Tuesday , September 17 2019
Home / Tag Archives: 5) Global Macro

Tag Archives: 5) Global Macro

Where The Global Squeeze Is Unmasked

Trade between Asia and Europe has dimmed considerably. We know that from the fact Germany and China are the two countries out of the majors struggling the most right now. As a consequence of the slowing, shipping companies have had to make adjustments to their fleet schedules over and above normal seasonal variances. It was reported last week that Maersk and MPC would “temporarily suspend” their sailings on one of the biggest routes between Europe and Asia. Weakening...

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Dollar Mixed, Oil Spikes as Markets Digest Saudi Attack

The weekend bombing of Saudi oil facilities continue to reverberate across global markets The currencies of the oil producing nations are likely to outperform near-term US rates continue to adjust ahead of the FOMC UK Prime Minister Johnson is in Luxembourg today to meet with EC President Juncker China reported weak August IP and retail sales . The dollar is mixed against the majors as markets continue to digest the attack on Saudi oil facilities.  Yen and Loonie are...

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The Black Swan Is a Drone

What was “possible” yesterday is now a low-cost proven capability, and the consequences are far from predictable. Predictably, the mainstream media is serving up heaping portions of reassurances that the drone attacks on Saudi oil facilities are no big deal and full production will resume shortly. The obvious goal is to placate global markets fearful of an energy disruption that could tip a precarious global economy into recession. The real impact isn’t on...

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What a Relief that the U.S. and Global Economies Are Booming

Doing more of what’s failed for ten years will finally fail spectacularly.. It was a huge relief to see the charts of the Baltic Dry Index (BDI) and the U.S. retail sector ETF (RTH): both have soared to the moon, signaling that both the U.S. and global economies are booming: the BDI is widely regarded as a proxy for global shipping, which is a proxy for global trade and economic activity. Batic Dry Index, 2018-2019 - Click to enlarge Amazon is 18% of the RTH...

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Dollar Soft as Risk Sentiment Stoked Ahead of US Retail Sales

US-China relations appear to be thawing Trading was volatile after the ECB decision; we are still dollar bulls EM has benefitted from the shift in the global backdrop this week The US data highlight is August retail sales Vietnam cut rates 25 bp to 6.0%; Turkey reported July current account and IP The dollar is mostly softer against the majors ahead of the US retail sales data. Sterling and Swissie are outperforming, while Kiwi and Loonie are underperforming. EM...

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The Inevitable Bursting of Our Bubble Economy

All of America’s bubbles will pop, and sooner rather than later. Financial bubbles manifest three dynamics: the one we’re most familiar with is human greed, the desire to exploit a windfall and catch a work-free ride to riches. The second dynamic gets much less attention: financial manias arise when there is no other more productive, profitable use for capital, and these periods occur when there is an abundance of credit available to inflate the bubbles. Humans...

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Your Unofficial Europe QE Preview

The thing about R* is mostly that it doesn’t really make much sense when you stop and think about it; which you aren’t meant to do. It is a reaction to unanticipated reality, a world that has turned out very differently than it “should” have. Central bankers are our best and brightest, allegedly, they certainly feel that way about themselves, yet the evidence is clearly lacking. When Ben Bernanke wrote for the Washington Post in November 2010 announcing somehow the...

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Turkey Monetary Policy Planting Seeds of Future Crisis

Turkey central bank meets September 12 and is expected to cut rates 275 bp.  With Erdogan talking about single digit rates and inflation, it’s clear that rates are headed significantly lower.  At some point soon, we think the risk/reward for investing in Turkey will send investors fleeing for the exits.POLITICAL OUTLOOK President Erdogan sacked central bank Governor Murat Cetinkaya on July 6, ostensibly for not cutting rates quickly enough.  In early August, several...

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The Obligatory Europe QE Review

If Mario Draghi wanted to wow them, this wasn’t it. Maybe he couldn’t, handcuffed already by what seems to have been significant dissent in the ranks. And not just the Germans this time. Widespread dissatisfaction with what is now an idea whose time may have finally arrived. There really isn’t anything to this QE business. But we already knew that. American officials knew it in June 2003 when the FOMC got together to savage the Bank of Japan for their lack of...

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Dollar (In) Demand

The last time was bad, no getting around it. From the end of 2014 until the first months of 2016, the Chinese economy was in a perilous state. Dramatic weakness had emerged which had seemed impossible to reconcile with conventions about the country. Committed to growth over everything, and I mean everything, China was the one country the world thought it could count on for being immune to the widespread economic sickness. That’s why in early 2016 authorities...

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