The Daily Shot Brief – October 22nd, 2019



China: The PBoC injected a sizeable amount of liquidity into the banking system on Tuesday.

Source: The Daily Shot


Global investors noticed the PBoC’s action, pushing US equity futures higher (chart below). Hopes for a US-China interim trade deal also helped stocks around the world (see story from China’s state-owned publication).

Source: The Daily Shot


The Eurozone: The ECB will be running out of government bonds to buy in this next phase of QE . Will the central bank boost purchases of ABS and corporate bonds? Quantitative Easing means large purchases of publicly traded bonds from banks and specific dealers in order to increase the money supply. Asset-Backed Securities are securities that can be “bond-like” where the security’s payments are derived from the income stream from a certain asset, example would be a collection of credit card debts and repayments backing the security’s payments to ABS holders.

Source: @markets; Read full article

The United States:
Fed districts with higher China exposure have been reporting weaker manufacturing activity.

Source: Pantheon Macroeconomics


In addition, the unwind of inventories will be a drag on growth.

Source: Pantheon Macroeconomics


Emerging Markets: Industrial production growth across EM economies has been slowing.

Source: Capital Economics


Commodities: Fitch expects further downside for iron ore prices.

Source: Fitch Solutions Macro Research


But Fitch’s 2020 price forecast for iron ore is still above consensus. Here are their projections for other commodities.

Source: Fitch Solutions Macro Research


Currently, iron ore is still trading below resistance.

Source: @DantesOutlook


Food for Thought: Violent crime vs. air pollution:

Source: @TheEconomist; Read full article

Edited by Devon Lall

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