Thursday, 6 August 2015

Some macro thoughts and charts today

Some macro thoughts and charts today...

Europe’s sovereign debt restructuring updates - German Gov’t Doubts 3rd Greek Deal Can Be Ready By 20 Aug (Bild).  Meanwhile in the Ukrainian debt talks creditors happy with a 10% haircut, Ukraine dropped demands for a 40% one.  20-30% compromise?  Still lots of scope for vol…

China – quieter day in the local market despite comments in the Securities Journal that ‘China's Monetary Policy Isn't Effective Enough, Fiscal Policy Should Have A Larger Role’.  Meanwhile Goldman Sachs notes that China's stock market rescue has cost Beijing $145B so far, 1.6% of total market cap. More liquidity to come, RMB2T available.  Would agree more stimulus likely.

Saudi - Saudi Arabia may go broke before the US oil industry buckles (link here)
Saudi Central Bank: "It is becoming apparent that non-OPEC producers are not as responsive to low oil prices as had been thought"




Oil – 5 year future falls to level below that seen in 2008-9…kind of interesting given the differences in spot prices between then and now



US consumer - Why Isn’t The American Consumer More Optimistic? If previous optimistic levels are never reached, it may be a sign that the American consumer has moved into a more permanent pessimistic mindset. Fascinating link here 


Watch out for – UK ‘super Thursday’ data from the Bank of England covering rate decision, minutes, economic forecasts and much more… Very good preview from today's FT: 


September US Fed rise – now 50:50 as per market hopes


But is there a need?  Lovely comparison with a couple of years ago by @bondvigilantes...


...and @SoberLook noted a real divergence between the services and manufacturing aspects of the US economy currently.  Feels to me as if the strong US dollar should net net be a dulling factor for the speed of US rate tightening.  Recall that low EPS growth chart I showed in Sunday's Stories we should be thinking about  (link here)


 

Finally...this is surely about who relies more on whom...  Absolutely fascinating! 


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