aso: Not Considering New Economic Stimulus At Present
Real Wages Are Rising, So Consumer Spending & CPI Will Remain In Upward Trend

Well he may be optimistic...but the lack of consumption spend is not the greatest...

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