Global Macro


New Fed chair spooks all

DXY took off last night and that double bottom looks the goods: AUD fell against DMs: But could not outpace EMs down: Gold was thumped: Oil too: Base metals rolled: Big miners too: EM stocks were hammered: Junk eased: Treasuries fell and the curve flattened: Bunds too: Stocks got crunched: US data was good with


Stocks boom resumes

DXY was roughly stable last night: AUD firmed against DMs: But fell against EMs: Gold was also stable: And oil: Base metals rose a bit: Big miners more: EM stock fired: As did junk: Treasuries were bought: Bunds sold: And stocks boomed: Data was soft as US new homes sales missed. That triggered the Treasury bid


TPP 2.0 faces roadblocks, and that’s a good thing

By Leith van Onselen The recently negotiated Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – dubbed by MB as TPP 2.0 – looks to be facing numerous roadblocks to ratification, according to the Nikkei Times: The remaining members of the Trans-Pacific Partnership trade pact will soon sign a revised agreement, but the big question


Markets waver as yields worry

The USD gave up some gains last night: AUD bounced: Gold modestly: Brent was stronger but still looks toppy: Base metals were mixed: Big miners rallied: EM stocks were stable: Junk too: Treasuries were bought: And Bunds: Stocks rallied modestly: Yields are clearly worrying stocks even thought the technical correction is over, from JPM: First, we


Casual Fed launches yields, USD

DXY mostly held up  last night: AUD was universally weak: Gold firmed: Brent held on: Base metals were mixed: Big miners bounced: EM stocks too: And junk: US yields lifted and the curve steepened: Bunds went the other way: Stocks roared: Europe is slowing materially from tearaway speeds:  Flash Eurozone PMI Composite Output Index(1) at


Japan: We won’t alter TPP 2.0 to suit US

By Leith van Onselen Yesterday, I reported that US farmers and the Republican Party are pressuring President Donald Trump to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – dubbed by MB as TPP 2.0. In the article, I argued that TPP 2.0 looked better than the original because it appeared to have


With Millennials shafted 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


Stocks choke on stronger US dollar

DXY bounced lats night and suddenly has a potential double-bottom in place: AUD was weak against DMs: And mixed against EMs: Gold was whacked: Oil too: Base metals rolled: Big miners got hosed: EM stocks too: And junk: Treasuries sold and curve flattened: Same for Bunds: European stocks rallied but US fell: Nothing much on


Trump to join TPP 2.0?

By Leith van Onselen The Australian reports today that US farmers and the Republican Party are unhappy with President Donald Trump’s hostile view of free trade, and many Republican senators want him to reconsider his approach to the Trans-Pacific Partnership (TPP). Australian Prime Minister Malcolm Turnbull is expected to discuss the possibility of the US


How high for bond yields?

DXY was strong Friday night after hitting new lows. Could be a double-bottom. Or not: AUD was quite weak against DMs: And EMs: Gold fell: Oil rose: Despite the rising rig count: • Total US oil rigs saw another solid week, +7 to 798 • Horizontal oil rigs were up even better, +10 to 696


AEP: No Bernanke to save us next time

Via Ambrose Evans-Pritchard: Say your prayers. We no longer have a lender of last resort fully standing behind the global financial system. The US Federal Reserve is prohibited by law from carrying out precisely those emergency actions that halted contagion and a worldwide collapse in October 2008. The Dodd-Frank Act and the post-Lehman culture of righteousness on


The end of rational exuberance?

DXY was soft last night: AUD was strong against DMs: But not so strong as EMs: Gold firmed: Importantly, oil fell: As this monster long has further liquidation ahead: Base metals rebounded: Big miners launched: EM stocks too: Junk bottomed: Treasuries were bid a little: Bunds too: Stocks flew: News on the night was all


Time to buy?

DXY lifted modestly Friday night: AUD rebounded with risk against DMs: Was mixed against EMs: Gold struggled: Oil was crushed: Base metals fell: Big miners lifted anyway: EM stocks rebounded: Junk didn’t: Treasuries were bid and the curve steepened: Same for bunds: European stocks were crushed. US too but then rebounded strongly into the close: The


Credit not interested in equity correction

Via Moody’s: Corporate Bonds Beg to Differ with Their Equity Brethren Thus far, the corporate credit market has been relatively steady amid equity market turmoil. Corporate credit’s comparative calm stems from expectations of continued profit growth that underpins a still likely slide by the high-yield default rate. The record shows that 90% of the year-to-year


Vimal Gor does the volatility

From the excellent Vimal Gor at BT: Off to the races 2018 has started with a bang, first we saw the melt-up and then we saw the crash. The S&P is virtually unchanged from the year-end levels but the volatility has been massive. To put it in perspective, this was the strongest January performance the


Stocks flushed as rates panic builds

DXY firmed last night but not enough: The Australian dollar tumbled against DMs: But EMs fell faster: Gold held on: Oil let go: Base metals held on: Miners let go: As did EM stocks: And US junk: The Treasury curve steepened as only the short end caught a safe haven bid: Bunds were better bid:


Markets signal it’s all good!

DXY jumped then stabilised last night: AUD rebounded against DMs: But couldn’t keep pace with EMs: Gold was hit: Oil too: And base metals: Big miners snapped back: EM stocks too: And junk: Treasuries lost the bid: Bunds didn’t: And stocks rebounded: It’s all good then! Who knows if the VIX accident is over? Maybe,


Stocks smashed

DXY lifted last night on safe haven flows: AUD kept falling against the USD: It was mixed against EMs: Gold was soft: Oil was hit harder: Base metals were mixed: Big miners were hammered: High yield broke: However, Treasuries were strongly bid: And bunds: Stocks were smashed -3% and are still falling as I write:


Bond bull or bond bear?

DXY resumed its crash last night: But AUD fell even faster, against all DMs: And EMs: Gold is strangely muted given the USD weakness: Oil firmed on the big buy from the Squid: Base metals loved the falling USD: Big miners yawned: EM stocks fell: Junk is threatening to break lower: As Treasuries cop a caning


1987 redux?

DXY was soft last night: But the AUD was softer against all DMs as “risk off” crept in: It fared better against falling EMs: Gold fell too: Oil looks in for it: Base metals caught the fever: EM stocks were slammed: Junk took a little pain: As the Treasury curve steepened again: The spread to


TPP 2.0 better but Productivity Commission assessment still vital

By Leith van Onselen Last week, Prime Minister Malcolm Turnbull and Trade Minister Steve Ciobo issued a media release hailing that the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), dubbed by MB as TPP 2.0, had been signed by eleven Pacific member nations: This a landmark deal for trade in our region. Australian


William White: It’s worse now than pre-GFC

Via AEP: “All the market indicators right now look very similar to what we saw before the Lehman crisis, but the lesson has somehow been forgotten,” said William White, the Swiss-based head of the OECD’s review board and ex-chief economist for the Bank for International Settlements. Professor White said disturbing evidence of credit degradation is


Global market melt-up flames out

DXY firmed a touch last night but was hardly convincing: AUD stopped too: Against EMs it’s roughly stable: Gold firmed: Brent flamed out: As did base metals: Big miners were hammered: EM stocks eased: Junk too: US yields piled through 2% at the short end but the curve flattened: Bunds were bid: US stocks roared


Andy Xie: The government bubble is going to pop

Via Andy Xie recently and by popular request: Since the global financial crisis of 2008, all major economies have kept interest rates at or close to zero and maintained large fiscal deficits. A decade of massive, synchronised monetary and fiscal stimulus has led to the greatest asset bubble in history, to the tune of about US$100 trillion, nearly 1.5