Global Macro

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The Trump boom and bust measured

DXY was soft Friday night: But AUD was outright weak: Against EMs as well: And against gold: Brent lifted: Base metals too: Big miners a little: EM stocks hit new highs: As junk held: Treasuries were sold but the curve flattened: Bunds are going nowhere: DM stocks eased: There are more Trump tax doubts, from

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Markets boom as Trump tax cuts rush ahead

DXY firmed overnight: AUD was soft against DMs: And weak against EMs: Gold fell: Brent too: And base metals: Big miners caught a bid: EM stocks took off: Junk snapped back: US yields climbed, the curve flattened: German yields did nothing: Stocks roared: Data was pretty good in the US with strong industrial production, builder

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Goldman’s top trades for 2018

Via Goldman: Our Top Trade recommendations reflect our Top Ten Market Themes for the year ahead. To capture the gradual normalization of the bond term premium and position for a more hawkish path of the Fed funds rate than the market currently expects, we recommend going short 10-year US Treasuries. Given our expectations of a ‘soggy

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With Millennials screwed the world over, it’s time for a global revolt

By Leith van Onselen This site has frequently railed against the unfair treatment leveled at Australia’s Millennial generation. This inequity is most apparent in the housing market, where today’s younger generations are being forced to pay far more than their parents to live in smaller and poorly located accommodation. But it extends beyond housing and

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There’s still a lot wrong with TPP 2.0

Cross-posted from The Conversation: The latest incarnation of the Trans-Pacific Partnership (TPP) is said to have “fewer bad bits”. But as our experts point out below, there’s still a great deal wrong with, or missing from, the regional free trade agreement. The new TPP is informally known as the TPP11, after the United States pulled

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Global markets choke on China

DXY was hammered last night: AUD too against EUR, it held against the plummeting USD: Gold was firm: Brent was whacked by a dovish IEA report: Base metals were hit: Big miners flogged: EM stocks looks worrying like forming a double top: US and EM junk continues to warn: The US curve flattened again: The

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Risks to the mighty bull

DXY fell sharply Friday as Trump tax headbutting goes on: AUD was even weaker against DMs as the RBA paralysis sinks in: Against EMs, AUD was mixed: Gold got smacked, oddly: Brent was firm: Despite the jump in US oil production and the rig count from 729 to 738. More to come on that front:

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Costly medicine monopolies must be purged from TPP trade talks

Cross-posted from The Conversation: Negotiators from 11 countries have been racing to resurrect the near-dead Trans-Pacific Partnership Agreement before the Asia-Pacific Economic Cooperation (APEC) summit this weekend. The latest plan to get the controversial trade deal up and running again after the withdrawal of the United States involves freezing some of its controversial rules. These

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Trump tax delays trigger sell-off

I’ve missed this update all week owing to flu. Some interesting stuff is going on. Last night, DXY fell sharply: AUD was stable anyway against DMs : But not as weak as EMs: Gold firmed: Brent too on Saudi tensions: Base metals fell: Big miners were hit: EM stocks eased: Junk bonds fell sharply, especially

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The $8trillion sharing economy is now

Via BofAML: The Sharing Economy: transforming 21st century business The emergence of the Sharing Economy – an umbrella term for a range of activities transacted over online platforms – is transforming 21st century business. Disruptive business models include: on-demand (Uber), rental (Airbnb), gig (TaskRabbit), access (Spotify), collaboration (WeWork), platforms (Amazon), circular (ThredUP) and peer-topeer (Lufax).

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What the Paradise Papers tell us about global business and political elites

Cross-posted from The Conversation: The so-called Paradise Papers may sound familiar – leaked documents from a law firm that specialises in offshore services reveal how the global elite avoids paying taxes. Even the name has the same ring to it as last year’s Panama Papers expose. But the Paradise Papers are different, reflecting the complexity

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Global core inflation slowly climbs

Via UBS: (Core) Inflation is slowly awakening We see the broad narrative of inflation in the market as three-pronged. (i) Phillips curves are failing us because a variety of structural changes (demographics, enhanced competition from e-commerce, the gig-economy etc.) have rendered them obsolete and global slack matters more than domestic slack; (ii) even if the

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With a new futures market, Bitcoin is going mainstream

Cross-posted from The Conversation: The Chicago Mercantile Exchange will soon begin trading Bitcoin derivatives (futures contracts), signalling the cryptocurrency is now a mainstream asset class. Bitcoin has had limited use in the mainstream economy in part because the volatility of its price. The value of the currency might go up or down significantly between the

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Flawed TPP 2.0 could be operational within a year

By Leith van Onselen The AFR reports today that a revamped Trans-Pacific Partnership (TPP) mega trade pact, involving 11 of the original signatories (but excluding the US), could be operational within a year: Both the Australian and Japanese governments, both of which are pushing hardest to revive the TPP,  are quietly confident they will receive in-principle

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Canada announces massive population ponzi

By Leith van Onselen Late last week, Canada’s immigration minister, Ahmed Hussen, announced a big increase in Canada’s immigration program, with some one million migrants to be let in over the next three years, with a 300,000 migrant intake now considered the “new normal”. From CNBC: The number of economic migrants, family reunifications and refugees

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Have central banks killed money itself?

From Deutsche: The Future of Money Part 1 – The Start of the End of Fiat Money? Background In “The Next Financial Crisis” we suggested how China’s fairly sudden integration into the global economy at the end of the 1970s and a very favourable once-in-alifetime shift in demographics from around 1980 onwards could have contributed

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Fed gets set to hike again

DXY was firm last night: So was AUD, largely just tracking a big bounce in the NZD after good jobs data: EM currencies were strong: Gold firm: Brent fell: Base metals just won’t quit: Big miners roared: EM stocks hit new highs: High yield fell: US short end yields jumped. The long end fell. The

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Should central banks adopt a nominal GDP target?

By Leith van Onselen Economists from the New Zealand Institute of Economic Research (NZIER) are urging the inclusion of a nominal GDP growth target in the Government’s upcoming review of the Reserve Bank Act. From Interest.co.nz: At the moment the sole goal of monetary policy is to target inflation. The Government’s likely to want to

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Robots are coming to a building site near you

By Leith van Onselen For years the growth lobby has argued that Australia needs to run high levels of immigration in order to alleviate so-called skills shortages and to mitigate an ageing population, despite the Department of Employment showing that Australia’s skills shortage “remains low by historical standards” and Australia’s labour underutilisation rate tracking at

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Markets shudder as US yields climb

DXY fell a little last night as it waits for Trump tax rocket juice: But that could not save the AUD which plunged against USD And EUR: And EMs: Gold was soft: Brent firm: Base metals still smokin’ the crack: Big miners not! EM stocks gave out another warning: High yield was soft: US yields