Category Archive: 5) Global Macro

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Emerging Markets: Preview of the Week Ahead

2017-04-17

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2017-04-17

EM FX was mostly firmer last week, helped by Trump comments and softer US data. Whilst this seems positive for EM, the global backdrop remains uncertain. Some in EM (Russia, Turkey, and Korea) remain vulnerable to geopolitical concerns. In addition, idiosyncratic domestic political risks remain in play for other EM countries, such as Brazil, South Africa, and Turkey. We expect the investment climate for EM to remain challenging this week.

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What Was Chinese Trade in March?

2017-04-17

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2017-04-17

China Exports, Jan 2008 - 2017
As with all statistics, there are discrepancies that from time to time may obscure the meaning or validity of the particular estimate in question. For the vast majority of the time, any such uncertainties amount to very little. Overall, harmony among the major accounts reduces the signal noise from any one featuring a significant inconsistency.

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Emerging Markets: What has Changed

2017-04-17

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2017-04-17

Malaysia’s central bank said it will allow investors to fully hedge their currency exposure. Egypt declared a 3-month state of emergency after two deadly church attacks. South Africa’s parliamentary no confidence vote has been delayed. Argentina central bank surprised markets with a 150 bp hike to 26.25%. Brazil central bank accelerated the easing cycle with a 100 bp cut in the Selic rate.

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Charles Hugh Smith On The Commercial Real Estate Bubble Caused By Financial Repression

2017-04-16

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Click here for the full transcript with slides: http://financialrepressionauthority.com/2017/04/16/the-roundtable-insight-charles-hugh-smith-on-the-commercial-real-estate-bubble-caused-by-financial-repression/

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Earnings per Share: Is It Other Than Madness?

2017-04-16

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2017-04-16

S&P 500 Earnings Per Share 2014-2018
As earnings season begins for Q1 2017 reports, there isn’t much change in analysts’ estimates for S&P 500 companies for that quarter. The latest figures from S&P shows expected earnings (as reported) of $26.70 in Q1, as compared to $26.87 two weeks ago. That is down only $1 from October, which is actually pretty steady particularly when compared to Q4 2016 estimates that over the same time plummeted from $29.04 to $24.16. At $26.70, that would...

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Charles Hugh Smith–Wither The Suburb? #3536

2017-04-16

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While much has been written about the massive retail decline in America, Charles sheds interesting light upon another core cause of the retail apocalypse. Namely, Millennials, due to staggering student loan debt, have lowered expectations and are staying close to urban downtowns. They have smaller homes, less need for expensive furnishings and have often shed …

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Optimal Lunacy

2017-04-15

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2017-04-15

Federal Funds Rate 2010-2018
In June 2012, Janet Yellen, then the Vice Chairman of the Federal Reserve, addressed an audience in Boston with what for the time seemed like a radical departure. It was the latest in a string of them, for conditions throughout the “recovery” period never did quite seem to hit the recovery stride. Because of that, there was constant stream of trial balloons suggesting how the Federal Reserve might try to overcome this economic inertia. At that...

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Millennials Are Abandoning the Postwar Engines of Growth: Suburbs and Autos

2017-04-14

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2017-04-14

U.S. Retail Stores 2000-2017
Where's the growth going to come from as the dominant generation makes less, borrows less, spends less, saves more and turns away from long commutes, malls and suburban living and abandons the worship of private vehicles?

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Tim Berners-Lee explains what it will take to make the internet more accessible | The Economist

2017-04-13

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The internet is inaccessible to 60% of the world’s population. Tim Berners-Lee, the web’s inventor, has decided to change this. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 60% of the world’s people are still not connected to the internet. The majority of these are women and people living in poverty. In July …

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Who’s Playing The Long Game–and What’s Their Game Plan?

2017-04-13

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2017-04-13

S-curve of Rapid Expansion
When we speak of The Long Game, we speak of national/alliance policies that continue on regardless of what political party or individual is in office. The Long Game is always about the basics of national survival: control of and access to resources, and jockeying to diminish the power and influence of potential adversaries while strengthening one's own power and influence.

