- "With last week’s strong market rally coming on the heels of the prior weeks’ strong re-entrenchment, we believe there is much investor scepticism over the future
direction of the market. Macro economic data remains weak: business and consumer confidence are soft, the manufacturing recovery has stalled and labor market growth is anaemic. On the other hand, valuations are potentially attractive in many stocks and sectors. Heading into earnings season, there is a potential for upside surprises in a number of stocks which makes a defensive positioning a risky scenario for investors."
- "We are recommending a combination approach for investors: going long highquality stocks that are attractive valued on a free-cash-flow basis that have also been experiencing significant upwards earnings revisions. We believe this combination of attractively valued high-quality names that are experiencing a “catalyst” in the form of upwards earnings revisions positions investors well for the current market. These are defensive stocks that could deliver better than expected earnings this quarter."
Barclays Equity Research 20100712
Readings
Bank Profits Depend on Debt-Writedown `Abomination'- Bloomberg
The feckless Fed - Paul Krugman
Euro Gains Damp Break-Up Talk on Germany's Strength - Bloomberg
Japan ruling party reels after vote - Reuters
Wall St. Hiring in Anticipation of an Economic Recovery - New York Times
Fidelity reopens four money-market funds - Reuters
Crisis Awaits World’s Banks as Trillions Come Due - New York Times
BIS gold swap best news to hit gold in 30 years - Mineweb
The feckless Fed - Paul Krugman
Euro Gains Damp Break-Up Talk on Germany's Strength - Bloomberg
Japan ruling party reels after vote - Reuters
Wall St. Hiring in Anticipation of an Economic Recovery - New York Times
Fidelity reopens four money-market funds - Reuters
Crisis Awaits World’s Banks as Trillions Come Due - New York Times
BIS gold swap best news to hit gold in 30 years - Mineweb
Cutting public deficits in France: between ambition and political will
- "On 30 June, the French government presented a preparatory report in the run-up to the forthcoming public finance policy debate."
- "The report sets out the main measures that need to be taken to cut public deficits in 2011-2013 from 8% in 2010 to 3% of GDP in 2013. A full, detailed, three-year budget for 2011-2013 will be presented in the autumn."
- "The reduction of 5 points of GDP in deficit ratios over three years is extremely ambitious. Four of the five percentage point would come from structural measures, and notably a very marked slowdown in public spending of 0.6% per year by volume in 2011-2013 compared with an average increase of 2.2% per year in 1998- 2008. The remaining percentage point would be achieved through the cyclical growth, with forecast volume growth of 2.5% a year."
- "This scenario clearly seems too optimistic. Based on our own forecast of growth returning very gradually to its potential rate, the ratio of deficit to GDP should come out at 4.5% in 2013. Additional measures are thus likely to be necessary to counter these cyclical effects and achieve the announced target."
CreditAgricole Eco News 20100708
- "The report sets out the main measures that need to be taken to cut public deficits in 2011-2013 from 8% in 2010 to 3% of GDP in 2013. A full, detailed, three-year budget for 2011-2013 will be presented in the autumn."
- "The reduction of 5 points of GDP in deficit ratios over three years is extremely ambitious. Four of the five percentage point would come from structural measures, and notably a very marked slowdown in public spending of 0.6% per year by volume in 2011-2013 compared with an average increase of 2.2% per year in 1998- 2008. The remaining percentage point would be achieved through the cyclical growth, with forecast volume growth of 2.5% a year."
- "This scenario clearly seems too optimistic. Based on our own forecast of growth returning very gradually to its potential rate, the ratio of deficit to GDP should come out at 4.5% in 2013. Additional measures are thus likely to be necessary to counter these cyclical effects and achieve the announced target."
CreditAgricole Eco News 20100708
European bank stress test as catalyst for a new medium-term uptrend? No!
- "In the short term, the hopes being pinned on a successful bank stress test will improve the chances on an improvement in the sector’s relative performance. The positive medium-term impact on overall market is, however, likely to remain slight, since it can neither change the pending deterioration in the growth dynamic nor defuse the causes of the tensions in the euro zone."
- "The dependence of some national banking systems on funding via the euro system remains high. This points to further potential risks for the equity market because of tensions in EMU."
- "By the end of July, roughly 65% of the S&P 500 companies will report on the development of business in 2Q (Euro STOXX 50: 50%). The earnings estimates for 2010 will likely remain supported; the estimates for 2011 will come under pressure from expected weaker macro data."
- Outlook: "In the coming months, we think weaker macro data will, on balance, result in new lows for the year. Within this picture, however, there is the chance in the coming weeks of a temporarily friendlier trend because of the concentration of (positive) corporate reports on 2Q."
- STOXX Europe 600 sectors: "Financials are stabilizing; ahead of the stress tests we are upgrading Banks and Financial Services from underweight to neutral. At the same time, we are downgrading Travel & Leisure from overweight to neutral, and Construction & Materials from neutral to underweight."
Unicredit Market Outlook 20100708
- "The dependence of some national banking systems on funding via the euro system remains high. This points to further potential risks for the equity market because of tensions in EMU."
- "By the end of July, roughly 65% of the S&P 500 companies will report on the development of business in 2Q (Euro STOXX 50: 50%). The earnings estimates for 2010 will likely remain supported; the estimates for 2011 will come under pressure from expected weaker macro data."
- Outlook: "In the coming months, we think weaker macro data will, on balance, result in new lows for the year. Within this picture, however, there is the chance in the coming weeks of a temporarily friendlier trend because of the concentration of (positive) corporate reports on 2Q."
- STOXX Europe 600 sectors: "Financials are stabilizing; ahead of the stress tests we are upgrading Banks and Financial Services from underweight to neutral. At the same time, we are downgrading Travel & Leisure from overweight to neutral, and Construction & Materials from neutral to underweight."
Unicredit Market Outlook 20100708
The sentiment pendulum swings positive
- The sentiment pendulum swings positive "The past week was marked by a positive reversal in market sentiment, as expectations on the global outlook firmed, with upward growth revisions by the IMF adding to optimism. Central bank rate hikes in the region also indicated policymakers’ confidence in their economic growth prospects."
- Strong growth outturns continue, despite weakening external demand… "The region again posted strong growth indicators, including for Australia (falling unemployment), and Malaysia (industrial production), although economic weakness in Japan persists (machinery orders). The inflation picture remains benign, with the Philippines releasing a lower-than-expected figure for June, and Taiwan posting a higher-than-expected, albeit still tame reading of 1.2% yoy. Over the last weekend, China posted a surprisingly exports outturn for June of 43.9% yoy, showing that external demand is not cooling as much as previously expected."
