Thursday, 31 December 2015

A few macro thoughts today

Last day of 2015...a few final macro thoughts for this year.

Portugal  - following the losses for certain Novo Banco bond holders, institutional investors caught out complaining about the change of rules and talking about class actions.  Leads the way to the realities of 2016 in my view: going to get harder not easier for bond holders

UK bank culture – FT reports that the FCA have abandoned its assessment of culture at retail and wholesale banks in the UK.  Seems as if it is a quid pro quo for tougher financial requirements and disclosures plus forced new competition. 

UK storms - The UK economy could be dented by as much as £3bn by damage from Storms Eva, Desmond and Frank. PwC said economic. losses from the storms Desmond and Eva will be beween £1.6bn and £2.3bn, while insured losses will hit £900m-£1.2bn.  Also chat that the weather could take as much as 0.25% points off GDP growth.  Terrible for all involved...

Asia – generally a quiet session although the People's Bank of China set its official yuan mid-point rate at 6.4936 per dollar prior to the market open on Thursday, its weakest level since May 2011 and 0.1 percent weaker than the previous fix of 6.4895 even though they ‘fired a warning shot against yuan speculators with bank bans’ as per the link here

Talking about interesting links I was struck by this one - and this accompanying chart:

Bond to equity switch?  Fear?  Something else?  Kind of feel from a 2016 perspective if the institutions are selling...there are opportunities. 

Finally I noted on Twitter:

Nice EM FX (almost) FY15 performance table

(h/t @Geetu_moza)

Yes huge pessimism re Brazil/Latam as I noted in my citing of the Economist front page in yesterday's Wrap (see the tab above).  

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