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The Global Burden

2017-04-12

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2017-04-12

Germany 2-year Bund Yield 2009-2017
Bundesrepublik Deutscheland Finanzagentur GmbH (German Finance Agency) was created on September 19, 2000, in order to manage the German government’s short run liquidity needs. GFA took over the task after three separate agencies (Federal Ministry of Finance, Federal Securities Administration, and Deutsche Bundesbank) had previously shared responsibility for it.

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Bi-Weekly Economic Review

2017-04-11

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2017-04-11

It is hard not to notice that the chart above has a lot less red in it than it has in some time. That is true of the month to month data as well as the year over year changes. There has been a widely reported gap between so called soft data – surveys and polls – and the hard data – actual economic activity reports. Bulls say the gap is there because the soft data always leads the hard data.

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It Was And Still Is The Wrong Horse To Bet

2017-04-11

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2017-04-11

Payrolls Establishment Survey 2010-2017
The payroll report disappointed again, though it was deficient in ways other than are commonly described. The monthly change is never a solid indication, good or bad, as the BLS’ statistical processes can only get it down to a 90% confidence interval, and a wide one at that. It means that any particular month by itself specifies very little, except under certain circumstances.

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Why China has become the world leader in renewable energy

2017-04-11

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China is the world’s largest emitter of greenhouse gases, using fossil fuels to drive rapid industrialisation. So why is it now investing billions of dollars in green technology? Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 China is the world’s largest emitter of greenhouse gases. Its water, air and soil are heavily polluted. …

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Emerging Markets Preview for the Week Ahead

2017-04-10

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2017-04-10

EM FX ended the week on a soft note, as the weaker than expected US jobs data was unable to derail the dollar’s rally. For the week, the worst performers were ZAR (-3%), TRY (-2.5%), and RUB (-2%). CZK bucked the trend, rising after the CNB exited the cap. This week, higher inflation readings in the US could draw market focus back to Fed tightening, which would be negative for EM.

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US Jobs: Who Carries The Burden of Proof?

2017-04-09

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2017-04-09

Belly of the Curve Gone Flat 2009-2017
The idea that interest rates have nowhere to go but up is very much like saying the bond market has it all wrong. That is one reason why the rhetoric has been ratcheted that much higher of late, particularly since the Fed “raised rates” for a third time in March. Such “hawkishness” by convention should not go so unnoticed, and yet yields and curves are once more paying little attention to Janet Yellen.

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Emerging Markets: What has Changed

2017-04-08

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2017-04-08

Reserve Bank of India surprised markets with the start of the tightening cycle. The Czech National Bank (CNB) ended the EUR/CZK floor. Israeli central bank said it won’t hike rates until Q2 2018. Both S&P and Fitch cut South Africa’s rating one notch to sub-investment grade BB+. Moody's put South Africa’s Baa2 rating on review for a downgrade.

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Ultra-Loose Terminology, Not Policy

2017-04-08

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2017-04-08

Return of Lending in Europe 2007-2017
As world “leaders” gathered in Davos in January 2016, they did so among financial turmoil that was creating more economic havoc than at any time since the Great “Recession.” Having seen especially US QE as the equivalent of money printing, their focus was drawn elsewhere to at least attempt an explanation for the contradiction.

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We Need To Define The ‘Shadows’, And All Parts of Them; or, ‘Rising Dollar’ Kills Another Recovery Narrative

2017-04-07

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2017-04-07

Total Credit Market Instruments
JP Morgan’s CEO Jamie Dimon caused a stir yesterday with his 45-page annual letter to shareholders. The phrase that gained him so much widespread attention was, “there is something wrong with the US.” Dimon mentioned secular stagnation and correctly surmised it was the right idea if for the wrong reasons. He then gave his own which included a litany of globalist agenda items, including not enough access to mortgages.

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Life on the frontline of Ukraine’s war | The Economist

2017-04-07

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War has raged in eastern Ukraine for the past three years between Ukraine’s army and Russian-backed separatists. Two residents discuss how they live their lives under a constant fear of shelling and whether they see an end in sight to fighting. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Since 2014, Russian-backed rebels …

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