- …causing central banks to resume monetary tightening "Interest rate hikes in Korea and Malaysia showed that the region’s policymakers are growing more confident in their economies’ growth outlooks. Monetary stances nevertheless remain accommodative,
given risks to the global outlook."
- In the coming week… "China will release a batch of new data for June including inflation and industrial production, and Q2 GDP. Elsewhere in the region, Thailand, the Philippines and Japan will hold monetary policy meetings. We expect the Philippines, Japan, and Thailand to remain on hold, although the latter is signaling rate hikes in the near future."
BBVA Asia Weekly Watch 20100712
- Strong growth outturns continue, despite weakening external demand… "The region again posted strong growth indicators, including for Australia (falling unemployment), and Malaysia (industrial production), although economic weakness in Japan persists (machinery orders). The inflation picture remains benign, with the Philippines releasing a lower-than-expected figure for June, and Taiwan posting a higher-than-expected, albeit still tame reading of 1.2% yoy. Over the last weekend, China posted a surprisingly exports outturn for June of 43.9% yoy, showing that external demand is not cooling as much as previously expected."
- …causing central banks to resume monetary tightening "Interest rate hikes in Korea and Malaysia showed that the region’s policymakers are growing more confident in their economies’ growth outlooks. Monetary stances nevertheless remain accommodative,
given risks to the global outlook."
- In the coming week… "China will release a batch of new data for June including inflation and industrial production, and Q2 GDP. Elsewhere in the region, Thailand, the Philippines and Japan will hold monetary policy meetings. We expect the Philippines, Japan, and Thailand to remain on hold, although the latter is signaling rate hikes in the near future."
BBVA Asia Weekly Watch 20100712
The Return of Sovereign Risk in the Industrialised World
- "The severe deterioration of asset quality in the Western world’s banking system in late 2007 marked the opening act of the financial crisis. The second act of the crisis was the eye-watering drop in global economic activity during 2008 and early 2009, marking the start of the Great Recession. Yawning output gaps combined with falling asset prices and shrinking financial sector profits started to take their toll on public finances. Fiscal positions took a further hit when governments decided to embark on the biggest Keynesian experiment in living memory to prevent the repeat of the Great Depression 2.0. The “Great Rescue” paid off as the world economy has been tiptoeing back from the precipice since mid-2009. But now another danger seems to be lurking on the horizon – a wave of sovereign defaults in the industrialised world. The fear amongst many market participants is that this will mark the third act of this unforgiving crisis."
- "The fact that policymakers continue to remain divided about the timing of exit from loose fiscal policies only adds to investors’ concerns. It seems that we have learnt nothing from the rich history of financial crises. In one camp, policymakers claim that exiting now is necessary to calm market nerves lest interest rates will jump and turn the already bad situation into something far uglier. In the other camp, however, the opponents argue that synchronous exit of governments will do nothing more than strangle the incipient recovery at birth, which may weaken public finances even more."
- "The division between the two camps stems largely from their assumption of private sector recovery going forward. The “exit now” camp expects households and firms to step in as the government leaves the stage while the “exit later” camp believes that such assumption is grossly optimistic. Only time will tell which camp is right. But one thing is for sure, governments are navigating in unchartered waters. Relying too much on private sector strength can ultimately turn into an economic disaster if it proves to be incorrect (much higher unemployment and a paralysed banking system) while remaining complacent might push many sovereigns towards the brink of bankruptcy."
- "Given the amount of uncertainties surrounding both views, we decided to identify the industrialised countries that are most vulnerable to a sovereign debt crisis. In doing so, we look at a number of early warning indicators that have performed reasonably well in the past in predicting impending liquidity and solvency crises. Based on our Sovereign Vulnerability Index (SVI), Italy is the most vulnerable to a debt crisis after Greece mainly because of its strong reliance on foreign investors, relatively high level of corruption and high interest payments. The next countries in line are Portugal, Japan and the US. At the opposite end of the spectrum, the Scandinavian and current account surplus countries seem to be the least vulnerable."
Rabobank Economics Special July2010
- "The fact that policymakers continue to remain divided about the timing of exit from loose fiscal policies only adds to investors’ concerns. It seems that we have learnt nothing from the rich history of financial crises. In one camp, policymakers claim that exiting now is necessary to calm market nerves lest interest rates will jump and turn the already bad situation into something far uglier. In the other camp, however, the opponents argue that synchronous exit of governments will do nothing more than strangle the incipient recovery at birth, which may weaken public finances even more."
- "The division between the two camps stems largely from their assumption of private sector recovery going forward. The “exit now” camp expects households and firms to step in as the government leaves the stage while the “exit later” camp believes that such assumption is grossly optimistic. Only time will tell which camp is right. But one thing is for sure, governments are navigating in unchartered waters. Relying too much on private sector strength can ultimately turn into an economic disaster if it proves to be incorrect (much higher unemployment and a paralysed banking system) while remaining complacent might push many sovereigns towards the brink of bankruptcy."
- "Given the amount of uncertainties surrounding both views, we decided to identify the industrialised countries that are most vulnerable to a sovereign debt crisis. In doing so, we look at a number of early warning indicators that have performed reasonably well in the past in predicting impending liquidity and solvency crises. Based on our Sovereign Vulnerability Index (SVI), Italy is the most vulnerable to a debt crisis after Greece mainly because of its strong reliance on foreign investors, relatively high level of corruption and high interest payments. The next countries in line are Portugal, Japan and the US. At the opposite end of the spectrum, the Scandinavian and current account surplus countries seem to be the least vulnerable."
Rabobank Economics Special July2010
Seven Reasons to Sell Sterling
- "Over the summer the pound has bounced against the dollar. But we believe the risks are to the downside for our end year 1.35 forecast."
- "There are seven reasons to sell sterling. First, the rest of the BOE Monetary Policy Committee is unlikely to join Andrew Sentance in voting for rate hikes. Second, the beneficial impact of last month’s Budget has now been priced into sterling. Third, the scale of the budget cuts forecast for the next four years will undermine growth. Fourth, exports can’t be relied upon to take up the slack. Fifth, the MPC remains willing to resume quantitative easing if the economy weakens. Sixth, tighter fiscal policy and looser monetary policy can result in a much weaker pound as occurred after the 1981 austerity budget. Seventh, other major currencies like the yen have also experienced prolonged weakness when fiscal policy has been tightened during times of economic weakness."
