Global Macro


Trade agreements “serve rent-seeking politically well-connected firms”

By Leith van Onselen MB has long derided Australia’s ‘free trade agreements’ (FTAs) for their complexity and deleterious efficiency impacts, their anti-competitive measures around intellectual property, as well as some FTAs containing clauses enabling trading partners to sue sovereign governments (called Investor-State Dispute Settlement or ISDS). On Friday, the University of Chicago’s Pro-Market Blog published


Markets are Donald Trump

DXY rose last night: AUD did too: Gold fell: Oil firmed: Base metals too: Not big miners: Or EM stocks: Junk did better: Treasury yields rose: And bunds: Stocks rebounded: The key was this, via Bloomie: Judging from his tweets, President Donald Trump appears to have the knives out for Inc. But inside the


Stocks bull trap snapping shut?

DXY was stable last night: AUD was weak: But EMs weaker still: Gold was strong: Oil weak: Base metals stable: Big miners fell (chart is wrong): EM stocks did OK: Junk is at support: Treasuries were bid: Bunds too: The Nasdaq was caned: And the S&P500 closed below both its 200DMA and February low though


Bain warns of automation apocalypse

By Leith van Onselen Last week, job search website Adzuna estimated that around one-third Australian jobs could be lost to automation by 2030, with lower-skilled and manual labour jobs most at risk. Yesterday, Zero Hedge reported on a fascinating keynote address by the Managing Director of Bain & Company’s Macro Trends Group, Karen Harris, entitled: “Labor


US and China work trade solution through back channels

Via the WSJ: China and the U.S. have quietly started negotiating to improve U.S. access to Chinese markets, after a week filled with harsh words from both sides over Washington’s threat to use tariffs to address trade imbalances, people with knowledge of the matter said. The talks, which cover wide areas including financial services and


Markets puke on Donald’s China tariffs

DXY firmed last night: AUD was flogged across the board: Gold warmed: Brent fell: Base metals too: Big miners are in trouble: EM stocks were smashed: Junk too: Treasuries were bought: And bunds: Stocks were pounded: The headline risk for the night was The Donald, via FT: The Trump administration plans to impose 25 per


Tech wreck

DXY was weak last night: AUD was too against DMs: Better against EMs: Gold firmed: Oil too: Base metals were hit: And miners clubbed. The post-2015 bounce is done: EM stocks were hit: Junk too: But Treasuries still sold: Not bunds: Stocks took it for the team: There’s no broad risk off here. It’s more


Larry Kudlow: “Let it rip”

DXY jumped last night: AUD fell across the board: Gold was hit: Brent was firm: Base metals fell: Big miners too: And EM stocks: Junk was flat: Treasury yields broke out at the short end but the curve dropped sharply: Same for bunds: Stocks firmed: Yesterday I mulled the history of Larry Kudlow and his


How will big Trump tariffs impact China?

DXY was stable last night: AUD was firm on good China data: Gold was soft: Oil too: And base metals: But miners jumped with iron ore: EM stocks fell: Junk fell: Treasuries were bid: Bunds too: Stocks pulled back: US retail sales and PPI were soft and GDP estimates got slashed. But all the talk


Who loses the trade war?

DXY was weak last night: AUD mixed against DMs: Strong against EMs: Gold was choppy: Oil fell: Base metals too: Miners firmed: EM stocks too: Junk fell: Treasuries were bought: Bunds too: Stocks were firmish: Not much in data or news. Goldman has some useful stuff on trade wars: US tariffs without retaliation. We round up


Historical parallels for trade wars

In his masterpiece, The World in Depression, Charles A. Kindleberger concludes the major cause of the Great Depression was a paralysis of leadership caused by the decline of the UK and the immaturity of the US. Neither was able to provide leadership and put themselves forward as the economy of last resort. Kindelberger argues that during


Why would anyone buy Europe?

Last night DXY copped it: AUD was strong against all DMs, in part owing to the North Korean thaw: It was mixed against EMs: Gold jumped: Brent was stable: Base metals firmed: Big miners lifted: EM stocks too: And junk: Treasuries sold: And bunds: Stocks firmed: It’s all about Europe today and none of it


Stocks jump as Italians hose EUR

DXY firmed last night: AUD was mixed against DMs: Was soft against EMs: Gold fell: Oil jumped: Base metals fell: Big miners eased up: EM stocks too: Junk firmed: Treasuries were sold: And bunds: Stocks jumped: More buy the dip, I suppose. US data good with the services ISM still tearing it up 59.5. The


Why stocks can still go higher

DXY was soft Friday night: But AUD was even softer versus DMs: EMs were mixed: Gold firmed: And oil: Base metals were mixed: But big miners were hosed again: EM stocks were lower: Junk jumped: Treasuries were sold: Bunds were bought: Europe got smashed as the US fell early but the latter recovered manfully to


Policy errors sink stocks

Policy error fears sank DXY last night: AUD was weak against EMs: Less so against EMs: Gold held on: Oil was weak again: Base metals too: And big miners: EM stocks eased: US junk was hit: Treasuries were bid: And bunds: As stocks took it in the neck: US data was strong as the ISM


Memo to Jericho: Lower UK immigration boosts wages

By Leith van Onselen Back in November, Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University, penned an excellent article in Project Syndicate which, among other things, explained why never-ending mass immigration pushes down wages growth: Standard economic theory tells us that net inward migration, like free trade, benefits the native population only after