It’s a post-truth world as the US dollar was stable: Other majors likewise: Commodity currencies largely firmer: Gold weaker: Oil stronger: Base metals too: Big miners largely weak: US and ME high yield broke out with oil: US bonds were dumped: But German are very near record highs: And stocks tacked on a half percent:
by Chris Becker The public image of the European experiment is that it has been setup to bring Europe closer together financially, culturally and strategically, a melting pot of medium-sized States so that one big entity cannot shape or rule the continent’s future. The reality is Germany rules Europe for Germany. The financial gains for
by Chris Becker Last night, the Bank of England held its monthly meeting and made no surprises with the first rate cut – down 0.25% to 0.25% even – as part of a post Brexit referendum easing program. They also announced an expansion in their bond buying program (70 billion pounds) and in news that
European bank stress tests have been greeted with an avalanche of cynicism, from Bloomie: The problem is that the tests, in effect, continue to turn a blind eye. They have to: There’s no clear way to remedy any big shortfalls they might find. Europe’s banking rules — thanks in large part to Germany’s reluctance to
George Soros via Foreign Policy: The refugee crisis was already leading to the slow disintegration of the European Union. Then, on June 23, it contributed to an even greater calamity — Brexit. Both of these crises have reinforced xenophobic, nationalist movements across the continent. They will try to win a series of key votes in
From the AFR: Platinum, the Sydney-based global value investor, is defying the bearish mood and buying more European bank stocks after its positions in banks accounted for almost half of the fund manager’s losses so far this year. The Platinum Unhedged Fund’s latest report shows that its value fell 10 per cent in 2015-16 compared with
From the BBC: A lorry has struck a crowd after Bastille Day celebrations in the southern French city of Nice, killing at least 80 people and injuring dozens, officials say. It happened on the famous Promenade des Anglais after a firework display. The driver was shot dead and guns and grenades were found inside the
Not clear yet but horrible, from AFR: At least 73 people were killed and many more injured after truck was driven at high speed into a crowd celebrating Bastille Day in the southern French coastal resort of Nice, French media has reported. A gunman reportedly got out of the lorry and fired into the crowd on the
From Citi: Like most boys, my three-year old loves see-saws. From his perspective, it has two steady states. ‘Down’ when he sits on it – and ‘Up’ when daddy sits at the other end. The transition between the two states is all too swift. And unfortunately, every time we end up in an equilibrium, it’s
Summarised by the FT: Theresa May has entered Downing Street with a promise to address the country’s deep divisions, ruling not “for the privileged few” but for people who felt they were losing control of their lives. Within hours of becoming the UK’s second female prime minister, Mrs May made her first cabinet appointments by
From Morgan Stanley: Italian policymakers are facing a dilemma between the need to reinforce the capital of the banking system, and the need to protect retail savers. We review the options, but argue any government money involvement could put its support at risk in the upcoming referendum in October. Pressure is building to restore confidence
From Citi: The sudden withdrawal Monday of Andrea Leadsom for the Conservative party leadership leaves Home Secretary Theresa May as the sole candidate. David Cameron has announced that there will be a new PM by Wednesday night; we expect May to take over as PM shortly. Given May’s imminent appointment, discussions about the
Here is the real problem for Brexit, from Goldman: Following the Brexit surprise, we revised our Sterling forecasts weaker, but – amid lots of doomsday scenarios for the Pound – resisted the temptation to forecast a free-fall. Now that markets have settled somewhat,we are switching to forecast a second leg of weakness for the Pound,
The Brexit panic is over almost before it began. The US dollar eased: Yen did too, zombieuro firmed: Commodity currencies mostly rose though not Aussie: Gold gave some back: Oil firmed: Base metals are lovin’ it: Big miners too: And EM/US high yield also rebounded: So, the panic is over. Why? Because it’s just more
From the Daily Mail: Germany’s foreign minister Frank-Walter Steinmeier and his French counterpart Jean-Marc Ayrault today presented a proposal for closer EU integration based on three key areas – internal and external security, the migrant crisis, and economic cooperation. But the plans have been described as an ‘ultimatum’ in Poland, with claims it would mean
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From George Soros at Project Syndicate: Britain, I believe, had the best of all possible deals with the European Union, being a member of the common market without belonging to the euro and having secured a number of other opt-outs from EU rules. And yet that was not enough to stop the United Kingdom’s electorate
Updated 1.50pm – 1 million votes in front for Leave New, Brexit on track: Markets charging the USD and all red: Old, landslide building: Old: Old: Old: Old: East Anglia University model gives Bremain zero probability: 03:00 Fifth forecast update My predictions continue to be much more pessimistic for Remain than the betting markets,
From the Tele: BBC: A few brave analysts calling a marginal BREXIT victory.
From What UK thinks come a one point swing to remain on the final day: As expected, from Deutsche: From a highly dubious sample size of two, we can conclude that there is usually a late swing towards the status quo, which makes sense given the burden of proof is really on the “yes” camp so
The US dollar firmed up over the weekend as Brexit fears took center stage: The yen rally has broken out on save haven flows but euro is weak: Commodity currencies were all over the place: Gold was strong: Oil is weak: Base metals do not know what they are: Nor miners: But US and EM
From Westpac’s Elliot Clarke: As the ECB has increasingly turned to alternative measures, we have outlined how confidence amongst borrowers and lenders and credit activity have responded. The key takeout has been that, while confidence amongst households has improved materially leading to stronger consumer spending, the impact on non-financial corporates had been much more modest,
Sydney Heads, 1865, Eugene von Guérard, Art Gallery of NSW …more to come… China Chinese premier vows to stabilise the property market – SCMP ‘Skyrocketing’ debt at state firms among biggest challenges facing China’s economy – SCMP Shanghai Said to Be Nearing Purchase Curbs for Warming Property Market – Caixin China’s rust-belt city Shenyang may
From Goldman: On perhaps the most important metric – inflation – we are almost back to where we started, with core near last year’s low of 0.6 percent. Looking through the lens of the inflation mandate, sequential (month-over-month) inflation needs to triple from its pace over the past year for the ECB to meet its
Strong words from probably the greatest trader of the 20th century as the “aylites” gather in Davos and make soothing noises, George Soros calls it like he sees it. From an interview at the NY Review: Gregor Peter Schmitz: Merkel used to be very cautious and deliberate. People could trust her. But in the migration
From the FT, a decent backgrounder on France’s surging National Front: The stronger this party gets the weaker the euro and stronger the US dollar. It’s another factor to exacerbate the mining GFC.
From the BBC: France’s far-right National Front (FN) appears to have made big gains in the first round of regional elections, estimates show. They put the FN ahead in at least six of 13 regions in mainland France. The elections are the first electoral test since last month’s Paris attacks, in which 130 people were
Via UBS: Quantifying the amount of QE/QE2 that is currently priced into the market is clearly a subjective exercise. Nevertheless we have given it our best shot. Overall, we believe that the market is currently pricing in a €8.5bn increase in monthly sovereign purchases and an extension of QE by 3-6months. Media surveys of market
A new risk for 2016/17 is rising. No, it’s not terrorism but it is its abominable offspring, from The Independent: Meet “le Front National”. They call their leader “our Joan of Arc”, the saintly heroine who has come to lance the Muslim peril and slay the Brussels hydra. And to her supporters, Marine Le Pen,
by Chris Becker Change is no change in Greece, with the return to power of Syriza, still led by Alexis Tsipras over the weekend in a snap general election. From Bloomberg: The former prime minister’s Coalition of the Radical Left, or Syriza, received 35.5 percent of the vote, according to an official projection by the
