Thursday, 8 October 2015

Some macro thoughts today...

A few macro thoughts today...

Markets – been an eventful trading period since China went on their week long Golden Week holiday: (1) The MSCI All-Country World Index posted its biggest six day gain since 2011 while China’s markets were closed (FT), (2) FTSE futures have rallied for 6 of the last 7 sessions, adding 7.7%, making this the biggest 7 day rally  since 5 December 2011 (PredictedMkts). Good bounce back from late September sentiment lows but feel key is going to be more mix during the upcoming earnings season...and now China is back to add their thoughts: 


Greece - Greek government wins confidence vote in parliament with 155 votes from the coalition parties out of 299 MPs who voted or as one commentator put it: "Syriza is now in charge of the austerity program, acting at the direction of the bankers and officials it once defied." Still believe a debt restructuring kind of required ultimately

Norway – taps on a net basis its oil fund for the first time as projections for FY16 suggest NOK204bn of oil / related revenue inflows and NOK207bn of government planned spending.  Interesting low sentiment signal (of course oil price/shares have quietly pushed up sharply over the last few days). As Bespoke Invest note if you believe this is a bull market it is still a youthful one...


IMF – Rajan of India at the annual IMF-World Bank meeting (in Lima) said involving the emerging markets more quickly in discussions plus a global safety net backstopped by the IMF was critical to put together.  Certainly a changing world…as this Chinese trade graphic shows: 


Chinese data – ‘China has signed up to the International Monetary Fund's Special Data Dissemination Standard, which the agency says will ensure timely and comprehensive economic statistics…There are now 65 countries that follow the IMF's voluntary guidelines’ (Marketwatch).  Translation: we really, really want the yuan to join the SDR

Fixed income  - super chart, showing the still structural decline of yields generally.  I would still state today that sovereign fixed income is generally not good value-for-money. 


Global currencies – the chart may be headlined 'climbs from record low' but I wonder if it is rolling over...


...and that will be the case if the US dollar continues to roll/fade just a bit which takes the edge off global imbalances/uncertainty: 


Later – just how many central banks (and board members) are speaking?!  BoE decision & mins, Carney & Shafik, ECB mins & Praet, Fed mins, Bullard, Kocherlakota & Williams

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