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Q1 GDP – too good?
Better than expected Q1 GDP growth in both China and the US, may not be as positive for asset prices as the initial market reaction might suggest. Not only does it dispel some of the more ambitious hopes for additional fiscal and monetary stimulus, but it also serves to encourage each side to dig in […]
Continue readingUS jobs growth – more mixed signals
Weak net job growth, but high average hourly wage growth in February has been followed by an improved rate of net job growth in March, but a weaker pace of increase in average hourly wages. The earth-shattering conclusion from all this is perhaps not to extrapolate a single month’s data as it may just get […]
Continue readingECB 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 […]
Continue readingMarket 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 […]
Continue reading1848?
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 […]
Continue readingEngineering 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 […]
Continue readingWar 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 […]
Continue readingBrexit means Brexshit!
Confused? You certainly should be as the political game of betrayal over Brexit reaches its denouement. In the very short term, markets (both fx and equity) are unfazed by the ‘deal’ being foisted on them, as they have already been softened up by the project fear propaganda – ‘any deal is better than no deal’. […]
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