Thursday, 24 September 2015

Macro and related thoughts today...

Macro and related thoughts today...

Draghi speech yesterday – ‘admitted that the central bank expected a weaker economic recovery and a slower increase in inflation rates’ but ‘too early to judge whether the slower rise in inflation would be a temporary or lasting phenomenon’.  My instinct: I believe central banks should consider raising their inflation targets to 2-4% to give more flexibility in policy…

Migrant crisis – some positive tones from an overnight meeting but so much angst around this with headlines like ‘Eastern EU states fight migrant “diktat” as ‘Hungary’s prime minister accused Germany of “moral imperialism”.  A good pan-European tone (not…)

Foreign exchange - This week has seen the biggest fall in GBP/USD over the opening three sessions of a week (-2.1%) since 11 March 2009, 341 weeks ago.  Meanwhile USD/CAD finished Wednesday at the highest closing level seen in the 2884 sessions since Thursday 12 August 2004 (statistics via Predicted Markets).  Some big FX moves.

Asia - China: volume in CSI 300 futures is around 1/100th of what it was in early June (Goldman), meanwhile slightly shabby Japanese manufacturing PMI numbers as ‘a number of panellists blamed a fall in sales volumes from China leading to a decrease in new exports. Subsequently, employment levels declined for the first time since March’.  

Back to China for another insight perhaps on the anti-graft drive: art auction sales down 31% from 2011 peak, non-payments rising (link here)

As shown by the Chinese PMI manufacturing data earlier in the week not easy out there.  Liked this via @Callum_Thomas on bankruptcies in Hong Kong:  

Top financial cities - 'London has swapped places with New York to become the world’s leading financial centre, according to a detailed study of 86 cities. Michael Mainelli, chairman of the think-tank Z/Yen which produced the report, attributed London’s better showing to reduced uncertainty following the general election, which produced a surprise win for the Conservatives' (FT). 

● London (+1)
● New York (-1)
● Hong Kong (-)
● Singapore (-)
● Tokyo (-)
● Seoul (+1)
● Zurich (-1)
● Toronto (+3)
● San Francisco (-1)
● Washington DC (+2)

Finally...some challenges/headwinds for 2016?:

Interesting re potentially a more hawkish Fed for 2016?!

Finally fascinating on globalisation...which has been a clear trend

...and potentially changes in world trade growth trends.  

The scope for these two above charts to be linked are pretty clear. 

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