Global Macro


Fed warns on Trumpflation

The USD was roughly stable last night: Commodity currencies were mixed: Gold held on: Brent fell back: Base metals too: Big miners were hit: EM stock held gains: US high yield too: The US bond curve flattened: European spreads widened: And stocks held highs: Fed minutes summed up where we’re at pretty well: In discussing


Grantham: ‘Twas capitalism that killed capitalism

From the always essential Jeremy Grantham’s latest note: An extraordinary, large exit poll run by Reuters/Ipsos in which 45,000 people participated took place in the early evening on election day in the US. To say this was a detailed poll is an understatement. The spreadsheet for each question in small print runs the length of


Book review: Between Debt and the Devil by Adair Turner

By David Collyer: Adair Turner became chair of Britain’s Financial Services Authority the day after the global financial crisis struck in 2008. Restoring the solvency of key British-based globally systemically important banks and repairing the damage caused by unsustainable private debt fell largely on his broad shoulders. This is not an easy or lively read.


High housing costs crush Australian millennial’s dreams

By Leith van Onselen Deloitte has released its sixth annual Millennial Survey, which gauges the views of 8,000 professional millennials born after 1982 across 30 countries. The survey paints a depressing picture of millennials in advanced nations, with Australian millennials among the most pessimistic. In particular, economic confidence is low across the developed world, with


US jobs power up

Friday night the USD was stable, all others were were strong: Commodity currencies were firm as well: Gold threatened to go higher: Brent too: But not base metals, which got flogged on Chinese tightening: So did big miners: EM stocks followed oil not China: Same with high yield: US bonds were bought: European spreads widened:


US drags global PMIs on a tear

From Macquarie:  Global manufacturing PMIs began 2017 at their highest level since 2011, data released today shows. The strong readings suggest the global industrial recovery has further to run, underpinning a bullish view on metals demand in early 2017 and beyond, though rising protectionism is a threat.  It is worth focusing on the


US and China playing chicken

Timely reminder from Brad Setser about the unintended consequences of trade spats, using the US tyre tariff/Chinese chicken feet retaliation from 2009. Brad’s posts are often quite technical and dense, so I have taken the liberty of annotating his charts below to tell the story:   The lessons being: there are lots of unintended consequences


Japan: TPP meaningless without US

By Leith van Onselen The Turnbull Government’s hopes of resurrecting the Trans-Pacific Partnership (TPP) trade deal have received another blow, with Japan declaring the pact pointless without US involvement. From The Australian: A Japanese government spokesman called talks on the Trans-Pacific Partnership trade deal “meaningless” without the US, but said his government will keep trying


The biggest risk from technological change is inequality

Cross-posted from The Conversation: Artificial Intelligence (AI), inequality and globalisation were central themes of the World Economic Forum in Davos last week. Fearing that AI will destroy jobs, IBM CEO Ginni Rometty called for a future where jobs are not white collar or blue collar, but “new collar”. While change is coming, these “new collar”


Do-Nothing Malcolm’s TPP farce drags on

By Leith van Onselen Just as President Trump signed an executive order declaring the US will withdraw from the Trans-Pacific Partnership (TPP) trade agreement, Australian Trade Minister Steve Ciobo confirmed that the Turnbull Government would continue to work ‘flat-out’ to revive the TPP deal. From The ABC: “It may come to pass — and certainly


Three theories behind the global productivity slowdown

Cross-posted from The Conversation: There is a wide recognition by economists and policy-makers that “the large differences in income per capita observed across countries mostly reflect differences in labour productivity”. Further, “productivity is expected to be the main driver of economic growth and well-being over the next 50 years, via investment in innovation and knowledge-based