Friday, 9 October 2015

A few macro and related thoughts today...

A few macro and related thoughts today...

Markets – some strong moves yday in the US setting up European futures today: S&P futures have rallied for 6 of the last 7 days, adding 7.0%, making this the biggest 7 day rally since Tuesday 6 December 2011 (Predicted Markets). It was the first time the S&P 500 closed above the 2,000 mark since August 20, and the first time the Dow capped a day above 17,000 since August 19 (Bloomberg). US crude oil prices surpassing the $50 a barrel mark for the first time since July.  

It really has been a strong start to October...

(h/t @RyanDetrick) 

...and that has helped other risk assets including the Australian dollar:

I liked this too via @HaidiLunCNA:

Rupiah +10% (best week in 14 years -10% YTD)
Ringgit +7% (best week since '98 peg -16% YTD)

Fed Minutes interpretation: lower chance of a rate rise Oct: 8% (Prev. 10%), Dec: 39.3% (Prev. 42.4%), Jan: 47.8% (Prev. 50.5%) Mar: 61.4% (Prev. 63.3%).  Meanwhile in an interview post minutes publication Fed’s Williams: If Hit By Future Shock Fed Could Consider Negative Rates, QE, Or Forward Guidance!   Surely not the biggest surprise no rate rise...

(h/t @not_jim_cramer)

...and also not too long before the US runs out of cash:

(clearly a deal is going to be done ultimately) 

European economy – slightly different economic tone in Europe.  This from Peter Praet of the ECB: “The economic environment is characterized by seeping pessimism about long-term growth” (link here). 

Meanwhile German FinMin Schaeuble concerned about EM slowdown – and so he should be given those poor German trade numbers yday.

Greece - EU’s Dijsselbloem: Creditors Agree Greek Debt Relief Should Be Via Capped Debt Service Costs (Circa 15% Of GDP) (Reuters) (link here).   

Meanwhile the Greek press are talking about EU Said To Mull Merging Greek Banks' Subsidiaries’ (Kathimerini).  Some of the payback for Tspiras playing ball…  15% of GDP in debt service cost still = a good indication of the severity of the issue.

Germany/UK talk – ‘British officials confirmed that while the two leaders would discuss Syria and the migrant crisis, the British side envisaged the main topic of conversation at the dinner in Chequers on Friday night would be about the British renegotiation. Mr Cameron is expected to seek support-in-principle from Mrs Merkel for British demands for Europe-wide reforms to that would delay the payment of in-work benefits to newly arrived EU workers’ (link here)

Still slowing visitors in HK – not easy for luxury etc. but factored in now…and hence why more +ve chat around Macau/Chinese govt support helping:

University vs apprenticeships - thoughtful chart from today's Financial Times

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