Thursday, 10 December 2015

A few macro and related stories today

UK interest rates – BoE expected to leave them unchanged as detailed at this preview (link here). Interest rates matter of course as the Royal Institution of Chartered Surveyors has reported that a chronic shortage of new properties will push house prices even higher as the average London property pushes through £600k. Swiss central bank also out with their views later today too.

Exchange rates – “Chinese devaluation is a bigger danger than Fed rate rises…The yuan has fallen to the lowest in five years against the dollar. If China devalues in earnest, it will be an earthquake” (link here). 

At least the fiscal stimulus still apparent as per this chart from @Callum_Thomas:

Oldie but a classic – so if the Fed don’t increase the balance sheet in 2016 what does not do to markets?!

(h/t @jsblokland)

Asia – NZ kiwi remaining higher vs USD despite a cut in interest rates and an observation that a strong NZD 'Unhelpful' and Further Depreciation Would be Appropriate.  Meanwhile in Australia there was another strong jobs numbers which has raised questions of credibility e.g. “To put into perspective, today's jobs number in Australia would be like America creating 940,000 jobs in one month” (h/t @linzcom for the last statistic). 

Elsewhere in Asia...

Chinese volumes/liquidity down sharply.  Or was it that the run up to the summer was overly strange/warped?

Alternative Chinese economy indicators…like them.  That's how to think about a more services based economy...

(h/t @AngusGrigg) 

Oil/climate change - Saudi Arabia accused of trying to wreck Paris climate deal…One of the world’s largest oil producers is getting in the way of a deal and making implausible objections, say delegates and campaigners (link here).  

Non Santa rally - S&P futures have fallen for 3 days in a row, dropping 2.1%, making it the biggest fall in opening 3 sessions of a week for 37 weeks. T-Notes have rallied for 4 days in a row adding a total of 29+ ticks. Run has extended to 5 days once in 164 sessions (stats via Predicted Markets).  

Well a Santa rally is typically in the second half of December…

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