Global Macro


US travel rebound takes off

This is what happens when you have a competent vaccine rollout. No prison island. No budget bribes to offset it. Just folks getting on planes and traveling their butts off: At the current rate of rebound, the US will exceed 2019 travel volumes by August this year: What follows is a boom. And when I


Crack! Beware the inflation bullwhip

Deutsche with the note on why elevated US activity and inflation are not over yet: Sorry, we’re out of stock So far, share markets have been relatively calm about supply chain problems. This could signal investor complacency given that reports of supply chain shortages and price jumps have been hard to avoid. One of the


Developed economy vaccines hurtle towards travel reopening

Despite the resurgent virus in developing economies, developed countries are making solid vaccine strides, via Goldman: Vaccinations outperformed our forecasts across all DMs in April apart from theUS. Supply will accelerate further in May, largely thanks to Pfizer-BioNTech, but also increasing capacity from other producers, and Novavax approval in the UK. The daily pace of


Large swathes of global economy still in lockdown

Goldman with the note: Our global GS Effective Lockdown Index (ELI) – a combination of official restrictions and actual mobility data from 46 economies, weighted by PPP GDP –remained broadly unchanged in the last week of April as ELI tightening in the eAsia Pacific (ex-China) region was offset by ELI easing in other regions. Using


Global economy set for a consumer-led boom

As we know, Australia’s household saving rate boomed last calendar year on the back of lockdowns (which reduced expenditure) and massive stimulus (which increased disposable income). An enormous $187 billion of household income was saved in calendar year 2020 – more than double the previous peak of $80.5 billion saved by households in 2015: Turns


A crack-up boom, or business as usual?

Nordea with the note: A crack-up boom, or business as usual? At the beginning of this year a friend said “he was afraid to hold cash”. Looking at asset price inflation since then it appears he was right to be fearful. House prices have been exploding higher, key equity indices trade at all time highs, metal


Global chip shortage to crash tech stocks?

The tech heavy NASDAQ is up nearly 58% in the last twelve months, leading the way against other stock markets – all of which are enjoying bull market conditions with 20-30% annual gains. But is the top coming from an unlikely source? Apple posted its latest quarterly earnings overnight that had two big surpsies –


Why working from home will stick

A new research paper from the Ronzetti Initiative for the Study of Labor Markets predicts that working from home (WFH) will stick after the pandemic ends, with 20% of full workdays to be performed remotely long-term versus 5% previously. It also estimates a 5% productivity uplift from WFH: We survey more than 30,000 Americans over multiple


Morgan Stanley: Winter is coming for risk markets

Morgan Stanley are out with a vague “Sell in May, but don’t go away” research note, implying a “difficult summer” (read: our winter) ahead for markets as they get complacent due to a mild form of normality returning to developed economies post COVID. They contend there are three fundamental challenges to the “everything is awesome”


COVID vaccines are working

Bank of America has published an interesting chart on the rising COVID vaccination rates across the USA and UK, where around 70% of their populations have received at least one shot: The US administered 21mn vaccine doses over the past week, increasing the total to 218.9mn. Europe administered 21mn doses this past week, for a


China’s demographic time bomb is rigged to blow

Even before COVID, China was facing stiff headwinds from an ageing population. These headwinds stem from the nation’s ‘one child policy’, which came into effect in the early-1970s and was credited with preventing around 400 million births from 1979 to 2010. The ‘one child policy’ initially produced a population pyramid that was optimal to economic growth,


The making of the mother of all booms

Cross-posted from Policy Tensor comes a narrative that will send a shiver down the spine of the Aussie fake left: As I watched Powell give his speech yesterday, I had to keep pinching myself to check that I wasn’t dreaming. The technocrats who’ve run the world economy since the Volcker Coup finally seemed to get it.


Vaccinated US outpaces locked down Europe

For a few months now I have posited a global economic circumstance called “Biden’s America First”. It is one in which the US fiscal and vaccine advantages materially outstrip Europe leading to higher growth, inflation and yields. In turn this will be deflationary for the world as the US dollar comes to dominate again. Goldman


COVID crisis over? Vaccines working on virus variants

Key points from the UK’s COVID Symptom Study: No vaccines contain COVID-19. Pfizer better than AZ in infection risk reduction after one shot but both good: 90% reduction in hospitalisations. “Definite immunity” still a work in progress. Variants are “clobbered” by the second dose of vaccines. South African version definitely and probably Brazilian. Single-dose still


The virus will disrupt markets again

Mizuho with the warning: We have made it a habit, early every Monday morning, to review the global status of the COVID-19 pandemic, based on figures listed on the Johns HopkinsUniversity web site. We want to know whether rise in new infections is accelerating or slowing down. We are particularly interested in whether any specific


Brazilian variant spooks medicos

Natural selection is a beast. The moment we get individual or herd immunity and natural selection goes to work on finding a way around it. The FT is reporting on a new COVID variant from Brazil that is spooking medicos: First detected in November it has now spread to 35 countries. 25-61% of previously infected


Is the post-COVID boom going to bust?

BofA: In a normal business cycle recovery, the economy gradually returns to full employment, causing a lagged return of inflation pressure. This gives monetary and fiscal authorities’ time to recalibrate policy before there is serious overheating. This cycle looks far from normal: Super easy monetary and fiscal policy suggests the fastest business cycle recovery since


Israel proves that vaccination works

Israel has become somewhat of a global experiment on the global COVID vaccination front. It has rolled out vaccines at the fastest pace in the world, with around half of Israel’s population having received the first dose of Pfizer’s two-shot regime and around one-third having received both shots. The initial results are promising with two


Canada trashes entry standards to pump immigration ponzi

In late 2017, the Canadian Government launched a massive increase in the country’s immigration program, announcing that one million migrants would be let in over the following three years, with an annual migrant intake of 340,000 considered the “new normal”. Canada’s immigration minister, Ahmed Hussen, claimed the new targets would lift immigration to nearly 1%


Global fundies spooked by inflation

ZH has a great summary of the BofA fundie monthly: Below we present some of the highlights from the latest FMS, which finds that a record number of investors are taking “higher-than-normal” risk, up to 25% in February the highest on record… … for the following reasons: Net 91% of investors now see a stronger economy