Thursday, 29 October 2015

A few macro thoughts today...

Far too many company numbers to have anything more than just a summary review of some macro stories today...

Markets – a surprisingly hawkish FOMC comment which removed comments about watching out for external (non-US) risks (see below) raised hopes of a rate rise and hence the US dollar rose over 1% against the euro pushing the exchange rate into the 1.09s.  All of this heightening the risk of more market volatility in my view. 

(h/t @Reddy)

Meanwhile the probability of a move has pushed up quelle surprise:

(h/t @NicMilligan)

Going to be an interesting US GDP Q3 print later!

UK and Europe – interesting to note UK PM Cameron in Norway saying a ‘Norway-style’ more free trade deal would not suit the UK as has led to more budget and migrant obligations whilst having ‘no seat at the table, no ability to negotiate’.  The Brexit lines of discussion are becoming clearer...

Mrs Merkel in China – ‘China and Europe should establish a feasibility study on free trade talks as soon as possible, China's Premier Li Keqiang said on Thursday during a meeting with German Chancellor Angela Merkel. Premier Li also pointed out that China would be a huge market for Germany while the country can learn from Germany's industry’ (Reuters).  Sensible.  I note the start of the flow of deals...can Germany beat the UK's c. £30bn announced last week?

Migrant crisis – not often seen rift between German and Austria noted with the former suggesting the latter has abandoned a bilateral pact to manage flows in an orderly way.  Meanwhile Austria musing about building ‘fencelike structure on its border with Slovenia, the main refugee entry route into Austria’ (FT)  Would be if built the first physical obstacles built between members of the Schengen zone.  Still messy and doesn't exactly smack of a European Union...

China 5 year plan – later today delegates will agree on the 13th five-year plan of the People’s Republic, outlining the country’s economic and social development goals from 2016 to 2020. Details won’t emerge for weeks or months but rumours this morning suggest that GDP growth for the next 5-year to be set at 6.53% each year.  Would be a slowdown but no crisis given expanding size of the economy. 

Meanwhile at least margin debt has backed off a little...

Global market performance – fascinating graphic via @MktOutperform: 

Breadth of market poor: interesting observations sourced from here via @JLyonsFundMgmt


And finally...investment product reality!

It made me laugh at least.  Via @ldaalder. 

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