Wednesday, 16 September 2015

A few macro thoughts today

A few macro thoughts today...

Migrant crisis - German C’llr Merkel: Officials Must `Rethink' Response To Refugee Crisis. The EU's 28 interior ministers have again been summoned to Brussels for an emergency meeting to tackle the mounting refugee crisis after failing Monday night to agree a plan to distribute 120,000 migrants in Greece and Italy to other EU countries (FT). Still struggling to co-ordinate…


(h/t @GreekAnalyst) 

Meanwhile this chart probably needs updating for Europe...



Greek election – still very close: ND 27.5, Syriza 27, GD 6.5, PASOK 6.5, Potami 5, KKE 5.  Remember the winner gets bonus votes. Tsipras: "Sunday's dilemma is simple: do we want the Greece of the many or of the few? The Greece of progress or of conservatism?"


(h/t @GreekAnalyst) 

European economy - ECB's Weidmann: Euro-area recovery has been "solidified" (SZ via BBG).  Was he looking at the ZEW yesterday?  At least UK real wages were positive...

Federal Reserve meeting starts – interesting stat for a supposedly quiet week until the decision period from Predicted Markets: ‘The 167 point (1.0%) net rally seen in the Dow over Monday and Tuesday marks the strongest start to a week for 9 weeks’. 

Maybe it is because people are now...net short S&P 500 futures apparently...


(h/t @ldaalder)

Fourteen of the 30 economists surveyed by the Financial Times expect the US central bank will lift rates for the first time since the financial crisis when it concludes its two-day policy setting meeting although as this article highlights the current market implied rise proportion just 28%.  Super link on all related matters here.  


China - Shanghai Margin Debt Balance Drops To Lowest In Nine Months possibly influenced by this observation that 1300 Chinese hedge funds have been liquidated since the Chinese financial crisis started following new restrictions on trading in stock-index futures, a key investment strategy to dampen volatility and avoid big losses.  I wonder how many were leveraged rather than hedged?!  Meanwhile the Shanghai bourse trading around that key psychological 3k level…

...so the inevitable chat emerges… “China Is Prepared On Policy If Q3 GDP Continues To Slow”

Japan – “They want the government to remember to build a more favorable business environment with such steps as corporate tax cuts, instead of just asking companies to spend more”.  Hmm...Abenomics still struggling in my view.  Link here

Emerging markets -
Relative to the S&P 500, the MSCI Emerging Markets index has only briefly ever been lower than it is now...


(h/t @TheStalwart) 

...and guess what areas fund managers are much more worried about re a crowded trade?  Opportunities in my view...



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