Tag Archives: 5) Global Macro

Are these claims even remotely plausible for a highly contagious virus that spreads easily between humans while carriers show no symptoms? It’s clear that the narrative about the coronavirus is being carefully managed globally to minimize the impact on global sentiment and markets. Authorities are well aware of the global economy’s extreme fragility, and so Job One for authorities everywhere is to scrub the news flow of anything that doesn’t support the implicit...

Risk-off sentiment intensified last week; the dollar continues to climb This is another big data week for the US; the US economy remains strong Fed Chair Powell testifies before the House Tuesday and the Senate Wednesday; the Senate holds confirmation hearings for Fed nominees Shelton and Waller Thursday President Trump will unveil his budget proposal for FY2021 beginning October 1 this Monday Eurozone and UK have heavy data weeks Riksbank meets Wednesday and is...

The number of confirmed coronavirus cases and deaths continue to rise; the dollar continues to climb The January jobs data is the highlight for the week; Canada also reports jobs data The Fed submits its semiannual Monetary Policy Report to Congress today; Mexico and Brazil report January inflation data The downdraft in eurozone industrial data continues; Russia cut rates 25 bp to 6.0% and signaled more easing ahead RBA upbeat but Governor Lowe warns of “significant...

Will we wonder, what were we thinking? and marvel anew at the madness of crowds? When we look back on this moment from the vantage of history, what will we think? Will we think how obvious it was that the coronavirus deaths in China were in the tens of thousands rather than the hundreds claimed by authorities? Will we think how obvious it was that the virus would spread around the globe, wreaking havoc on the global economy and social order, even as the authorities...

China cut tariffs on $75 bln of US imports by half, while the US said it could reciprocate in some way The dollar continues to climb; during the North American session, only minor data will be reported; Brazil cut rates 25 bp Germany reported very weak December factory orders; all is not well in the German state of Thuringia Czech expected to keep rates steady; Philippines cut 25 bp; India remained on hold Australia reported December trade and retail sales The dollar...

The dollar continues to climb; one of side-effects of the virus has been a swelling of the amount of negative yielding debt globally The US primary season got off to a rocky start for the Democrats During the North American session, December factory orders will be reported; the US economy remains strong The UK reported January construction PMI The RBA held rates at 0.75%, as expected; Korea January CPI came in hot at 1.5% y/y The dollar is mixed against the majors as...

If we accept what is known about the virus, then logic, science and probabilities all suggest we brace for impact. Here’s a summary of what is known or credibly estimated about the 2019-nCoV virus as of January 31, 2019: 1. A statistical study from highly credentialed Chinese academics estimates the virus has an RO (R-naught) of slightly over 4, meaning every carrier infects four other people on average. This is very high. Run-of-the-mill flu viruses average about...

EM remains vulnerable to deteriorating risk sentiment as the coronavirus spreads.  China announced a series of measures over the weekend to help support its financial markets, but this may not be enough to turn sentiment around yet.  China markets reopen Monday after the extended Lunar New Year holiday and it won’t be pretty.  AMERICAS Brazil reports January trade Monday.  December IP will be reported Tuesday, which is expected to fall -0.8% y/y vs. -1.7% in...

Dow 30,000 is “unsinkable,” just like the Titanic. A recent Barrons cover celebrating the euphoric inevitability of Dow 30,000 captured the mainstream zeitgeist perfectly: Corporate America is firing on all cylinders, the Federal Reserve’s god-like powers will push stocks higher regardless of any other reality, blah blah blah. While the financial media looked elsewhere for its amusement, the coronavirus epidemic in China just poured fentanyl in the Dow 30,000...

The World Health Organization called an emergency meeting today; the dollar continues to climb The FOMC meeting was a non-event; US advance Q4 GDP will be reported Risk-off sentiment has derailed curve steepening trades Implied rates still suggest that today’s BOE meeting is a coin toss Turkish central bank released its quarterly inflation report; Asian markets got hit hard again with rising virus concerns The dollar is broadly firmer against the majors ahead of the...