UBS Foreign Exchange Note 20100712
- "There are seven reasons to sell sterling. First, the rest of the BOE Monetary Policy Committee is unlikely to join Andrew Sentance in voting for rate hikes. Second, the beneficial impact of last month’s Budget has now been priced into sterling. Third, the scale of the budget cuts forecast for the next four years will undermine growth. Fourth, exports can’t be relied upon to take up the slack. Fifth, the MPC remains willing to resume quantitative easing if the economy weakens. Sixth, tighter fiscal policy and looser monetary policy can result in a much weaker pound as occurred after the 1981 austerity budget. Seventh, other major currencies like the yen have also experienced prolonged weakness when fiscal policy has been tightened during times of economic weakness."
UBS Foreign Exchange Note 20100712
Under what conditions can quantitative easing (QE) help pull out of deflation?
- "When the economy becomes very weak, short-term interest rates draw close to zero, and monetary policy has to change its instruments and method of action, since interest rates can no longer be cut. Economic literature suggests several approaches:
• a (depreciated) exchange rate target and currency interventions,
• a target of price level, not price growth,
• reduction in long-term interest rates (via central bank purchases of bonds),
• central bank purchases of private-sector securities (quantitative easing or credit easing),
• quantitative easing (increasing the monetary base and banks’ excess reserves)."
- "Some central banks have used foreign exchange interventions (Switzerland); others bond purchases to lower long-term interest rates (United States, United Kingdom, and now the ECB); some qualitative easing (United States, ECB); and all have - explicitly or implicitly - used quantitative easing. But it seems almost inefficient (lack of upturn in credit or in demand via asset prices). This results from the fact that banks are not using their excess reserves, for several reasons."
Natixis Flash Economics 346 20100705
• a (depreciated) exchange rate target and currency interventions,
• a target of price level, not price growth,
• reduction in long-term interest rates (via central bank purchases of bonds),
• central bank purchases of private-sector securities (quantitative easing or credit easing),
• quantitative easing (increasing the monetary base and banks’ excess reserves)."
- "Some central banks have used foreign exchange interventions (Switzerland); others bond purchases to lower long-term interest rates (United States, United Kingdom, and now the ECB); some qualitative easing (United States, ECB); and all have - explicitly or implicitly - used quantitative easing. But it seems almost inefficient (lack of upturn in credit or in demand via asset prices). This results from the fact that banks are not using their excess reserves, for several reasons."
Natixis Flash Economics 346 20100705
Should OECD countries deleverage or should their growth be stimulated?
- "There were two opposing opinions during the G20 in Toronto at the end of June 2010:
• that of countries which want the stimulation of the global economy to be extended (United States, China):
• that of countries which favour deleveraging and a reduction in fiscal deficits (Europe)."
- "First of all, we understand the differences of opinion: the United States and China can stimulate their economies without any difficulty (purchases of Treasuries by non-residents in the United States, efficiency of monetary policy in China, and high potential growth in both cases). This is far more difficult in Europe (low potential growth making it difficult to reduce
indebtedness, sovereign debt crisis) and pressure from financial markets. Fundamentally, we cannot imagine that the economies’ growth will be permanently linked to the rise in the total debt, public (in Europe) and private."
- "At a given moment, the issue of long-term growth (productivity, innovation) must be dealt with, and it should no longer be believed that debt can be the solution if potential growth is insufficient, which makes Europe’s situation very different from that of United States or China."
Natixis Flash Economics 345 20100705
• that of countries which want the stimulation of the global economy to be extended (United States, China):
• that of countries which favour deleveraging and a reduction in fiscal deficits (Europe)."
- "First of all, we understand the differences of opinion: the United States and China can stimulate their economies without any difficulty (purchases of Treasuries by non-residents in the United States, efficiency of monetary policy in China, and high potential growth in both cases). This is far more difficult in Europe (low potential growth making it difficult to reduce
indebtedness, sovereign debt crisis) and pressure from financial markets. Fundamentally, we cannot imagine that the economies’ growth will be permanently linked to the rise in the total debt, public (in Europe) and private."
- "At a given moment, the issue of long-term growth (productivity, innovation) must be dealt with, and it should no longer be believed that debt can be the solution if potential growth is insufficient, which makes Europe’s situation very different from that of United States or China."
Natixis Flash Economics 345 20100705
Japan: Recovery of corporate capex has been lagging
- Recovery of corporate capex has been lagging
• One of the major disappointments on the macroeconomic data front in recent weeks has been the sluggish fixed business investment
• Although many companies have upgraded their profit forecasts amid the improved business conditions, they remain cautious about revising up their investment plans
• The June BOJ Tankan survey revealed only a 0.5% increase in planned capex on an all-firms basis for FY2010; weak sentiment amongst non-manufacturers along with cautiousness on the part of the materials sector appears mainly responsible
- Machinery orders: disappointing
• Core machinery orders decreased for the first time in three month by a large 9.1% mom in May. Orders seem to have bottomed out, but the pace of recovery remains very moderate
• The current account surplus decreased for the first time in four month, by 8.1% yoy in May. While the goods and service surplus continued to expand, the income surplus shrunk in the lower global interest rate environment
- Demand for funds remains weak
• The year-on-year growth in M2 in June slowed down for the first time in three months.
• The year-on-year decline in the balance of bank loans by city banks expanded further in June.
CreditSuisse Japan Economics Weekly 20100708
• One of the major disappointments on the macroeconomic data front in recent weeks has been the sluggish fixed business investment
• Although many companies have upgraded their profit forecasts amid the improved business conditions, they remain cautious about revising up their investment plans
• The June BOJ Tankan survey revealed only a 0.5% increase in planned capex on an all-firms basis for FY2010; weak sentiment amongst non-manufacturers along with cautiousness on the part of the materials sector appears mainly responsible
- Machinery orders: disappointing
• Core machinery orders decreased for the first time in three month by a large 9.1% mom in May. Orders seem to have bottomed out, but the pace of recovery remains very moderate
• The current account surplus decreased for the first time in four month, by 8.1% yoy in May. While the goods and service surplus continued to expand, the income surplus shrunk in the lower global interest rate environment
- Demand for funds remains weak
• The year-on-year growth in M2 in June slowed down for the first time in three months.
