Friday, 13 November 2015

A few macro thoughts...

A few macro thoughts today...

Migrant crisis – German finance minister Schauble on the migrant issue in a pretty clear attack on Merkel: ‘you can trigger avalanches when a rather careless skier goes on to the slope…I don’t know whether we are already at the stage where the avalanche has reached the valley…’. 


Meanwhile Donald Tusk is warning that ‘Schengen on brink of collapse’ (link here). 

UK rate debate – Haldane of the BoE Monetary Policy committee speaking at the TUC conference yesterday ‘my view is that the case for raising interest rates is still some way from being made.  Whatever the reason, the economic aircraft appears to be losing speed on the runway.  That is an awkward, indeed risky, time to be contemplating take-off.  Meanwhile, inflationary trends do not at present given me sufficient confidence that inflation will be back at target, even two years hence’.  

City of London losing edge? - London is losing its edge as an international banking centre, a new report out today has warned, saying that “urgent action is needed if the UK is to remain an attractive location for foreign banks and provide a competitive business environment for UK wholesale banks to challenge overseas” (link here). 

Europe other - since start of euro QE…mostly rises in bank deposits offsetting QE expansion.  Not exactly an efficient monetary policy transmission mechanism...


Asia – equity indices set for third straight weekly drop in Asia.  China loan data did little to instil confidence, as new loans slumped to Rmb514bn ($80.6bn) in October from Y1.05tn in September.



 

The Chinese yuan is just one session short of its longest depreciation streak on record.  At nine sessions, this is the longest weakening streak for the reference rate since 10 sessions from July 30 to August 12, 2008. Talking about the yuan IMF official says expects to announce SDR board meeting date very soon, SDR decision is up to the executive board.  

Not quite a currency war then (yet). 


(h/t @RANSquawk) 

Global warming - correlation and causality?
 

And finally...this is still working out well as put together by @RyanDetrick

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