Friday, 11 September 2015

A few macro and related thoughts today

A few macro and related thoughts today...

Europe – under a headline of ‘Berlin fights plans to pool Eurozone risk’ the FT runs a story noting that ‘Germany is determined to halt plans for the eurozone to pool more risk’ at a meeting later today.  Sounds like the summer holidays are formally over…

Greece - Poll: Syriza Party Lead Widens To 5 Points (Efsyn).  Meanwhile this is good as a write-up on the Greek elections including observations like ‘Awkward, defensive Alexis Tsipras’, ‘Centrists struggle for air’ and ‘the fascists’ absence from the debate is likely to have little effect on their electoral performance’ 

Americas fiscal position – whilst Jack Lew the US Treasury secretary warned that US borrowing capacity will be exhausted before late October, a default on general obligation bonds issued by Puerto Rico is a "virtual certainty", analysts with rating agency Standard & Poor's warned as downgraded to CC from CCC. Earlier in the week a govt report said that debt restructuring was required.  Meanwhile interesting to see how corporate junk bonds (CCC grade) are doing:


Commodities – FT notes that its breakfast index (equally weighted price index of milk, sugar, coffee, orange juice, wheat, pork) had fallen to its lowest level in 6 years


Rugby world cup...and PPP – rugby and FX PPP! Includes observations that the rand 62 percent undervalued against the pound, the New Zealand dollar 28 percent and the Aussie 25 percent, according to the BigMac index, a purchasing-power measure (link here).  

A final couple of charts on China.  First the sheer amount of stimulus...


...and then in this chart from the front page of today's Financial Times the Age distribution of CEOs – China the youngest of the sample!  Nothing like the combination of stimulus and youthful CEOs! 

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