Greetings, United Kingdom: Despite some growth headwinds, the BoE tilted more hawkish this week. The central bank is signaling a rate hike in the “medium term.” The BoE’s statement follows the Fed’s hawkish dot-plot and taper announcement a day earlier. United States: The fiscal stimulus helped. Eurozone: Growth in business activity slowed …
Continue reading “The Daily Shot Brief – September 24th, 2021”
Greetings, United States: The FOMC acknowledged the recent pandemic-induced economic slowdown but signaled the beginning of taper (probably in November). Moreover, Jerome Powell expects to complete tapering by mid-2022 (some analysts expected the Fed to reduce its purchases more gradually). Here is the September FOMC statement compared to the previous one. With more Committee …
Continue reading “The Daily Shot Brief – September 22nd, 2021”
Greetings, United States: Despite some recent talk of a pause in the housing market, high-frequency data from Redfin shows demand near multi-year highs. United Kingdom: Will industrial production follow? Eurozone: Barclays expects economic activity to return to pre-crisis levels next quarter, in line with the ECB. China: The PBoC injected more …
Continue reading “The Daily Shot Brief – September 22nd, 2021”
Greetings, China: Debt of leveraged property companies remains under pressure. However, analysts doubt that the property debt crunch is China’s “Lehman moment.” Emerging Markets: Hedge funds have been buying EM currencies in recent weeks. Equities: Other US domestic issues also pose risks, including tech regulation and a potential surprise from the Fed …
Continue reading “The Daily Shot Brief – September 21st, 2021”
Greetings, Equities: Global sentiment is decidedly in risk-off mode, partly driven by credit developments in China. The Hang Seng Index is down 3.5%. Credit: M&A transaction volumes have surged over the past year, boosting debt levels. Corporate debt as a percent of GDP remains far above highs seen in previous cycles (2 charts). …
Continue reading “The Daily Shot Brief – September 20th, 2021”
Greetings, United States: The Treasury curve has been flattening at the longer end, which may signify falling inflation expectations Fund managers increasingly see inflation as transitory. Eurozone: The Eurozone’s industrial production has been lagging the rest of the EU. Emerging Markets: Emerging markets are seeing a broad-based slowdown in manufacturing growth. …
Continue reading “The Daily Shot Brief – September 17th, 2021”
Greetings, China: The number of regulatory actions coming out of Beijing has been climbing. China’s capital markets will be scarred by these actions for years to come, with substantial valuation discounts becoming a permanent feature. Eurozone: Material/equipment shortages are most acute in Germany. Here is the breakdown by sector (for the EU). …
Continue reading “The Daily Shot Brief – September 16th, 2021”
Greetings, United States: The CPI report surprised to the downside, with inflation easing in pandemic-sensitive sectors. Treasury yields retreated in response to the CPI miss. Eurozone: Eurozone inflation, when broken into constituents, is largely due to higher commodity costs and supply chain issues. Commodities: Bloomberg’s broad commodity index is hitting multi-year highs, boosted …
Continue reading “The Daily Shot Brief – September 14th, 2021”
Greetings, United States: There are signs of moderation in the US housing market. Europe: European total factor productivity has lagged the US for nearly two decades. Emerging Markets: Argentina’s markets cheered the ruling coalition’s election loss. Cryptocurrency: Crypto markets were whipsawed on fake news on Monday. Rates: There have been …
Continue reading “The Daily Shot Brief – September 14th, 2021”
Greetings, United States: The betting markets increasingly expect a corporate tax hike. Europe: Some nations want the EU to focus on debt reduction again (after the budget rules were suspended in 2020). Cryptocurrency: Did El Salvador’s move add legitimacy to cryptos? It certainly didn’t help the nation’s bonds. Energy: Total US …
Continue reading “The Daily Shot Brief – September 13th, 2021”
