Category Archive: 5) Global Macro

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Emerging Markets: Preview of the Week Ahead

2017-05-22

EM FX ended last week on a firm note, shrugging off political risk that consumed markets earlier in the week. With US rates remaining low, the dollar remains under pressure against the majors, and so EM FX is likely to benefit also. Yet we warn investors not to jump back into EM countries that are inherently riskier, such as Brazil, South Africa, and Turkey. We continue to favor Asia in the current environment.

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Trying To Reconcile Accounts; China

2017-05-21

by Jeffrey P. Snider

2017-05-21

China Fixed Asset Investment, April 2013 - April 2017

Chinese economic data for April 2017 has been uniformly disappointing. External trade numbers resembled too much commodity prices, leaving an emphasis on them rather than actual economic forces. The latest figures for the Big 3, Industrial Production, Retail Sales, and Fixed Asset Investment, unfortunately also remained true to the pattern.

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Emerging Markets: What Has Changed

2017-05-20

by Win Thin

2017-05-20

China’s government approved the creation of a bond link between Hong Kong and the mainland. S&P upgraded Indonesia one notch to investment grade BBB- with stable. Fitch revised the outlook on Vietnam’s BB- rating from stable to positive. Egypt will announce a package of social spending soon. Moody's changed the outlook on Poland's A2 rating from negative to stable.

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Reasonable Retail (Therefore Consumer) Expectations

2017-05-20

by Jeffrey P. Snider

2017-05-20

Transitory Retail Sales, January 2013 - May 2017

Retail sales estimates are not adjusted for inflation, but even so whenever they get down toward the 3% growth level you can be sure there is serious economic trouble. The 6-month average for overall retail sales dropped below 3% in March 2001, the month that marked the start of the official dot-com recession (though that is not the official name for the cyclical peak, it probably should be).

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Hopefully Not Another Three Years

2017-05-19

by Jeffrey P. Snider

2017-05-19

The stock market has its earnings season, the regular quarterly reports of all the companies that have publicly traded stocks. In economic accounts, there is something similar though it only happens once a year. It is benchmark revision season, and it has been brought to a few important accounts already. Given that this is a backward looking exercise, that this season is likely to produce more downward revisions shouldn’t be surprising.

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China Inflation Now, Too

2017-05-18

by Jeffrey P. Snider

2017-05-18

China Producer Price Index, April 2007 - May 2017

We can add China to the list of locations where the near euphoria about inflation rates is rapidly falling apart. This is an important blow, as the Chinese economy has been counted on to lead the world out of this slump if through nothing other than its own sheer recklessness. “Stimulus” was all the rage one year ago, and for a time it seemed to be producing all the right effects. This was “reflation”, after all.

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A potential cure for HIV | The Economist

2017-05-18

by The Economist

Scientists have developed a therapeutic vaccine for HIV which has the potential to create a functional cure for the disease. Here’s how it works. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Have doctors found a cure for HIV? Since 1981 the AIDS epidemic has killed around 35 million people. Up until now …

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President Trump trips up

2017-05-17

by The Economist

President Trump is about to embark on his first foreign trip. Our cartoonist KAL gives his take on how he’s been preparing for it. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Daily Watch: mind-stretching short films throughout the working week. For more from Economist Films visit: http://films.economist.com/ Check out The Economist’s full …

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Lackluster Trade, China April Edition

2017-05-17

by Jeffrey P. Snider

2017-05-17

China’s trade statistics for April 2017 uniformly disappointed. They only did so, however, because expectations are being calibrated as if the current economy is actually different. It is instead merely swinging between bouts of contraction and low-grade growth, but so low-grade it really doesn’t qualify as growth.

