Global Macro


Smoking gene? Evidence emerges that China made COVID

MSN: An early version of Covid-19 that appears to have been grown in a laboratory has been discovered in samples from a Chinese biotechnology firm. The finding lends weight to claims that the virus may have started life as a lab experiment that accidentally leaked out. Bioinformatics experts from the University of Veterinary Medicine and Lorand University in Budapest, Hungary,


The myth of the centralised urban economy

By Ross Elliott, cross-posted from The Pulse “The great enemy of truth is very often not the lie–deliberate, contrived and dishonest–but the myth–persistent, persuasive, and unrealistic. Too often we hold fast to the cliches of our forebears. We subject all facts to a prefabricated set of interpretations. We enjoy the comfort of opinion without the


Global rate hike curves

Courtesy of Morgan Stanley comes a chart of global rate hike curves: My own view is that the Fed won’t get that far before it breaks something important, the RBA won’t even get to lift-off, China will be slashing rates much more than that, and by H2, 2022 markets will be pricing everybody following China.


The road to recession

Charts from Deutsche. Look for curve inversion first: Plenty of times according to previous cycles: No worries…yet: But, this is no ordinary cycle. It’s much faster: And equities stress is already here before a single hike which is very unusual: My own view is that a global recession panic is a matter of months not


Migrant tsunami stifles Canadian wage growth

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%


How to hedge Ukraine

Via Macquarie legend Viktor Shvets: Politics are struggling to contain geopolitics = disruption • In the ‘90s, Zbigniew Brzezinski (former National Security adviser, and one of the best known experts on Eastern Europe), said – ‘Without Ukraine, Russia ceases to be an empire, but with Ukraine suborned and then subordinated, Russia automatically becomes an empire’.


Pandemic enters “end game” as Omicron becomes endemic

The World Health Organization (WHO) believes that the COVID pandemic is entering its blow-off phase and will soon become endemic as the majority of the world’s population becomes infected: The World Health Organisation, normally conservative in its statements on Covid-19, is predicting the end of the pandemic with an expected “period of quiet” as Omicron


Quantitative tightening is coming, but policy will remain accommodative

BofA Global Research with the note: The December FOMC meeting minutes included a lengthy discussion of the timing and speed of Fed balance sheet shrinkage (quantitative tightening or “QT”). The broad message appears to be that QT will start sooner than it did in the previous tightening cycle, and proceed at a faster pace. Even


US inflation is yet to peak

Goldman Sachs with the note: Inflation trends: The core PCE price index rose 0.46% month-over-month in November to a new three-decade high of 4.68% year-on-year, and core CPI inflation rose to 4.96%. Core inflation was again boosted by rapid shelter inflation—which has run at the highest level since 1990 over the last three months—and another


2022 could be the year Tesla goes Teracap

Morgan Stanley with the note: Tesla reported 4Q unit deliveries roughly 15pct ahead of consensus, annualizing to over 1.2mm units BEFORE contribution from Austin and Berlin which we ultimately expect to be far larger plants than Fremont and Shanghai. 3key thoughts: It’s not just the unit beat, but the favorable economics from reducing the proportion


Top 12 global economic charts of 2021

Goldman Sachs’ Global Economics Analyst has released its top 12 charts of 2021. Below is the overview: The global economy recovered rapidly in 2021 as demand surged. Mass vaccinations and adaptation made growth less sensitive to infections although risk aversion to the virus remained high in Asia-Pacific for much of the year. Fiscal policy turned from


Singapore seals border to Australia

Only three months ago, Singapore was experiencing a massive surge in COVID cases that dwarfed anything Australia has experienced: This September outbreak produced a peak COVID death rate of only 2.5 people per million residents: Now with Omicron cases taking off, Singapore has sealed its border shut to Australia and 19 other nations included in


Joye: The zombie economy can’t last

Chris Joye at Coolabah with the note: The moral hazard of having central banks and treasuries constantly bail-out bad businesses since 2007 has led to the rise of “zombie firms” that have earnings that cannot cover the interest repayments on their debts. In the US, around 15-20 per cent of all listed businesses now meet