After yesterday's surprisingly contained session, in which the priced-in Singapore summit made little impact on markets, so far in today's pre-FOMC session we have seen contained markets with little to note.
"This remains an “interesting” space in terms of the potential policy pitfalls, and the “swing” moment – when suddenly balance is lost and the centre cannot hold."
in May, China's broadest monetary aggregate, the Total Social Financing, just posted it smallest monthly increase since July 2016, as off-balance sheet financing posted its biggest monthly drop on record.
“The substance of the government’s evidence identifies uncharged individuals and entities that the government believes are continuing to engage in interference operations like those charged in the present indictment,” prosecutors wrote.
The ECB has signaled the end of its asset purchase program and a possible rate hike before 2019... it is overdue... the governments of the EU, however, have not prepared themselves at all for the end of stimuli. Rather the contrary..."
In an environment that is saturated with mass media propaganda, it can be hard to figure out which way’s up, let alone get an accurate read on what’s going on in the world. Here are a few tips I’ve learned which have given me a lot of clarity in seeing through the haze of spin and confusion...
"History is rhyming in China. The government is forcing large banks to lend trillions of yuan for rental housing, at below market rates, to borrowers who can't afford it, and banks are trying to pass of the risk by bundling these loans into asset-backed securities. "
Lenders are extending longer loan terms that are more prone to default, to consumers who are taking on the most debt since the "recovery" started. Don't worry - it's not "sub-prime", it's "near prime".
UK PM Theresa May has won a watered-down vote that leaves her cabinet in control of the Brexit negotiations for now... but in order to avert mutiny, she had to accept a considerable concession.
At the same time that a record 42% of investors said companies are over levered, far exceeding the 2008 peak, 64% of respondents think the US has the most favorable outlook for profits, a 17-year high.
China's market share of US imports of apparel and footwear has slumped in the past 2 decades, replaced by Vietnam, Indonesia and Bangladesh, and is declining at an accelerating pace.
"Without the safety blanket of QE, investors appear confused as to which way to look. In fact, our "Wall of Worry" highlights that clients seem to be almost equally concerned about every risk at present, without any clear stand-outs."
