Global Macro

The USD was weak last night: Commodity currencies were weaker still: Gold was strong: Brent was hit: Base metals were savaged: Big miners mauled: EM stocks fell: High yield debt was suspiciously strong: US bonds were bid big: European spreads widened: And stocks faded.

Markets continue to ignore North Korea.

Cross-posted from Sinocism: The Trump-Xi Citrus Summit seems to have been fairly bland, as predicted in the April 4 newsletter.

By Leith van Onselen From the IMF Direct blog comes an interesting analysis of the declining share of income going to workers, which is being driven by automation and globalisation: After being largely stable in many countries for decades, the share of national income paid to workers has been falling since the 1980s.

From BT’s excellent Vimal Gor today: March was a volatile month during which the market’s obsession with ‘Trump-onomics’ continued to dominate.

From Macquarie:  Industry/manufacturing is a key sector for metals demand, and the PMIs are a timely indicator of its health.

DXY is back: Commodity currencies fell: Gold too: Brent rose as sell side permabulls pile in: Base metals fell: Big miners were mixed: EM stocks lifted: HY too, with oil: US bonds were sold: European spreads widened: And stocks rose, especially in Europe: Two events dominated the night.

By Leith van Onselen The IMF has released a new working paper entitled “Excessive Private Sector Leverage and Its Drivers: Evidence from Advanced Economies”, which provides a quantitative assessment of the gaps between actual and sustainable levels of debt and identifies the key factors that drive excessive borrowing.

GMO / James Montier hit on a lot of the themes near to my heart with a recent piece on secular stagnation and the rise of populism: The rise of populism has been one of the broad themes to emerge over the last few years.

DXY rebounded strongly last night: Commodity currencies too: Gold fell: Brent rebounded on Libyan issues: Base metals joined the party: Big miners too: And EM stocks: Plus high yield: US bonds were dumped: European spreads compressed: And stocks roared: Trumpflation returns and why not?

By Leith van Onselen One of the most common arguments used to support mass immigration is the claim that it keeps the population young and productive, and without constant immigration, the population would grow old and the economy would stagnate.

DXY held on last night: Commodity currencies roared: Gold firmed: Brent held on: Base metals faded: Big miners firmed: EM stocks are roaring: But not high yield: US bonds were bid: European yields took off: US stocks hiccuped, Europe softened: US reflation is off and global reflation is on.

Fresh from the excellent Vimal Gor at BT: It has been a difficult few months in terms of positioning as the market has had extremely strong momentum in a short period whereas the underlying fundamental economic data has not been as conclusive, the subject of this newsletter.

From UBS: The (nearing) end of private sector deleveraging in DM Conventional wisdom is that there has been little post-crisis deleveraging.