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Charles Hugh Smith On How Financial Repression Is Affecting Millennial Generation Values

2017-05-17

by Charles Hugh Smith

Today’s topic is the millennial generation and how financial repression has resulted in asset bubbles that ultimately have affected the millennials in terms of their values and how they view the economy and life. As well as what they’re facing in terms of the housing market and the job situation. Click here for the full …

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How to win a bid to host the Olympics

2017-05-16

by The Economist

Tessa Jowell brought the idea of London hosting the Olympic games to the table. She shares with us her tips on how to win the race to stage the greatest show on earth. Click here to subscribe to The Economist on YouTube: http://econ.st/2zF0LIE On the 16th May the International Olympic Committee’s evaluation group will visit …

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Inflation Is Oil, But Inflation Is Much More Than Consumer Prices

2017-05-16

by Jeffrey P. Snider

2017-05-16

CPI Changes On Energy, January 2016 - May 2017

The average annual change in the WTI benchmark price was in April about 25%. That was still a sizable increase year-over-year, and just marginally less than March’s average of 33%. For calculated inflation rates, it represents the last of the base effects that have to this point made it appear as if economic improvement was possibly serious.

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The CEO of Lloyd’s of London discusses how to run a successful business through diverse thought

2017-05-16

by The Economist

Dame Inga Beale is the first openly bisexual chief executive of Lloyd’s of London. She’s a champion of diversity in the boardroom because it can help companies connect to a wider market and bring greater financial returns Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Industry leaders like Inga Beale have acknowledged the …

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Earnings Update – The Proof of the Pudding is in the Eating

2017-05-16

by Margarita Fernandez

2017-05-16

S&P 500 Q117 Earnings Growth Rate, December 2016 - May 2017

The first quarter just seemed to zoom by this year, bringing continued optimism (or, animal spirits if you prefer) to the stock market and leaving even higher valuations in its wake. The Standard & Poor’s 500 Index returned an impressive 6.07% for the quarter, on the tail of the previous five consecutive quarters of positive performance.

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Charles Hugh Smith: Millennials Will Change The Economy Forever

2017-05-15

by Charles Hugh Smith

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Emerging Market Preview: Week Ahead

2017-05-15

by Win Thin

2017-05-15

EM FX ended last week on a firmer note, helped by lower US rates and softer than expected CPI and retail sales data. Stabilizing commodity prices also helped EM. Yet these supportive conditions seem unlikely to persist, and we remain defensive on EM.

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Lackluster Trade

2017-05-14

by Jeffrey P. Snider

2017-05-14

US imports rose 9% year-over-year (NSA) in March 2017, after being flat in February and up 12% in January. For the quarter overall, imports rose 7.3%, a rate that is slightly more than the 2013-14 comparison. The difference, however, is simply the price of oil.

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Emerging Markets: What Has Changed

2017-05-13

by Win Thin

2017-05-13

Moon Jae-in was elected president of South Korea. Philippine President Duterte named Nestor Espenilla as central bank governor. Nigerian President Buhari traveled to London for a follow-up to the initial medical visit earlier this year. Market expectations for 2018 inflation in Brazil rose for the first time in more than a year. Peru's central bank unexpectedly started the easing cycle with a 25 bp cut to 4.0%.

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The Wrong People Have An Innate Tendency To Stand Out

2017-05-12

by Jeffrey P. Snider

2017-05-12

Japan Government Bond Yields, January 1985 - May 2017

I don’t think Milton Friedman would have made much of chess player. For all I know he might have been a grand master or something close to that rank, but as much as his work is admirable it invites too the whole range of opposite emotion. He was the champion libertarian of the free market who rescued economics from the ravages of New Deal socialism, but in doing so he simply created the avenue for where Economics of that kind could be transposed...

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Noose Or Ratchet

2017-05-11

by Jeffrey P. Snider

2017-05-11

Quarterly Report On Bank Derivative Activities, April 1995 - April 2016

losing the book on Q4 2016 balance sheet capacity is to review essentially forex volumes. The eurodollar system over the last ten years has turned far more in this direction in addition to it becoming more Asian/Japanese. In fact, the two really go hand in hand given the native situation of Japanese banks.

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