Monday, 28 September 2015

A few macro and related thoughts today...

A few macro and related thoughts today...

Some pan-European pressures this morning...

Spain/Catalan election - Separatists have won a clear majority in Catalonia's regional parliament. The main secessionist group, Together for Yes, scooped 62 seats in the 135-member assembly while the radical left pro-independence Popular Unity Candidacy party won another 10 seats.  The central government in Madrid has vowed to block any declaration in court because it would breach the Spanish constitution. Prime Minister Mariano Rajoy has opposed attempts to hold a referendum on secession and has labelled the breakaway plan "a nonsense". One compromise could be the implementation of a more favourable tax regime and laws that better protect language and culture – seems the sensible suggestion to me.  Euro down a little on this at 1.118

UK interest rates – another lower for longer? Bank will not lift rates until mid-2016, says CEBR think-tank.  Forecasters also expressed concerns over the sustainability of the recovery (link here)

IMF global forecasts – linked with the above wave of global lower interest rates, IMF likely to downward revise its global economic growth forecasts.  Lagarde: "A forecast of 3.3 percent growth this year is no longer realistic. A forecast of 3.8 percent for next year neither. We will however remain above the 3 percent threshold,"

Flow of money – via front page of the FT: ‘Saudi Arabia has withdrawn tens of billions of dollars from global asset managers as the oil-rich kingdom seeks to cut its widening deficit and reduce exposure to volatile equities markets amid the sustained fall in oil prices’. Could be an important flow of funds influence on the markets/they will not be the only ones

Talking about oil prices – UK medium-term budget impact:

China – chat in the state-controlled Economic Information Daily  of 10 new (stimulus) policy measures to be announced for Q4 soon.  Meanwhile industrial profits in China fell -8.8% yoy in August at their fastest year-on-year pace in at least 47 months since October 2011.  Chinese market margin lending now down 62% since June peak. 

Looks already that early stimulus policies having some effect (link here)

Yuan/SDR IMF – looks as if Xi had a positive trip to the US…

General markets - correlations high...

(h/t 'The Daily Shot') 

...and sentiment shabby as many believe markets are overvalued. 

Sounds like a stock picking market still to me! 

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