Thursday, 17 December 2015

A few macro stories today...

A few macro stories today...

US rate rise impact – in short markets up (European futures still positive) and the dollar up including the observation that USD/CAD finished Wednesday at the highest closing level in the 3006 sessions since Tuesday 18 May 2004.  For me watching the level of the US dollar all-important and the euro weakening any further from the current 1.085 level not good for global sentiment.

My write-up from yesterday's rate rise can be found here which includes this excellent graphic!

Go on...a couple more Fed and related charts...

Asia – equity markets up reflecting the reaction to the Fed.  Unsurprising rate rise in Hong Kong as HKMA's Chan notes No Plan To Change Dollar Peg.  Meanwhile another small weakening of the Chinese yuan as the PBoC Fixes Yuan Reference Rate At 6.4757 (prev 6.4626).  That’s 5.88% softer than where the renminbi was valued before the mid-August “devaluation,” and it’s also the weakest fix since mid-July 2011.  As noted above, FX rate are important. 

Europe - The EU meets in Brussels. On the agenda for the two-day summit are sanctions against Russia, anti-terrorism efforts, and the UK’s demands over its continued membership (Mrs Merkel has noted that ‘her support for British EU membership does not come at any price, but officials promised that Germany would be “extremely helpful” to David Cameron’).

Brexit – the latest poll shows ‘leave’ greater than ‘stay’.  But it is more complex than that: ‘Those who put Cameron back in Downing Street in May hold the key to the referendum’s outcome. More than half of 2015 Conservative voters put themselves on the “leave” side of our 100-point spectrum, and they currently see staying in the EU as a bigger risk than remaining…Much will depend on whether the PM is able to persuade his own supporters that continued membership is an asset, rather than a threat, to the security, freedom and independence they prize’ (link here). 

Climate – China is the low-carbon superpower and will be the ultimate enforcer of the COP21 climate deal in Paris (link here). Very interesting read. 

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