Wednesday, 4 November 2015

A few macro thoughts today

A few macro thoughts today...ahead of yet another busy corporate earnings day! 

Europe – Osbourne lobbying appear to be having some impact as Merkel observes ‘the British concerns are our concerns’ as ‘the Europe of today is no longer a Europe of one speed’.  Surely nothing to do with the notion that (as per a Telegraph headline) that ‘(UK) Chancellor warns Germany he will veto eurozone integration unless pound is protected in Britain's new deal’.  Meanwhile speaking at the FT's banking summit in a personal capacity, Colm Kelleher, chief executive of Morgan Stanley International, said: ‘Were Great Britain to leave the EU, you would see significant backlash against London as a global financial centre’

Clearly a number of inter-linked issues...

Services PMI day - According to two surveys compiled by Markit, the service sectors in China and Japan each picked up momentum in October. The purchasing managers' index for China rose from a 14-month low of 50.5 in September to 52.0, the best score since July.  The survey provider even said China did not need more stimulus help…which I find unlikely.

China comments problems – China’s central bank unintentionally sparked a surge in the nation’s stock market by publishing five-month-old comments from governor Zhou Xiaochuan that said a link between exchanges in Shenzhen and Hong Kong would start in 2015. Zhou’s comments were published in a lengthy article dated Tuesday on the need for Communist Party discipline that appeared on the PBOC’s website without any indication that the statements were old. The central bank later confirmed in a text message that Zhou’s comments on the link were taken from a speech on May 27. Hong Kong’s bourse said in a midday statement that the program is still subject to regulatory approval. The clarifications came after a 3.3%surge in the Shenzhen Composite Index and a 3.1% gain in Hong Kong’s Hang Seng Index’ (Bloomberg)

Postscript: China actually up more now on the day! 

Japan Post IPO – biggest IPO for well over a decade goes very well: Bank unit: +16%, Holding unit: +26%, Insurance unit: +56%.  A postal unit undervalued by its national government...where have we heard that before (Royal Mail!)

Why bitcoin is romping - 'BTCC (China’s leading Bitcoin Exchange) announced it will now accept direct deposits (making it significantly easier for Chinese to rotate their Yuan deposits into the virtual currency and out of the potential clutches of capital controlling communists)… bitcoin has become the go-to asset class for millions of Chinese savers seeking to quietly and under the radar transfer funds from point A to point B, whatever that may be, in the process circumventing the recently expanded governmental capital controls' (link here). 

Asia demographics – 100m extra workers potential in China...

...which may change this:

And then there is European demographics! 


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