Global Macro


We’re all bond bears now

Ray Dalio is: Central Banks’ Reversals Signal the End of One Era and the Beginning of Another For the last nine years, central banks drove interest rates to nil and pumped money into the system creating favorable carries and abundant cash. These actions pushed up asset prices, drove nominal interest rates below nominal growth rates,


Uhlmann vs Bolt on the G19

Apparently this ABC Insiders video hasbeen well-reived in the US: What did we learn about @realDonaldTrump at this #G20? @CUhlmann explains. #Insiders — Insiders ABC (@InsidersABC) July 8, 2017 That pretty much sums it up for me. The loon pond answers via Andrew Bolt: Sounds plausible, if you forget who Trump replaced. Didn’t Russia


US jobs solid but no cigar

US jobs were out Friday night and came in ahead of expectations: Total nonfarm payroll employment increased by 222,000 in June, and the unemployment rate was little changed at 4.4 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care, social assistance, financial activities, and mining. …The change in total nonfarm


Australia “actively working” on TPP 2.0 sell-out

By Leith van Onselen The Turnbull Government is reportedly “actively working” to resurrect the Trans-Pacific Partnership (TPP) trade agreement minus the United States, according to the Australian Government Response to the Senate Foreign Affairs, Defence and Trade committee’s report on the proposed TPP agreement, released yesterday. Below are the main items [apologies for the screen


Is the Fed about to end the cycle?

Markets puked last night. The AUD fell against a weak USD and strong EUR: The Battler was mixed against EMs: Gold held on: Brent too: And base metals: Miners fell: EM stocks look very toppy: And it’s quite bearish that high yield credit is leading them down: US bonds were bought at the short end


Calm before storm in US-China relations over

Via Sinocism: 1. Calm Before The Storm In The US-China Relationship Is Over Sinocism readers have known for many weeks that this was coming. Investors and analysts may want to rediscover the worries about the relationship that were so prevalent during Trump’s transition period.  This week’s Trump-Xi meeting is unlikely to change the trajectory. Haley warns


When does North Korea become a crisis?

Some might think right about now, via the BBC: North Korea says it has successfully tested its first “intercontinental ballistic missile” (ICBM). A state television announcement said the missile, which landed in the Sea of Japan on Tuesday, could hit targets anywhere in the world. But the US and Russia said the missile had a


Return of the commodities pain trade?

Last night the Aussie was weak against USD and weaker still against EUR: It was firmer against other EMs: Brent jumped:   Gold was flat: Base metals jumped: Big miners too: EM stocks were hit: And high yield was weak: Treasuries were hammered: And European bonds: While stocks cracked: It was a tale of four


Oil tells markets where to go

The Aussie was strong against USD and EUR last night: But weak against EMs: Gold slumped: Brent rose: Base metals lifted: Big miners were mixed: EM stocks took off: As high yield rebounded with oil: But the US yield curve sank to new lows: With more tightening European spreads: And stocks rebounded: In short, oil


Oil wrecks the reflation

The Aussie dollar was weak against DMs last night: Stronger against EMs: Gold firmed: Oil was smacked: Weirdly, base metals surged, probably on China stimulus hopes which are WAY premature: Big miners liked it: EM stocks held on: But US and EM high yield buckled: US bonds were sold and curve hit new flats: European


Mining GFC threatens again

The Aussie dollar fell against both USD and EUR last night: But was strong against EMs: Gold fell: Oil was  hammered to new lows: Base metals rolled: Big miners were smashed (-3%+ each for RIO/BHP ADRs): EM stocks broke: EM high yield is looking toppy now: US bonds were bought and the curve flattened again: European


Kyle Bass on wrong currency short as Chinese debt “metastasises”

From Kyle Bass today via Reuters: Hayman Capital Management founder Kyle Bass on Thursday said he remains short the Chinese yuan despite the country’s latest change to the guidance rate, because he believes credit bubble problems are “metastasizing.” “What the public narrative is and what they have been doing behind the scenes are two completely


Macquarie on a world without wages

Brace yourself, the following is not happy reading. About working horses & people ‘There was a type of employee at the beginning of the industrial revolution whose job and livelihood largely vanished in the early 20th century. This was the horse. The population of working horses actually peaked long after the industrial revolution… there was


Stocks pile on late cycle surge

The Aussie rolled against major currencies last night: Commodity currencies too though Brazil is weak: Gold was hit: Brent too: Base metals were mixed: Big miners too: EM stocks rebounded: US high yield is still diverging from EM: US bonds were sold but the curve flattened again: European spreads tightened: Stocks rebounded: S&P500 closed at


Poor old Japan: Low unemployment, less crowded, cheaper housing

By Leith van Onselen For more than a decade, the Productivity Commission has debunked the common myth that immigration can overcome population ageing. For example: PC (2005): “Despite popular thinking to the contrary, immigration policy is also not a feasible countermeasure [to an ageing population]. It affects population numbers more than the age structure”. PC


The perfect storm for stocks

The AUD was strong against developed market currencies last night: And emerging: Gold was firm: Brent weak: Base metals weak: Big miners weak: EM stocks stable: High yield bogged down with oil: US bonds sold: European spreads were stable: And stocks eased: Deutsche takes a useful look at where global markets are poised: …[it] seems


The seven black swans

DXY is still weak, EUR strong and CNY, whoa, is suddenly breaking upwards: Commodity currencies were generally weak: Gold is threatening higher: Brent is threatening lower: Base metals are still trending down: As are big miners: EM stocks were spanked: US high yield is ignoring oil, the EM plod goes on: US bonds were bid