A few overnight (GMT) macro views and thoughts...
FX – dollar trade weighted (DXY) goes to 100…
…so a ‘$9trn stress test’ for the emerging markets (link here)
(I personally am not so pessimistic about the EMs and hence I would perceive the emerging markets are are probably pleased to see this)
Euro – moved below 1.05 briefly overnight against the
US dollar, lowest since 2003. ECB may be pleased with the move but almost
unprecedentedly rapid /putting pressure on the global system as I have been detailing over recent week...
(h/t @bespokeinvest)
Greece – pressure building: ‘the general government
primary budget surplus posted a remarkable drop in January compared to the same
month last year…general government primary surplus amounted to just 419 million
euros in January, against 1.8 billion a year earlier, putting extra pressure on
the Finance Ministry’. So they are looking to tap alternative sources of
capital: Tsipras still claiming Athens owed Euro160bn in compensation from WW2…hmm. Still need a deal/haircut here.
Ukraine - IMF's executive board has approved a new $17.5bn
bailout for Ukraine. Also highlighting ‘exceptional risks’. Exceptional risk of unfortunately not getting the money back too. Unfortunately what do you do? Ukraine/Russia still underestimated as an issue...
China - "The PBOC is the Bundesbank of EM… It is
conservative and does not have the mindset of the Fed”. Maybe not but I
still reckon they cut rates progressively as this year goes on…at the very
least to respond to US$ strength noted above. Interesting link nevertheless.
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