Friday, 4 December 2015

A few macro thoughts today...

A few macro thoughts today...

Europe and the markets – so after the ECB decision (which I discussed as length here)…Bild report that ECB's Weidmann was unhappy with ECB decision and that it was taken without the backing of 5 officials. Meanwhile impact pretty clear: Thursday's 3.9% fall was 3rd biggest daily fall seen in DAX futures so far in 2015 (and was biggest drop since 24 August 2015) and the 3.1% in EUR/USD was 4th biggest gain in history of Euro, and was rally biggest since 19 March 2009 (day Fed announced QE) (both stats via Predicted Markets). On the latter point the volatility of the euro-dollar apparent here:


(h/t @sobata416)

I disagree with it (for the reasons given above) but I had to smile at @cityAM's graphic: Draghi as the Christmas Grinch!!



Of course Europe not that bad anymore, a point made by @Callum_thomas in this chart he cited:


 Still some people still v worried re the value of the euro.  I don't think I have seen as low an estimate as this one...in my view highly, highly unlikely to happen given the huge pressure it would put on the global economy:  


Europe diplomacy – ‘David Cameron has given up hope of a new membership deal for Britain at this month’s EU summit after European allies reacted with alarm to him stepping up demands for treaty changes to ban benefits for new migrant workers’ (FT).  Focus now on doing a deal in the Spring and opening up scope for a Brexit stay/go referendum in H2 16 or early ‘17

And in linked news with the above...Denmark rejection - with almost all votes counted, 53% of Danes had voted no on Thursday to changing an opt-out on EU justice and home affairs policies for an opt-in giving a boost to the anti-EU, anti-immigration Danish People's party who had come second in June's elections. ‘Yes’ campaigners said that migrant crisis and Paris terror incident had an impact

Global M&A – new highs...of course it may be nothing more than just cheap money and the need for sources of cost cuts...


Emerging markets – watch the money supply growth!  Actually that's bullish for a current out-of-favour part of the market...I would certainly keep up my weightings. 



A couple of interesting US charts.  Ever-more neutral sentiment as per Bespoke Invest...


...and services - by far-and-away the biggest part of the US economy - is doing ok. Put these two US charts together and stock picking scope into 2016 remains.  


Later – US NFP jobs data and OPEC meeting are scheduled later.  On the latter I note the headline ‘OPEC Internal Report Warns Oil Prices To Remain Depressed – WSJ’.


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