• The year-on-year decline in the balance of bank loans by city banks expanded further in June.
CreditSuisse Japan Economics Weekly 20100708
China: Rising wage concern
- "Rising wage pressure is a growing concern for China. Major foreign invested enterprises (FIEs) such as Foxconn and Honda reportedly increased wage by an average of 30%. These numbers are seemingly alarming and will generate some spill-over effects to a certain degree."
- "From a historical perspective, total wages as a share of GDP has persistently fallen from 56% in the early 80s to around 35% in 08. Profit as a share of GDP, on the other hand, shot up rapidly from 20% in mid-90s to 31% in 08. Considering the fact that labor does not share as much as economic prosperity as entrepreneurs during the booming years amidst rising inflationary pressure, a one-off hike of 30% this year seems more like compensating their lost years."
DBS Economics 20100707
- "From a historical perspective, total wages as a share of GDP has persistently fallen from 56% in the early 80s to around 35% in 08. Profit as a share of GDP, on the other hand, shot up rapidly from 20% in mid-90s to 31% in 08. Considering the fact that labor does not share as much as economic prosperity as entrepreneurs during the booming years amidst rising inflationary pressure, a one-off hike of 30% this year seems more like compensating their lost years."
DBS Economics 20100707
EcoWeek
- Overview "Testing for stress"
- Pensions: Doubts about the long-term sustainability of public pension schemes "This week, the European Commission has unveiled a Green Paper on pension reform. It should start a debate on ensuring the long-term sustainability of the pension systems. In the European Union, age-related government spending (as percentage of GDP) is expected to increase by 5.1 percentage points between 2010 and 2060. The countries most at risk are those that have earnings related schemes as part of the public pension systems. In particular citizens in these countries fear that their pension entitlement will be negatively affected by economic and financial events."
- US housing market: a long tunnel "Now that the tax credit scheme has come to an end, the residential real estate market is not showing signs of a solid recovery. In May new homes sales were at an all-time low, with sales of existing homes at a level similar to that in September 2009. Although the strong downward trend in real estate prices that prevailed until the beginning of 2009 is over, no real recovery is under way. However, there are some positive signs. Household real estate purchasing power is quite strong, due to the sharp correction that has already taken place in prices and the very low level of interest rates. And despite weak sales, stocks of new homes have continued to shrink over recent months."
BNPParibas_EcoWeek_20100709
- Pensions: Doubts about the long-term sustainability of public pension schemes "This week, the European Commission has unveiled a Green Paper on pension reform. It should start a debate on ensuring the long-term sustainability of the pension systems. In the European Union, age-related government spending (as percentage of GDP) is expected to increase by 5.1 percentage points between 2010 and 2060. The countries most at risk are those that have earnings related schemes as part of the public pension systems. In particular citizens in these countries fear that their pension entitlement will be negatively affected by economic and financial events."
- US housing market: a long tunnel "Now that the tax credit scheme has come to an end, the residential real estate market is not showing signs of a solid recovery. In May new homes sales were at an all-time low, with sales of existing homes at a level similar to that in September 2009. Although the strong downward trend in real estate prices that prevailed until the beginning of 2009 is over, no real recovery is under way. However, there are some positive signs. Household real estate purchasing power is quite strong, due to the sharp correction that has already taken place in prices and the very low level of interest rates. And despite weak sales, stocks of new homes have continued to shrink over recent months."
BNPParibas_EcoWeek_20100709
Infrastructure investment of pension funds in an international context
- "Infrastructure investments by the private sector have reached a high growth rate in recent decades. Multiple Public-Private Partnerships (PPPs) models have emerged as the key tool to this development."
- "The fact that infrastructure investment projects are of a long term nature, and that there remains a good relationship between profitability/risk observed in many of them, has attracted the attention of pension fund administrators in many countries who have been increasing the weight of this type of investment in their portfolios."
- "However, not all the results have been successful. This type of project is highly complex and requires specialized multidisciplinary teams to study each project after individually, which has made accurate evaluation difficult in some cases. At the same time, there can be numerous limitations in some countries that make pension fund participation difficult. Among other notable problems, there exists the lack of coverage in the face of specific and diverse risks for each project, bureaucratic and regulatory issues."
- "Conversely, in other countries, institutional changes have been made to favour infrastructure private financing, modifying regulation, offering diverse types of warranties and making the processes of awarding of bids more transparent and effective."
- "The private pension funds participation in develop countries has had different kind of funds schemes and cotized and non-cotized companies in the market. However, the basic model is in each one."
- "In this pension watch we will describe the model of private investment in countries outside of Latin America where a greater participation from the private sector has developed in recent years. Specifically, we will review the cases of Australia, the United Kingdom, Canada, the USA and Continental Europe."
BBVA Pension Watch July2010
- "The fact that infrastructure investment projects are of a long term nature, and that there remains a good relationship between profitability/risk observed in many of them, has attracted the attention of pension fund administrators in many countries who have been increasing the weight of this type of investment in their portfolios."
- "However, not all the results have been successful. This type of project is highly complex and requires specialized multidisciplinary teams to study each project after individually, which has made accurate evaluation difficult in some cases. At the same time, there can be numerous limitations in some countries that make pension fund participation difficult. Among other notable problems, there exists the lack of coverage in the face of specific and diverse risks for each project, bureaucratic and regulatory issues."
- "Conversely, in other countries, institutional changes have been made to favour infrastructure private financing, modifying regulation, offering diverse types of warranties and making the processes of awarding of bids more transparent and effective."
- "The private pension funds participation in develop countries has had different kind of funds schemes and cotized and non-cotized companies in the market. However, the basic model is in each one."
- "In this pension watch we will describe the model of private investment in countries outside of Latin America where a greater participation from the private sector has developed in recent years. Specifically, we will review the cases of Australia, the United Kingdom, Canada, the USA and Continental Europe."
