Monday, 21 December 2015

A few macro thoughts today...

A few macro thoughts today...

Spanish election – uncertain outcome as with almost all votes counted, the Popular Party (PP) had 123 seats; the Socialists 90 and the anti-austerity Podemos party 69. The liberal Ciudadanos party was in fourth place with 40 seats.  The PP could find it very difficult to form a government because it can't achieve a majority in parliament in coalition with Ciudadanos, its most natural partner. The Socialists, on the other hand, could form a pact with Podemos and Ciudadanos. El Mundo front page: "Spain buries bipartisan system, government up in the air". La Razón front page: "Rajoy wins election with ungovernable parliament".

Still at least on this issue the Greek PM appears happy: 

 (h/t @nosunkcosts)

Greece – talking about Mr Tsipras: ‘Greek prime minister Alexis Tsipras is pushing for the IMF to stay out of the country’s Euro86bn third bailout’ (FT).  Just wants the Eurozone to be involved.  Germany unlikely to be happy!

And in yet another indication of European tension:

Brexit – newspaper reports suggest that up to half Conservative MPs poised to vote for Brexit due to ‘inconsequential’ reforms.  Meanwhile this report very interesting on why a referendum is only likely in 2017 (link here).  

Asia – earlier, Japan -1.7%, now fallen nearly 4% since the BoJ tweaked its monetary policy on Friday, a surprise announcement that brought confusion because it wasn’t clear if the action represented more stimulus.  Meanwhile the Chinese authorities did not allow the yuan to fall for a record 11th successive day as earlier it set the fix 0.09% stronger to 6.4753 per dollar.

Xmas shopping – not so great, at least in the UK: ‘Footfall slumped across high streets and shopping centres this weekend as consumers took advantage of retailers offering even later deadlines for Christmas deliveries to shop online rather than venturing out in stores. The traditional stampede of customers on so-called Panic Saturday failed to materialise to the same extent as last year, with footfall down by 4.5%’ (link here). 

Dow theory not looking hot -

(h/t @SoberLook)

Still...there are a lot of deals still around...ah, the benefit of cheap money.  First in Europe as reported in today's Financial Times...

...and then in Asia too –

 (h/t @HaidiLun) 

Later – watch the FTSE-100 again only a little above 6,000 as Brent Front Futures Contract Falls To Lowest Intraday Level Since July 2004 as noted in this graphic from Fast FT:

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