Deus Forex Machina

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Macro Morning: Europe erupts

Policy uncertainty and protestors in the streets dominated markets overnight as the protests across Europe and enduring European punch up over the implementation of OMT weighed heavily. Stocks were off sharply once again and gold and oil both fell as well. The joint statement put out by Germany, Finland and the Netherlands that the bailout

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Macro Morning: King dollar

Not a great night if you are in the bullish camp with the Dow falling 100 points along with weakness in the euro,  The Australian dollar, crude oil and gold. As you know my underlying fundamental bias is that the economy of the global is structurally weak and will lack sufficient demand for years yet

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Macro Morning: Fade

More consolidation or back sliding markets overnight – depending on your point of view – as the reality of the data continues to undermine the hope of QE. Germany was the focus last night and the IFO survey sliding again, dropping a full point and it now sits at its lowest level since early 2010. Equally

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Macro Morning: Spanish rally fades

For the first time in ages we had a quiet end to the week without the usual data, corporate announcements or other fractious goings on. Wall Street had been going well after an FT article about Spain but a late day sell off suggested it was just a little bit of day traders having some

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Macro Morning: Uncooperative economies

Data, data, data – weak, weak, weak. Central Banks are trying to goose stock markets higher but the darn global economy just wont co-operate. Yesterday we had the HSBC flash PMI for China which was again in the contraction zone. And then overnight we saw weaker still data out of Europe, which DE covers here.

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Macro Morning: Currency war

Stocks reversed yesterday’s disquiet and rallied overnight after the Bank of Japan (BoJ) set up a nice rally in Asian trade by joining the free money party with the Fed. The BOJ’s action in increasing its bond buying program by another ¥10 trillion to ¥80 trillion on the back of its assessment of a further weakening in

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Macro Morning: Selling the fact

Stock markets drifted lower in Europe, were largely unchanged in the US, the CRB lost almost another 1% as the US dollar’s recovery continued over night as markets focus on what is in front of them now. Starting in Europe there appear to be growing concerns about what Spain is up to and when and/or

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Macro Morning: Red Sea!

What a difference a day makes. The sea of red across global stock markets overnight while not entirely unexpected after last week’s euphoria might have disappointed many. But it was the Feast of Rosh Hashanah when a numbers of traders and investors take some time off. I was reading a post by Jeffrey Hirsch of

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Macro Morning: Stocks in heaven

The Dow and S&P 500 climbed to 5 year highs on Friday night while the NASDAQ is up in a stratosphere not seen in more than a decade as the Fed’s plan for an open ended QE3 program gets traction in asset markets. Key here for stocks is that the the Fed is telling stock

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Weekend Links 15th September

Global Macro: Fidelity reckons you need 8 times final income for retirement – better get your Macro Investor subscription quick Roubini – Fiddling at the fire. Pro Syn Soc Gen’s Albert Edwards tees off on market complacency about China – BI Bernanke and Draghi add fuel to gold fire – Forbes But the Wall Street

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Macro Morning – QEnfinity!

Stocks rallied, the US dollar fell lifting the euro, Australian dollar and others while gold, crude and copper all rose as well. The catalyst of course was the FOMC (Federal Reserve Open Market Committee) announcement which is clearly a victory both for Ben Bernanke and for the global economy. The key thing you need to

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Macro Morning

The German constitutional court ratified the ESM rescue mechanism over night pushing one more obstacle out of the way to the continued renaissance of European action to deal with its crisis. The court did limit the amount that Germany can provide without a further vote in the Bundestag (€190 bln) but  this was of little

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Macro Morning: Risk roars

The Dow Jones Industrial Average finished at its highest level in around 5 years overnight as hopes that the Fed will deliver QE3 outweighed the threat by Moody’s to take away the US’s AAA rating. Europe had a better day in the lead up to the US market open as hopes rose again about the

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Macro Morning: Take a breather

That was quick. The euphoria of last week gave way to a more introspective trade overnight as the data in China highlighted the weak global backdrop and markets focussed on the up coming Dutch elections and German Constitutional Court this week. I want to deal with the Chinese data from yesterday first because although I

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Macro Morning: Risk awwwn

US Non-farm payrolls disappointed on Friday adding only 96,000 jobs against expectations above 120,000 but the markets were in far too ebullient mood to let this disappointment rattle. The fall in the unemployment rate might have helped and the rising expectation that this was the final shove for QE3 helped also. Either way it was

