Tuesday , September 21 2021
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Tag Archives: EU

Australia and New Zealand Move in Opposite Directions

Overview: The energy complex has become a key focus, with Brent oil holding above $75 and WTI above $72.  Natural gas, which reached seven-year highs yesterday, is giving back around half of yesterday's 3.8% rally.  Rising energy prices play on fears of stagflation and also aggravate supply chain challenges.  Meanwhile, China's Evergrande restructuring and the crackdown on casinos continue to sap the strength of mainland and Hong Kong equities.  Most major bourses in the region, with the...

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How (Not) to Win Friends and Influence People

Overview:  There are two big themes in the capital markets today.  The first is the ongoing push of the Chinese state into what was the private sector.  Today's actions involve breaking Ant's lending arms into separate entities, with the state taking a stake.  This weighed on Chinese shares and Hong Kong, where many are listed. On the other hand, Japanese markets extended their recent gains. The Nikkei, for example, has fallen once in the past 10 sessions.  South Korea and Australia's...

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The Great Game on the Anniversary of the End of Bretton Woods

August 15 is the 50th anniversary of the end of Bretton Woods, when the US unilaterally ended the last formal linkages between the dollar and gold.  Nixon ushered in the modern era, even if he did not intend to do so.  The only thing that seemed pertinent at the time was that the US did not want to part with any more of its gold, and Nixon feared a recession that would undermine his chances for getting re-elected in 1972. The main demand for US gold was not coming from the Soviet Union or...

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US Prices Back to Center Stage in the Week Ahead

The main contours of the investment climate have not changed.  The evolution of the virus is seeing the re-introduction of social restrictions, extending lockdowns (e.g., Sydney), and prolonging formal emergencies (Japan). The return to the office in the US is being postponed for many companies.  Confidence in mass transportation will likely take longer to return.  The direct economic impact is difficult to tease out of the data.  This could, at least, in part, be due to the lags in economic...

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Strong Gains in US CPI and PPI Don’t Stop the Bond Market Rally

Overview: Strong inflation prints this week have not prevented the long-term US interest rates from tumbling.  The 10-year yield is about 10 bp lower than where it closed on Tuesday after the lackluster 30-year auction.  The 30-year yield itself is 11 bp lower.   Fed Chair Powell did not break new ground yesterday and insisted that the bar of "significant further progress" has not been met to begin reducing its bond purchases.   A possible deal in OPEC saw a sharp drop in crude oil prices,...

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US Jobs and OPEC+ Day

Overview: The US jobs report and OPEC+ decision are awaited.  The dollar remains bid.  Only the yen and Canadian dollar are showing a hint of resilience, though, on the week, the Scandis and dollar-bloc currencies are off between around 1-2%.   The greenback is also firmer against the emerging market currency complex, and the JP Morgan index is off for the sixth consecutive session.  The Brazilian real is the strongest currency in the world last month and is leading this week's losses with a...

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Tokyo Escapes Deflation, Leaving the Greenback Trapped between Two Expiring Options against the Yen

Overview: New record highs in the S&P 500 and NASDAQ yesterday helped lift most Asia Pacific markets today.  China and Hong Kong led the regional gains and were sufficient to lift the MSCI regional benchmark to halt a two-week drop.  European equities are little changed but will rise for the fifth week in the past six, barring a sharp sell-off ahead of the weekend.  US indices' futures are firm.  The bond market is quiet.  The US 10-year benchmark is hovering around 1.48%, little changed...

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Dollar Becalmed as Markets Wait for US Leadership

Overview: The short squeeze that lifted the US dollar ahead of the weekend has seen limited follow-through buying, and instead a consolidative tone emerged.  Europe is searching for direction and perhaps waiting for US leadership after a quiet Asia Pacific session, with several centers closed for holiday today (China, Hong Kong, Taiwan, and Australia).  Japanese and South Korean equities advanced.  Europe's Dow Jones Stoxx 600 is up for the seventh consecutive session.  Gains in information...

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Now What Does Bitcoin say About the Dollar and the US?

Overview: A setback in commodities and technology are roiling equity markets today.  The inability of US equities to sustain yesterday's rally provided an initial headwind to trading in the Asia Pacific region today.  Hong Kong and South Korea markets were closed for holidays, but most of the bourses fell, led by Australia, where the market tumbled nearly 2%, the most in almost three months as the drop in mining and energy took a toll.  Europe's Dow Jones Stoxx 600 gapped lower, and...

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10/5/21: COVID19: Nordics v Sweden

Updating data on comparatives between Sweden (the 'natural experiment' for 'Covid19 is just a flu' crowd, albeit the pandemic was not treated as such in the country itself) and the Nordics.Note: I define three groups of 'Nordics' by composition.First, for completeness: case counts:The above is self-explanatory, but open to arguments concerning diagnostics and tests accuracy. Hence, let's take a look at deaths counts, which are much harder to 'fudge' for the 'Covid19 is a flu' crowd:In simple...

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