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Tag Archives: Italy

A Time Recession

Eurostat confirmed earlier today that Europe has so far avoided recession. At least, it hasn’t experienced what Economists call a cyclical peak. During the third quarter of 2019, Real GDP expanded by a thoroughly unimpressive +0.235% (Q/Q). This was a slight acceleration from a revised +0.185% the quarter before. The real question, though, is whether the business cycle approach means anything in this day and age. I don’t think it does, and that’s a big part of why there’s so much confusion...

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Politics Dominate Start of the Week before Yielding to Policy and Economics

Overview: The pre-weekend rally in US shares, with the S&P 500 flirting with record highs and the back-up in US yields, set the tone for Asia Pacific trading earlier today. Nearly all the equity markets advanced, and bond yields rose. Europe's Dow Jones Stoxx 600 took a five-day advancing streak into this week, but shares are struggling to sustain the upside momentum. US stocks are trading a little firmer in Europe. Benchmark yields have continued to rise, and the US 10-year yield...

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Talking and Fighting in the Week Ahead

Equity markets and the US dollar closed last week and August on a firm note.  Ahead of the weekend, the dollar rose to new highs for the year against the euro, Swedish krona, Norwegian krone, and the New Zealand dollar.  While the next set of US and Chinese tariffs start September 1, the market is making the most of the lull. At the same time, US and Chinese officials probe each other to see if sufficient disruption has been felt to force concessions.  Talking and fighting are not...

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Johnson Faces Legal Challenges and Conte may be Given an Extension

Overview:  The capital markets are calm today, though there does seem to be some optimism creeping back into the market.  The Chinese yuan strengthened, snapping a ten-day slide and Italian bank shares index has risen by more than 1% for the fourth consecutive session.  The safe-haven yen and Swiss franc are softer.  In fact, the dollar is rising against the Swiss franc for the fourth straight session, which if sustained, would be the longest streak in several months.  Asia Pacific...

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Realism Fights Back After Hope Dominated Yesterday

Overview:  Hope triumphed over realism yesterday, and realism is fighting back toward.  Asia Pacific markets, however, traded on the echo from the recovery in North America on Monday.  The MSCI Asia Pacific recouped part of yesterday's drop, led by Chinese markets.  Hong Kong was the main exception.  The enthusiasm faded by the European morning and the Dow Jones Stoxx is threating a fourth consecutive losing session, dragged down by communication, consumer staples, and health care...

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Market has Second Thoughts on Magnitude of Fed Cuts Ahead of Powell

Overview:  Powell speech at Jackson Hole stands before the weekend.  Equities in Asia and Europe are finishing the week on a firm tone.  Most markets in the Asia Pacific region closed higher today, and the MSCI Asia Pacific Index snapped a four-week slide.  European bourses are edging higher, and the Dow Jones Stoxx 600 is poised to end its three-week air pocket.  US shares are higher in European trading and barring a reversal in the North American session, the S&P 500 will finish...

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European Stocks Snap Back, Market Hopeful Italian Election can be Delayed

Outlook:  The end of the US equity three-day advance yesterday weighed on Asia Pacific shares today.  Most benchmarks fell.  Better than expected trade data helped Thailand buck the trend.  A firmer tone emerged in the European morning, and the Dow Jones Stoxx 600 has recouped yesterday's losses and more.  It was led higher by consumer discretionary, energy, and industrials.  US shares are also trading firmer today, and the S&P 500 is also retracing a good part of yesterday's 0.8%...

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Europe’s Further Confirmation(s)

The key takeaway from Europe’s economic data dump today isn’t that the whole Continental economy is poised on the verge of recession, though that’s thrust of what’s being written about most. The reason is simple; this is all highly unexpected in the mainstream. Going by official accounts alone, there was never a hint of trouble before just recently. And many still believe this is all just overreacting. Mario Draghi like Jay Powell made his final hawkish move in December 2018. He actually made...

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Yen Remains Bid, While Macri’s Loss in Argentina Weighs on Struggling Mexican Peso

Overview:  China again tried to temper the downside pressure on the yuan, and this appears to be helping the risk-taking attitude.  Many centers in Asia were closed today, including Japan and India, though most of the other equity markets advanced modestly, including China, Korea, and Australia.  Europe's Dow Jones Stoxx 600 opened firmer but is staddling little changed levels unable to stain any upside momentum.  Italian equities, including bank shares, are struggling to stabilize after...

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Macro Deterioration

The US-China tensions remain the dominant driver of investor risk appetites.  President Trump has repeatedly accused China of manipulating its currency on twitter, and finally Treasury Secretary Mnuchiin acquiesced after China failed to prevent the dollar from rising above CNY7.0.  China set the reference rate for the dollar lower than models based on the basket the PBOC uses implied for the past three sessions, and this helped stabilize the situation. Contrary to expectations, China...

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