Category Archives for "Economics"

(Earnings) Klingons on the starboard bow

Why are markets perennial optimists? Perhaps it’s a reflection of the commercial bias favouring a positive investment recommendation by market participants to portray a glass as half full rather than half empty.  Fold in expectations of a central bank put to bail out markets with endless liquidity fixes when things get sticky and it’s easy […]

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ECB hopium

“substantial monetary policy stimulus remains essential to ensure the continued build-up of domestic price pressures over the medium term.” So says Sig Draghi in yesterday’s release of the ECB’s 2018 annual report and so much for any doubt that the ending of the asset purchase programme (AAP) in December would actually herald a return to […]

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Market algos chasing Central Bank intervention, rather than anticipating it

Markets are going with the ‘flow’, because that’s the only way to trade these algo-driven markets.   The new Fed chairman flip-flops from hawk to dove while the ECB hint at following suit (ahead of its May parliamentary elections) and the Chinese unleash another Tsumani of credit. Equity valuations meanwhile recoup the Q4 lost ground, notwithstanding […]

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1848?

BTFD or STFR depends on what game you think is really being played out there in markets. The recent bounce in equity prices on the apparent reversal in the Fed’s QT narrative together with an improving narrative on Chinese tariffs and now hopes for a reversal in Brexit, notwithstanding the resounding defeat of Theresa May’s […]

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Engineering a ‘Santa Rally’ in oil, but what then?

If the price of continued US support after the Khashoggi murder was the lower oil price, then it must rank as one of the  most expensive assassinations of  journalist in history, with Saudi Arabia’s gross oil production revenues down almost $2bn per week. The attempt to resurrect his political reputation at the G20 meeting was […]

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War by other means – interest rates

War by other means?  Forget the South China sea, Syria or Korea.  If you haven’t noticed, the EU and China are locked in a high stakes game of chicken with the US over control of the World’s reserve currency, where the weapon of choice are interest rates. While much has been made of Trump’s attempts […]

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