Tuesday, 8 December 2015

A few macro thoughts today

A few macro thoughts today...

European diplomacy/migrant crisis – Donald Tusk writes a letter to EU leaders saying ‘good progress’ on UK demand and he hopes for a deal at a summit in February.  Meanwhile the German authorities have confirmed that 965k refugees have entered the country this year topping 800k figure last year. Half this year are Syrian, following by people from Afghanistan (13%) and Iraq (10%).  No easy solutions here...debate to continue on into next year.  

Black Friday - UK BRC Sales Like-For-Like (YoY) Nov: -0.4% (exp 0.5% prev -0.2%).  Why?  Increasing online shift influential. Out of the 12 product categories covered by the index, furniture and home accessories were the only two to report growth, the BRC and KPMG said. Smells like a continuing structural shift away from the high street to me.  

Ahead of the French regional election second round – Euro regime is working like a charm for France's Marine Le Pen (link here). I note however that indicative round two polling shows the FN going from 1st to 3rd…we’ll see next weekend


Liked this chart too from the above link...just strikes me again about the need for structural reform (in France and other European countries). 



Asia – Japan no longer in technical recession as per rehashed Q3 economic statistics, meanwhile Chinese trade data weak...


(h/t @Callum_Thomas)

...and the offshore yuan lowest close for 4 years. 



Going into 2016 strategy thoughts worry levels about region rising (link here). Probably too much worry but a fade in the US dollar probably helps out a lot tactically even if structural issues such as demographics are harder to counter. 



Key for Chinese market…focus on weak yuan beneficiaries and new economy stocks


(h/t @eurofaultlines)

I liked this from Zero Hedge: China has 9 days to unleash another EM market crisis and delay the Fed hike.

At least China’s reserves are high!


Talking about commodities – hatred of the space, everyone kicking themselves they were not mega long Nasdaq (technology) stocks...




...but as shown by this piece on Gold sentiment – nice chart, worthwhile remembering!  The darkest hour is always before the dawn!  I still see commodity-facing opportunities into 2016. 


And what happened after this earlier period in the oil market?  Ah yes, a big price rise!


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