Tuesday, 1 December 2015

Financial Orbit wrap 01/12/15

Five sentences or graphics which sum up the Financial Orbit output over the last 24 hours across the website, twitter account and anything else thought about...

1. Countdown to Draghi – ‘ECB likely has no choice but to increase euro-area stimulus this week’ (link here).

Interesting report and great graphics but “no choice”. Sorry, everyone always has a choice but ECB feels backed into a corner by a lack of structural reform.  I wonder if they will cut the inflation or growth forecasts...

Meanwhile having observed this about global currencies...

Dollar – extreme...and still the key metric to be currently watching for the risk environment in my opinion: 

 (h/t @deadlyfrom80yds)

...kind of interesting to see the euro regain the 1.06s against the US dollar. Surely nothing to do with this?
(more on the PMIs later)

2. Yuan SDR inclusion - Moody's Investors Service says that the inclusion of the renminbi in the International Monetary Fund's (IMF) Special Drawing Rights (SDR) basket will provide a confidence boost for global investors (link here).  

Recall the changes:

The PBoC this morning set the reference rate around which the "onshore" renminbi (CNY) trades weaker by just 0.02 per cent to Rmb6.3973 per dollar. It's the fourth day in a row the fix has been set weaker...so helpful if as per the above the US dollar continues to fade.

3. Manufacturing PMI day...

Asia - China's services sector was a brighter spot, with the non-manufacturing PMI rising 0.3 points to 53.6 in November. Caixin-sponsored preliminary manufacturing PMI was 48.6 in November, versus expectations of 48.3, it was last above 50 in February. Official manufacturing PMI for November came in at 49.6, the fourth consecutive month of contraction.

Note the interesting observation from the Caixin survey however despite all the above: 'overall the economy is still on track to become more stable' 

Meanwhile in Europe I noted this from the French report (only a touch above 50.0):

"sluggish phase as we head towards the end of the year"

Meanwhile in Europe overall:

Markit seem certain: 'scene is set for the to unleash further stimulus at its December meeting to ensure momentum continues to build'

And as for the world overall:

Global manu PMI: 'meaningful improvement'. Hmm. That line looks pretty flat/straight to me & trends hardly super...

4. I see the industrial gases company Linde shares fell sharply as they:

 "blamed revision of its prospects on changes in the macroeconomic climate"

Which, of course, made me think about Air Liquide which fell back below that Euro110 level I found interesting a few weeks ago (link here).  

5. As it is the start of a new month...time for a retrospective on November 

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