Tuesday, 13 October 2015

A few macro thoughts today

A few macro thoughts today...

UK retail sales – September generated the heaviest sales since January 2014, according to the new BRC-KPMG retail sales monitor. Retail sales +2.6% cent on a like for like basis from the same month last year, well above expectations for rise +1.5%, and above August's reading of -1%. The BRC noted ‘sales growth was boosted by the August Bank Holiday, which fell in this period as opposed to August last year, shifting back-to-school sales into September, so such strong growth is likely to be overstated. September's figures were also flattered by a soft comparable period last year, which was the worst performance of 2014’.

Europe - ECB picked up pace of asset purchases last week after slow start of Oct. Bought €12.5bn public debt vs €8.4bn week before. Meanwhile Italy said to prepare EUR 2.2bln rescue of 3 banks according to Reuters (link here). 

Meanwhile don’t forget Greece…

Impressive European dividend yields -

Asia – China posts its highest ever trade surplus but both imports and exports fell. September imports, in renminbi terms, fell 17.7% year-on-year, versus -14.3%in August . This is the 11th consecutive decline and the worst pace since May. Exports fell just 1.1%.  Great chart showing the generalised slowdown via @jsblokland: 

Yuan doing well…

Meanwhile Bank of Japan minutes mentioned ‘emerging markets’ 34 times in September vs just 16 in the August minutes and in discussing developments in Japan's economy, the central bank said exports had "recently been more or less flat", having said in August they had been "picking up, albeit with some fluctuations".

Talking about Japanese corporate profits – trending proportionately the right way.  Certainly back companies and not Abenomics per se...

Some of the early BoA-ML Fund manager sentiment survey charts out - always interesting (h/t @Callum_Thomas): 

Gold…out of favour but creeping up

Still the same crowded trades but not short EM now perceived as more extreme than short USD as latter has started to fade

Tail risk – China,EM – quelle surprise

Finally...Too much talking at the Fed –

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