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Weekend Links – September 8

Global Macro: Xstrata to fight Glencore’s new bid – Telegraph UK and a slightly cynical look at who else might win from the new bid, Bloomberg If I didn’t have to spread sheet I don’t think I’d have a PC or laptop anymore. Intel uts sales outlook on weak PC demand – Reuters Macro Morning will

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Macro Morning: Markets roar

Draghi delivered on his plan to address the debt crisis overnight which in and of itself is newsworthy given all the false steps and miss starts we have seen over the past year. Stocks, the Euro and the  Australian dollar rallied strongly on the news. The plan, now known as “Outright Market Transactions – OMT”,

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Macro Morning: Failed German bond auction!

More leaks out of the Europe have laid out what is at the table at tonight’s ECB meeting. There will be no caps on peripheral bond yields, no more monetary stimulus but the ECB is planning to butt short end bonds in unlimited amounts. These purchases will then be sterilised by withdrawing stimulus elsewhere which

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Macro Morning: More weak manufacturing data

I thought that the market, stocks that is, might rally as we head toward Mario Draghi’s important announcemenon Thursday but the data just won’t co-operate. Markets were under intense pressure. Before we look at the data a couple of things worth noting are that it seems to me that Draghi is going to cheat and

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Macro Morning: More hope

Yesterday the Chinese HSBC PMI printed at 47.6 which is the worst outcome since March 2009 and backed up earlier flash estimates and the official Chinese PMI released over the weekend which was at a 9 month low. While the PMI is not the whole of the Chinese economy this is just another indication that

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Macro Morning: Out of the doldrums

This week marks the end of the northern hemisphere’s summer holiday’s. While the US is out tonight for the Labor Day holiday it is onwards and upwards from now on as markets get back to something like normal volumes and bums on seats. It’s one of the reasons September is often a fraught month. Looking

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Weekend Links – September 1

Global Macro: No QE without a crash – ZeroHedge 3 Bankers guilty of Muni bond rigging – this industry really lost its moral compass. Reuters Stocks confound the bears seeing summer drop – Bloomberg Jackson Hole: Full Text of Bernanke’s speech – here QE3 on table but it might not work – WSJ Blog Gavyn

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Macro Investor: Australia at a tipping point?

Tipping Point: The prevalence of a social phenomenon sufficient to set in motion a process of rapid change; the moment when such a change begins to occur. – Oxford English Dictionary As Malcolm Gladwell says in his book, when the tipping point is reached little things can make a big difference. While Gladwell was largely writing

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Macro Morning: Australian Dollar slide

What a volatile and nervous bunch traders and fund managers are. One day we read they are buying because of central banker “puts”, the next markets are down for the same reason. I’m in the camp that says Bernanke will promise to do what needs to be done but that he can’t, or won’t deliver

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Macro Morning: Aussie dollar lag

Stocks in the US rose marginally overnight on the lightest volume of the year. The S&P 500 was up 0.08% to 1410, the Dow rose 0.03% and the NASDAQ was up 0.13%. On the data front, the Fed’s Beige Book was released early this morning and showed a very subtle upgrade to growth. Whereas the

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Macro Morning – Why more oil?

Stocks were down across the board over night as the growth downgrade in Japan which was the key driver in our timezone yesterday gave a weak tone as European markets started trading. But the news didn’t get much better. Even though Italy got a 2 year bond issue away at a significant discount to prices

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Macro Morning: NASDAQ blasts off

London was out on a bank holiday last night so it was left to continental Europe and the US to drive sentiment. I was however surprised when I woke up this morning and saw that Europe had rallied in the manner it did. The  German IFO business survey is one of the most closely watched

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Macro Morning – Stocks surge

Stocks in Europe and the US rallied on Friday after the ECB bond spread target rumour hit the screens again and a letter from Fed Chairman Benanke to one of his congressional critics was was released to the press. In the  letter Bernanke said that the Fed had more room for monetary stimulus which in

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Macro Morning – Reality bites

Stocks in the US didn’t like the combination of a  couple of my longer term themes last night. So today it’s time to focus on the economic reality not the fund managers positioning or mind set. Those two themes are enduring weak aggregate demand in the globe and QE3 coming later rather than sooner. Dealing