Friday, 20 November 2015

A few early macro stories today..

A few early macro stories today...

Real economy impacts ‘a survey by Synhorcat, the French hotel and restaurant operators’ union, suggests that sales (in Paris) during the past week are 44% down on the same period last year, while hotels have suffered a 57% drop in business’ (FT).  Almost inevitable I am afraid...

Greece – latest money raising at the Greek banks: “National Bank of Greece (NBG) book building process completed. Offer price: €0.02 per new share. (Eurobank at €0.01; Alpha Bank at €0.04)”.  Meanwhile the Syriza govt coalition majority down to 3 (153/300).  Still tricky times in the Hellenic Republic. 

Asia – relatively quiet day on the Asian bourses.  However China will lower lending rates for loans made under the standing lending facility (SLF), a policy tool to inject cash into the banking system, in the latest step to support the slowing economy as noted here. The overnight rate would be cut to 2.75 percent and the seven-day rate to 3.25 percent, effective Friday, the People's Bank of China (PBOC) said in its official microblog. The rates are now at 4.5 percent and 5.5 percent, respectively. "There is no doubt that the central bank's move is aimed at lowering the cost of bank liquidity,"

Carrying on the China theme: 

The inclusion of the yuan in the SDR is the key that opens the door to Chinese capital markets noted Pimco in this report. I kind of have some sympathy with this...

...meanwhile elsewhere:

Chinese borrowers are taking on record amounts of debt to repay interest on their existing obligations, raising the risk of defaults and adding pressure on policy makers to keep financing costs low.

A very good and concerning read here.  I certainly am comfortable with still preferring the Chinese consumer growth story currently.  

I see ABN Amro is coming back to the market.  Using the numbers below it appears to be trading at a suitable discount for an IPO but - to be honest - it is a name which I will only review when the first set of market listed numbers come out as there are plenty of other banks/related to look at currently (link here).

A few final thoughts.  Excellent insight into not only the patchy growth backdrop but also why the US dollar is too strong:

One way to change central banking - a bill designed to grant Congress enhanced oversight and influence over monetary policy and literally dictate a formula for setting interest rates in the future.  “The Fed must not be allowed to shield its vast regulatory activities from the American people and congressional oversight by improperly cloaking them behind its traditional monetary policy independence,” (link here).  

And finally… Test Your Financial Literacy in Five Questions.  Just 57% of U.S. adults passed this test. In Norway, Denmark and Sweden, 71% did, while in Yemen, it was just 13% (link here).  

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