BBVA Pension Watch July2010
Readings
The dollar question: Where are we? - VoxEU
European Bank’s Economist Is Optimistic on Sovereign Debt - New York Times
U.S. Says No Country Manipulates Currency, Yuan `Undervalued'- Bloomberg
What is the Threshold For More Fed Action? - Economist's View
What can the Fed do now? - Macro and other Market Musings
What is the current stance of monetary policy? - Macro and other Market Musings
Staring into the abyss - Economist
The Vanishing American Consumer and the Coming Trade War - Robert Reich
Exports Hit Record in China as Trade Gap Surges - New York Times
Pending Homes Sales Crash in a Record Fall to a Record Low - Housing Story
Goldman's Silent Board - Bloomberg
How To Exit Liquidity Traps - Real Clear Markets
Ahead of a Busy Week - Tim Duy
Germans Deaf to U.S.`Nonsense' as Exports Power Growth - Bloomberg
European Bank’s Economist Is Optimistic on Sovereign Debt - New York Times
U.S. Says No Country Manipulates Currency, Yuan `Undervalued'- Bloomberg
What is the Threshold For More Fed Action? - Economist's View
What can the Fed do now? - Macro and other Market Musings
What is the current stance of monetary policy? - Macro and other Market Musings
Staring into the abyss - Economist
The Vanishing American Consumer and the Coming Trade War - Robert Reich
Exports Hit Record in China as Trade Gap Surges - New York Times
Pending Homes Sales Crash in a Record Fall to a Record Low - Housing Story
Goldman's Silent Board - Bloomberg
How To Exit Liquidity Traps - Real Clear Markets
Ahead of a Busy Week - Tim Duy
Germans Deaf to U.S.`Nonsense' as Exports Power Growth - Bloomberg
FX Strategy Weekly
- "Stronger than forecast employment data from Australia and Canada along with short
covering in risk assets boosted the AUD, CAD, NZD and NOK, but doubts over momentum
have not disappeared as markets square up to the first reports of US Q2 company earnings. With market positioning still overwhelmingly short EUR, we look for bearish EURtrends eventually to be reasserted on profit taking ahead of July 23, release date of the bank stress tests. Correlation with risk assets remains elevated for higher yield and commodities currencies, but with the balance tipping in favour of a second rate hike by the Bank of Canada later this month, the CAD looks well placed to resume its upward move vs the AUD. The prospect of a 7th drop in the UK claimant count rate in June may neutralise this month’s rally in EUR/GBP. Greece will tap the capital markets on Tuesday."
- "A rally in global equities propelled the AUD to the top of the G10 ranking, helping the
currency to log a 4.7% gain vs the JPY, a 4.4% gain vs GBP and a 4% profit vs the USD. GBP
fell against all G10 peers, but losses were limited to 1.3% vs the EUR and 0.7% vs the USD.
The weakness in sterling was partially attributed to the compression in UK/G10 yields.
UK/EU 2y benchmark yields fell into negative territory for the first time since February. The
unwinding of safe haven flows put the JPY at the bottom of the G10 table, with losses
ranging between 5% vs the AUD to 0.4% vs GBP, despite the report of record JGB buying
by China in May and a 0.5% upward revision by the IMF to Japan’s 2010 growth outlook."
- "UK economic data came up short of expectations this week for most of the releases,
except for the bullish report by the NIESR on Q2 GDP. The NIESR estimates that the
economy expanded by 0.7% q/q in Q2, down from an upward revised 0.9% in Q1. The BoE left Bank rate and the APF unchanged at 0.50% and £200bln, respectively. The services PMI slipped to 54.4 in June from 55.4 in May, marking a 3rd drop in 4 months. The global trade deficit widened to £8.0bln in May, a 3-month high as imports rose 2.4% to £29.5bln, the highest since Jul-08. Industrial output rose a stronger than forecast 0.7% m/m in May, and PPI output price inflation slowed to 5.1% in June vs 5.7% in May (core up to 4.8%)."
- "A mixed week for UK rates but overall yields stayed within the tight recent ranges and
close to the cycle lows observed since mid-May. 5y swaps finished the week at 2.44% and
10y yields dropped back to 3.32% following a very solid session on Friday post weaker PPI
and trade data. The prospect of lower June CPI data next week could bring the prospect of new lows and a bull flattening of the 2y/10y curve. The 3mth Libor/Ois spread narrowed a fraction to 22.5bp. EUR libor/Ois also tightened to 27bp (-5bp). The 2020 gilt sale drew very solid demand and was covered 2.45 times (0.2bp tail)."
LloydsTSB FX Strategy Weekly 20100709
covering in risk assets boosted the AUD, CAD, NZD and NOK, but doubts over momentum
have not disappeared as markets square up to the first reports of US Q2 company earnings. With market positioning still overwhelmingly short EUR, we look for bearish EURtrends eventually to be reasserted on profit taking ahead of July 23, release date of the bank stress tests. Correlation with risk assets remains elevated for higher yield and commodities currencies, but with the balance tipping in favour of a second rate hike by the Bank of Canada later this month, the CAD looks well placed to resume its upward move vs the AUD. The prospect of a 7th drop in the UK claimant count rate in June may neutralise this month’s rally in EUR/GBP. Greece will tap the capital markets on Tuesday."
- "A rally in global equities propelled the AUD to the top of the G10 ranking, helping the
currency to log a 4.7% gain vs the JPY, a 4.4% gain vs GBP and a 4% profit vs the USD. GBP
fell against all G10 peers, but losses were limited to 1.3% vs the EUR and 0.7% vs the USD.
The weakness in sterling was partially attributed to the compression in UK/G10 yields.
UK/EU 2y benchmark yields fell into negative territory for the first time since February. The
unwinding of safe haven flows put the JPY at the bottom of the G10 table, with losses
ranging between 5% vs the AUD to 0.4% vs GBP, despite the report of record JGB buying
by China in May and a 0.5% upward revision by the IMF to Japan’s 2010 growth outlook."
- "UK economic data came up short of expectations this week for most of the releases,
except for the bullish report by the NIESR on Q2 GDP. The NIESR estimates that the
economy expanded by 0.7% q/q in Q2, down from an upward revised 0.9% in Q1. The BoE left Bank rate and the APF unchanged at 0.50% and £200bln, respectively. The services PMI slipped to 54.4 in June from 55.4 in May, marking a 3rd drop in 4 months. The global trade deficit widened to £8.0bln in May, a 3-month high as imports rose 2.4% to £29.5bln, the highest since Jul-08. Industrial output rose a stronger than forecast 0.7% m/m in May, and PPI output price inflation slowed to 5.1% in June vs 5.7% in May (core up to 4.8%)."
- "A mixed week for UK rates but overall yields stayed within the tight recent ranges and
close to the cycle lows observed since mid-May. 5y swaps finished the week at 2.44% and
10y yields dropped back to 3.32% following a very solid session on Friday post weaker PPI
and trade data. The prospect of lower June CPI data next week could bring the prospect of new lows and a bull flattening of the 2y/10y curve. The 3mth Libor/Ois spread narrowed a fraction to 22.5bp. EUR libor/Ois also tightened to 27bp (-5bp). The 2020 gilt sale drew very solid demand and was covered 2.45 times (0.2bp tail)."
