Monday, 30 November 2015

A few macro thoughts today...

A few macro thoughts today...

Migrant crisis – ‘a Brussels summit of EU leaders yesterday night prepared to bless a package offering Ankara fast-tracked visa privileges, Euro3bn in aid and the prospect of revitalised EU membership talks’ (FT)  Finally getting closer to the sort of deal that should have been struck months ago…

Big macro week ahead as noted in yesterday's post...

...including lots of chat about further ECB stimulus:

Sunday Times business section getting excited:
ECB chief plans new €600bn injection
Second dose QE may drag down to parity with

Morgan Stanley gets even more cautious re the euro…

Meanwhile talking about Europe and QE, it at least has boosted equity flows:

(h/t @AlastairWinter)

UK interest rates - Gertjan Vlieghe, the newest rate setter at the Bank of England, said he’s “relaxed” about keeping the benchmark at a record low for now.  Economic growth has to “stabilize or even pick up a bit” and wages need to rise more strongly before the bank should consider its first rate increase since 2007, Vlieghe said in an interview with the Sunday Times newspaper (link here).  Would agree, no imminent need to raise UK interest rates

Brazil - Brazil’s largest independent investment bank BTG Pactual moved to distance itself from a deepening crisis facing its embattled head André Esteves by replacing him on Sunday night with two co-chief executives. BTG on Sunday also denied a media report that prosecutors had uncovered indications it paid R$45m ($11.7m) to Eduardo Cunha, head of the lower house of congress, to pass a measure favouring one of its businesses, a failed bank, Bamerindus (FT).  Hmm!  

Asia – Asian markets generally down not helped by most-active iron ore futures in Singapore sank below $40 a metric ton for the first time on concern that the economic slowdown in China will cut demand as supplies from the largest miners climb. 

(h/t @mcdonaldsarahj)

Black Friday / related shopping – in the US online spending Thurs-Sat up 19% yoy to US$6.1bn.  Mobile devices 34% of online sales up from 27% a year ago.  Meanwhile the National Retail Federation sees entire holiday period spending projected to increase 3.7% yoy vs 4.1% last year.  So a continued structural mobile trend...but underlying sales not so hot (and what does it imply re Christmas sales?!)

Later – China SDR inclusion announcement?  IMF’s management insists that its review of the case for including the renminbi was purely “technical” in nature and focused on practical issues of whether the renminbi could be used in IMF transactions with its members (link here). 

Also the Paris climate conference kicks off. The COP21 summit, involving nearly 200 nations, is intended to produce a global agreement to reduce carbon emissions and limit temperature change. The meeting will run through Dec. 11.

On the latter, the view in Beijing today:


(h/t @rafferty_tom)

Meanwhile talking about emissions some countries matter more than others...

And finally, if you want to watch one thing this week:

Big DXY levels currently -

(h/t @1800ASENNA)

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