Friday, 4 September 2015

A few macro stories today...

A few macro stories today...

ECB summary – FT front page opines ‘Draghi opens door to more QE in face of global tremors’.  The lowered growth projections certainly feel consistent with this.  

My fear would be that – like Japan historically – is that Europe is becoming too stimulus dependent and that structural reform (driven by govt’s and not the ECB) is taking a back seat. 

Also noteworthy today some pretty poor German construction and Eurozone retail PMI numbers:

Data today – US NFPs out later with a 220k estimate consensus.  

On a related front a panel of ex-Fed officials say no rate hike will come at September meeting (link here).  Meanwhile the Fed’s Kocherlakota again dovish on rates and said ‘Will Be Several Years Before Inflation Above 2%, - Keeping Rates On Hold In '15 Will Also Boost Jobs’

My view: as I have talked about in the last couple of Financial Orbit Speaks, don't be scared of a US interest rate rise - the fear of it more than offsets any practical reality.  You have to say though that the PMI and related data points over the last few weeks are not particularly conducive to a rate rise...

G20 – kicks off today.  EZ official speaks from G20 (on condition of anonymity): G20 discussing China, Fed rates and will not discuss Greece.  Meanwhile talking about Greece an IMF Official noted ‘Will Work With The New Greek Govt. When It Is Ready To Discuss Policy…In The Mean Time Will See How Greek Elections Unfold’

EU budget - Britain quietly settled its latest altercation over the European Union budget by paying a 1.7 billion-pound ($2.6 billion) bill that Prime Minister David Cameron originally derided as “appalling.” (link here).  

Asia – China closed today but general weakness in markets and the MSCI Asia Pacific Index falls for a 7th straight week, the longest such decline since 2011.  The Hong Kong PMI hardly great either...

I liked this from today's Financial Times, emerging markets regional performance still being led by 'emerging Asia'...

...although the leadership has changed: 

Finally, really interesting on market sentiment: 'Be greedy when others are fearful': 

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