LloydsTSB FX Strategy Weekly 20100709
Motion sickness
- "2H growth forecast lowered for US and Japan; EM Asia likely to follow"
- "Reduction in risk appetite tempering recovery in final demand"
- "Asia slowing in response to China tightening and waning inventory cycle"
- "Expecting increased bank funding stress to damp activity in Europe"
JPMorgan Global Data Watch
- "Reduction in risk appetite tempering recovery in final demand"
- "Asia slowing in response to China tightening and waning inventory cycle"
- "Expecting increased bank funding stress to damp activity in Europe"
JPMorgan Global Data Watch
Recession? Probably not
- Macro viewpoint: Recession? Probably not "We explore a number of potential indicators of a future downturn by estimating a series of recession probability models. These catalog the ability of one or more indicators to accurately signal recessions in the past, and then ask what chance of a near-term recession they predict today. These simple and oft-used models can help to identify not only how strongly some indicators point toward a possible double dip, but also which suffer from limited accuracy or false positives."
- Fed watch: Fade the hawks … still "One recurring theme over the past year has been the outsized voice of the more hawkish FOMC members relative to their voting clout. This week was no exception, with three different members – but only one voter – expressing their displeasure with some aspect of current or prospective Fed policy. So, let us repeat a core message once again: fade the hawks on the FOMC."
- The week ahead: Core retail sales up; inflation subdued "Next week brings with it the inflation trifecta: import prices, producer prices, and consumer prices. Of those three measures we give the most weight to consumer prices and we are expecting goose-eggs on the headline and core measures. On Wednesday, retail sales data are released for June. While we expect a negative print on the headline, the core retail control measure, which provides us with a better sense of the trend in consumer spending, is expected to post a respectable 0.3% MoM gain."
Merrill Lynch US Economic Weekly 20100709
- Fed watch: Fade the hawks … still "One recurring theme over the past year has been the outsized voice of the more hawkish FOMC members relative to their voting clout. This week was no exception, with three different members – but only one voter – expressing their displeasure with some aspect of current or prospective Fed policy. So, let us repeat a core message once again: fade the hawks on the FOMC."
- The week ahead: Core retail sales up; inflation subdued "Next week brings with it the inflation trifecta: import prices, producer prices, and consumer prices. Of those three measures we give the most weight to consumer prices and we are expecting goose-eggs on the headline and core measures. On Wednesday, retail sales data are released for June. While we expect a negative print on the headline, the core retail control measure, which provides us with a better sense of the trend in consumer spending, is expected to post a respectable 0.3% MoM gain."
Merrill Lynch US Economic Weekly 20100709
US Rate & MBS Strategy
- "Stay Short Duration: We expect 10yr yields to climb back towards 3.25%."
- "Strong TIPS Auction: The 10yr TIPS auction was exceptionally strong this week despite rising TIPS issuance and real yields near recent lows. This bodes well for post-auction performance of TIPS."
- "Long-Vol Should Rise Due to Legislation: Supply shock in long-dated vol stemming from legislation could total 20mm bp-vega, and be worth 20- 25bp/annum gradually over 5 years."
- "Go Up-In-Coupon in Agency MBS: With the Fed’s coupon swap program effectively done, high coupons look attractive based on carry, convexity, and supply shifts."
- "Agency Debt: Callable redemptions have been extremely high, and we expect this to continue with 83% of eligible callables to be redeemed in the base case."
- "US Rate Strategy Model Portfolio: The portfolio is currently up 0.5% month-todate."
Citigroup US Rate MBS Strategy Weekly 20100709
- "Strong TIPS Auction: The 10yr TIPS auction was exceptionally strong this week despite rising TIPS issuance and real yields near recent lows. This bodes well for post-auction performance of TIPS."
- "Long-Vol Should Rise Due to Legislation: Supply shock in long-dated vol stemming from legislation could total 20mm bp-vega, and be worth 20- 25bp/annum gradually over 5 years."
- "Go Up-In-Coupon in Agency MBS: With the Fed’s coupon swap program effectively done, high coupons look attractive based on carry, convexity, and supply shifts."
- "Agency Debt: Callable redemptions have been extremely high, and we expect this to continue with 83% of eligible callables to be redeemed in the base case."
- "US Rate Strategy Model Portfolio: The portfolio is currently up 0.5% month-todate."
Citigroup US Rate MBS Strategy Weekly 20100709
The risk of "wasting savings" is even greater than before the crisis
- "We use the term "waste of savings" for a situation where countries’ savings are not used to finance useful investments that could generate long-term growth."
- "In fact:
• in Europe, before the crisis, savings financed productive investment and (unfortunately in certain cases) housing investment; in the wake of the crisis, they have financed fiscal deficits;
• in Japan, savings continue to finance the fiscal deficit;
• in the United States, the shortfall in savings (total and household) remains significant;
• prior to the crisis, the excess savings in emerging and oil-exporting countries financed the US and also the UK external deficits, i.e. to a large extent the household borrowing requirement. Since the crisis, they have financed these countries’ fiscal deficits, and perhaps households in the United States once more."
- "The share of savings that finances productive investments in OECD countries is therefore even lower after the crisis than before."
Natixis Flash Economics 344 20100702
- "In fact:
• in Europe, before the crisis, savings financed productive investment and (unfortunately in certain cases) housing investment; in the wake of the crisis, they have financed fiscal deficits;
• in Japan, savings continue to finance the fiscal deficit;
• in the United States, the shortfall in savings (total and household) remains significant;
• prior to the crisis, the excess savings in emerging and oil-exporting countries financed the US and also the UK external deficits, i.e. to a large extent the household borrowing requirement. Since the crisis, they have financed these countries’ fiscal deficits, and perhaps households in the United States once more."
- "The share of savings that finances productive investments in OECD countries is therefore even lower after the crisis than before."
