Tag Archives: 5) Global Macro

The US Congress has returned from recess with a lot on its plate.  Priority must be given to passing an omnibus spending bill that prevents a government shutdown after December 11. The next round of fiscal stimulus has taken on greater urgency and may be attached to the wider spending bill. RECENT DEVELOPMENTS The Senate returned from recess Monday and the House returns today. Much of the work ahead will be done behind the scenes as lawmakers negotiate passage of an...

There are new efforts to pass another round of stimulus sooner rather than later; we warn against getting too optimistic; US bond yields rose in anticipation of stimulus; Fed Chair Powell and Treasury Secretary Mnuchin gave somewhat conflicting outlooks for the US The Fed releases its Beige Book report for the December FOMC meeting; ADP releases its private sector jobs estimate, with consensus at 430k; Brazil outperformed yesterday on positive fiscal comments from...

Stimulus talks continue but the goalposts have indeed been moved; the good news is that a package before year-end is looking more likely; optimism regarding stimulus continues to buoy US yields ISM services PMI is expected at 55.8 vs. 56.6 in October; weekly jobless claims data will be reported; Fed Beige Book report was suitably downbeat The noise level around Brexit continues to rise are we approach the finish line; eurozone and UK data came in firmer than...

One sure way to identify a system “optimized for failure” is if all the insiders are absolutely confident the system is “optimized for my success”. I often discuss optimization here because it offers an insightful window into how systems become fragile and break down. When we optimize something, we’re aiming to get the most bang for our buck: maximize our efficiency, profit, productivity, etc., while minimizing our costs. To maximize our goal, whatever it is–profits,...

Our overweening faith and confidence in our wealth and power make this a dimly lit Thanksgiving. A public expression of gratitude by victorious sports stars, lottery winners, etc. is now the convention in America: coaches, teammates, family and mentors (or agents) are recognized as an expression of the winners’ humility and gratitude for everyone that contributed to the success. As sincere as each individual’s gratitude may be, there’s something forced and phony...

Sentiment is being buoyed by two incrementally positive stories; cross-markets implied volatility measures continue to trend lower; dollar weakness has resumed President-elect Biden will reportedly officially name his first cabinet picks today; Fed manufacturing surveys for November will continue to roll out; Brazil and Mexico both reports mid-November inflation readings German IFO Business Climate survey for November was mixed; UK national lockdown will end next...

Covid vaccine results from AstraZeneca and Oxford University brought another wave of optimism; dollar weakness has resumed; that said, we will refrain from making any longer-term calls for the demise of the dollar Reports suggest President-elect Biden is pushing House Democrats to reduce the size of their fiscal package demands to unlock negotiations; Republicans have an interest in compromising President-elect Biden has reportedly picked his diplomatic team; it’s a...

The reality is the roulette wheel is rigged and only chumps believe it’s a fair game.It’s easy to lay America’s visible frustrations at the feet of Covid lockdowns or political polarization, but this conveniently ignores the real driver: systemic unfairness. The status quo has been increasingly rigged to benefit insiders and elites as the powers of central banks and governments have picked the winners (cronies, insiders, cartels and monopolies) and shifted the losses...

What we need is not a return to the corrupt, tottering kleptocracy of 2019, but a re-democratization of capital, agency and money. I’m hopeful about 2021, and no, it’s not because of the vaccines or the end of lockdowns or anything related to Covid. The status quo is cheering the fantasy that we’ll soon return to the debt-soaked glory days of 2019 when everything was peachy. The problem with this “brand” of magical thinking is that stripped of self-serving PR, the...

Most EM currencies were up last week, once again taking advantage of broad dollar weakness. In addition, EM equities also performed well, with MSCI EM up for the third week in a row and for seven of the past eight. We expect EM assets to continue benefiting from the global liquidity story as well as the weak dollar trend. AMERICAS Brazil reports mid-November IPCA inflation Tuesday. Inflation is expected at 4.15% y/y vs. 3.52% in mid-October. If so, this would be the...