Natixis Flash Economics 344 20100702
EM Recommendations
- "So far, the emerging markets have done very well in 2010. The benchmarks for both hard- (EMBI) and local- (GBI) currency bonds posted positive returns; EMBI and GBI posted returns of 5.56% and 18.83%, respectively, for the first six months of 2010. We are still positive about the asset class, although we do not expect the second half of the year to proceed at the same pace as the first half. We admit that the ongoing turmoil in relation to the debt problems of the euro zone constitutes a risk, particularly for the Eastern European countries. The public debt and budget deficits of the emerging-market countries are generally much lower. Therefore the emerging-market countries are not nearly as vulnerable as the PIIGS countries (Portugal, Ireland, Italy, Greece and Spain). For the short term, however, there is a risk that Eastern Europe underperforms the other emergingmarket regions. Read more here. Provided that the cooperation between Greece and the EU/the IMF proceeds successfully, we see no reason to reduce exposure to emerging-market bonds. However, investors who overweight Central and Eastern Europe may consider reducing their exposure to the benefit of other emergingmarket regions. Investors should also take into consideration the mounting concern over global growth, the possibility of further intervention in the market (such as the 2 % tax in Brazil and Colombia’s sale of pesos), and the exit strategies from the very relaxed fiscal- and monetary policies pursued around the globe. This publication gives you an overview of our recommendations for local-currency bonds."
JyskeBank EM Recommendations 20100708
JyskeBank EM Recommendations 20100708
The spectre of structural unemployment
- "The week has been dominated by discussions of European banking-sector stress tests and
the publication of the results on July 23. We now know that 91 banks will be in the spotlight, but we have little detail on the underlying test assumptions and, in particular, on the simulated shocks to sovereign bond portfolios. Today’s ECB press conference provided little further
information, despite a battery of stress-testrelated questions. On other matters, the ECB
appears to believe that money market tensions have, if anything, eased, and is not particularly concerned (rightly so, in our view) about the market-led liquidity withdrawal witnessed in July, or the rate implications thereof. The ECB also expressed a neutral view on the strength of
the recovery."
- "For the recovery to become sustainable, labour markets need to stabilise so that consumer confidence can be restored. This week we discuss the cyclical versus structural aspects of the unemployment picture. While it looks as if employment contraction has stabilised, the divergence in unemployment rates across European economies is now at historical highs. In some countries, short-term working-time arrangements have shifted the labour market
adjustment away from job cuts towards more flexible hours worked. Heterogeneous
macroeconomic exposures to harder-hit sectors such as construction and industry have also played a role. We find that there is a non-negligible risk that hard-hit countries such as Spain and Ireland are heading towards an increase in structural—as opposed to merely cyclical—unemployment. However, the Euro-zone as a whole seems to be shielded from an acute and persistent skills mismatch."
GoldmanSachs European Weekly Analyst 20100708
the publication of the results on July 23. We now know that 91 banks will be in the spotlight, but we have little detail on the underlying test assumptions and, in particular, on the simulated shocks to sovereign bond portfolios. Today’s ECB press conference provided little further
information, despite a battery of stress-testrelated questions. On other matters, the ECB
appears to believe that money market tensions have, if anything, eased, and is not particularly concerned (rightly so, in our view) about the market-led liquidity withdrawal witnessed in July, or the rate implications thereof. The ECB also expressed a neutral view on the strength of
the recovery."
- "For the recovery to become sustainable, labour markets need to stabilise so that consumer confidence can be restored. This week we discuss the cyclical versus structural aspects of the unemployment picture. While it looks as if employment contraction has stabilised, the divergence in unemployment rates across European economies is now at historical highs. In some countries, short-term working-time arrangements have shifted the labour market
adjustment away from job cuts towards more flexible hours worked. Heterogeneous
macroeconomic exposures to harder-hit sectors such as construction and industry have also played a role. We find that there is a non-negligible risk that hard-hit countries such as Spain and Ireland are heading towards an increase in structural—as opposed to merely cyclical—unemployment. However, the Euro-zone as a whole seems to be shielded from an acute and persistent skills mismatch."
GoldmanSachs European Weekly Analyst 20100708
Reading Macro Themes from Equity Markets
- "As the second half of 2010 unfolds and we survey the uncertain macroeconomic outlook
ahead, it is especially important to listen closely to the macro messages from financial markets. The macro outlook that is implicitly priced by various asset markets is an
important input into our macro and market views, and helps us to better understand the
tactical macro landscape."
- "Fixed income and FX markets have traditionally been most comfortable with this type of macro conversation. But we have found that the equity market—although less straightforwardly macro—has a potentially rich set of information that can be mined for
its macro content. Over the last several years, aided by our Wavefront models, we have
developed a ‘vocabulary’ around the equity market and its pricing of macro risks."
- "We are also launching today the International Macro Equity Monitor (IMEM), a short weekly publication presenting metrics based on our suite of Wavefront models, which aims to explain the interplay between macroeconomic forces and equity market dynamics both at the industry level within the US equity market and globally across a wide range of country-level
indices."
- "Turning to the current state of affairs, as the Global Markets group has discussed recently,
the most salient and emerging feature of the macro landscape has been the turn in the global cycle, as accelerating growth has given way to a bit of a slowdown. Cyclical equities in the US and Europe have reflected this as equity market growth views have been downgraded sharply. Given this, it is striking that global growth views in the equity market are more resilient, and (outside of China) EM outperformance is a re-emerging theme."
GoldmanSachs Global Economics Weekly 20100707
ahead, it is especially important to listen closely to the macro messages from financial markets. The macro outlook that is implicitly priced by various asset markets is an
important input into our macro and market views, and helps us to better understand the
tactical macro landscape."
- "Fixed income and FX markets have traditionally been most comfortable with this type of macro conversation. But we have found that the equity market—although less straightforwardly macro—has a potentially rich set of information that can be mined for
its macro content. Over the last several years, aided by our Wavefront models, we have
developed a ‘vocabulary’ around the equity market and its pricing of macro risks."
- "We are also launching today the International Macro Equity Monitor (IMEM), a short weekly publication presenting metrics based on our suite of Wavefront models, which aims to explain the interplay between macroeconomic forces and equity market dynamics both at the industry level within the US equity market and globally across a wide range of country-level
indices."
- "Turning to the current state of affairs, as the Global Markets group has discussed recently,
the most salient and emerging feature of the macro landscape has been the turn in the global cycle, as accelerating growth has given way to a bit of a slowdown. Cyclical equities in the US and Europe have reflected this as equity market growth views have been downgraded sharply. Given this, it is striking that global growth views in the equity market are more resilient, and (outside of China) EM outperformance is a re-emerging theme."
GoldmanSachs Global Economics Weekly 20100707
Housing Falters after the Tax Credit Expires
- "The reduced supply of new homes for sale is one of the steps necessary to bring the market into balance."
- "With distressed sales likely counting for a larger proportion of home sales during the second half of this year, we will likely see some renewed pressure on home prices."
Wells Fargo Special Commentary 20100709
- "With distressed sales likely counting for a larger proportion of home sales during the second half of this year, we will likely see some renewed pressure on home prices."
Wells Fargo Special Commentary 20100709
Global: Growth is bound to slow - but by how much?
- "Growth is bound to slow down in the second half of 2010, as the balance between tailwinds and headwinds turns less favourable."
- "The key question though is how much will growth slow. We still don’t expect growth to go below potential growth over the coming quarters, but a pick-up in employment soon and no new setbacks in financial markets are key assumptions behind this forecast."
- "Should current headwinds get stronger we will have to re-evaluate our outlook."
DenDanske Research 20100709
- "The key question though is how much will growth slow. We still don’t expect growth to go below potential growth over the coming quarters, but a pick-up in employment soon and no new setbacks in financial markets are key assumptions behind this forecast."
- "Should current headwinds get stronger we will have to re-evaluate our outlook."
DenDanske Research 20100709
Not facing a double dip
- Reversal. "Sentiment has turned. While confidence had still dominated until recently, growth concerns are now spreading. The catalyst was poor US economic numbers combined with the expected retarding effects of the European-wide austerity policy measures. Some economists even expect the economy to slide back into recession."
- Assessment. "Just as we did not share the previous euphoria, we do not subscribe to the fears of the double-dip scenario. True, the leading indicators around the globe are heading south, while the impulses from the inventory cycle and the national fiscal spending programs are expiring and will soon become a drag. The pace of growth will therefore moderate, but
probably nothing more than that."
- US. "The worst recession since WW II in the aftermath of the Lehman collapse alone argues against a double-dip recession. Employment and fixed capital investment fell so low that a renewed, sustained contraction is scarcely possible. Furthermore, the administration is making the economy its top priority as it faces mid-term congressional elections in November.
GDP growth should not fall below an annual rate of 2%."
- Europe. "EMU-wide austerity measures will shave 0.6-0.7 of a percentage point off GDP growth in 2011. This, however, will be matched by the positive impulses from this year's EUR depreciation. Nevertheless, economic growth should moderate over the next few quarters to an annual rate of 1%-1¼%. The pendulum is swinging back even more pronounced in Germany. This is suggested by the new orders-to-stock ratio, one of the best global leading indicators. But as in the US, the downside risks in Europe cannot be ignored."
Unicredit Friday Notes 20100709
- Assessment. "Just as we did not share the previous euphoria, we do not subscribe to the fears of the double-dip scenario. True, the leading indicators around the globe are heading south, while the impulses from the inventory cycle and the national fiscal spending programs are expiring and will soon become a drag. The pace of growth will therefore moderate, but
probably nothing more than that."
- US. "The worst recession since WW II in the aftermath of the Lehman collapse alone argues against a double-dip recession. Employment and fixed capital investment fell so low that a renewed, sustained contraction is scarcely possible. Furthermore, the administration is making the economy its top priority as it faces mid-term congressional elections in November.
GDP growth should not fall below an annual rate of 2%."
- Europe. "EMU-wide austerity measures will shave 0.6-0.7 of a percentage point off GDP growth in 2011. This, however, will be matched by the positive impulses from this year's EUR depreciation. Nevertheless, economic growth should moderate over the next few quarters to an annual rate of 1%-1¼%. The pendulum is swinging back even more pronounced in Germany. This is suggested by the new orders-to-stock ratio, one of the best global leading indicators. But as in the US, the downside risks in Europe cannot be ignored."
Unicredit Friday Notes 20100709
Brazilian presidential elections - What should we expect?
- "Brazil has come a very long way since the 2002 presidential elections that almost pushed the country into default. This year’s presidential elections will be contested by two candidates with broadly similar views of how to manage the economy, making the elections a relative non-event – at least from a short-term market point of view. If the next government succeeds in implementing a medium-term fiscal adjustment (a big “if”), there is no reason why Brazil won’t be able to achieve 6% growth. This might go some way in silencing some of the critics who believe that Brazil does not belong in the BRICs."
DeutscheBank Talking Point 20100709
DeutscheBank Talking Point 20100709
Positioning risk on EUR/USD eases
- "The latest IMM data cover the week from 29 June to 6 July."
- "During the week covered by the latest IMM positioning data, USD has weakened more than 2% in effective terms, with EUR/USD breaking well above 1.26 in summer-thin trading and with USD/JPY dropping below 87. The broad-based USD weakening has coincided with speculative investors trimming their net long USD positions, primarily by paring short EUR positions. While speculative market participants remain short EUR, positioning is now less extreme than previously and directional risk from a position squeeze arguably less one-sided."
- "Speculative investors have continued to add to their long JPY positions. With net longs
approaching 30% of open interest, upside risks in USD/JPY are emanating from the significant JPY long positions."
- "The commodity currencies suffered during the time period covered by the IMM data as risk appetite was under pressure, causing speculative investors to scale back long positions in AUD and CAD. However, since then, market sentiment has improved and both AUD and CAD have received support from exceptionally strong employment reports. With money markets pricing in more future rate hikes from the RBA and the BoC, speculative investor interest in AUD and CAD looks bound to resume."
DenDanske IMM Positioning 20100712
- "During the week covered by the latest IMM positioning data, USD has weakened more than 2% in effective terms, with EUR/USD breaking well above 1.26 in summer-thin trading and with USD/JPY dropping below 87. The broad-based USD weakening has coincided with speculative investors trimming their net long USD positions, primarily by paring short EUR positions. While speculative market participants remain short EUR, positioning is now less extreme than previously and directional risk from a position squeeze arguably less one-sided."
- "Speculative investors have continued to add to their long JPY positions. With net longs
approaching 30% of open interest, upside risks in USD/JPY are emanating from the significant JPY long positions."
- "The commodity currencies suffered during the time period covered by the IMM data as risk appetite was under pressure, causing speculative investors to scale back long positions in AUD and CAD. However, since then, market sentiment has improved and both AUD and CAD have received support from exceptionally strong employment reports. With money markets pricing in more future rate hikes from the RBA and the BoC, speculative investor interest in AUD and CAD looks bound to resume."
DenDanske IMM Positioning 20100712
Subscribe to:
Posts (Atom)
