The stand-out market move over the past week has to be the rally in the pound. The soap opera of Brexit appears to be drawing to a “soft Brexit” finale. Or so it seems. The truth is we just don’t know. It’s for this reason we haven’t featured a piece on Brexit today. Better to watch the news instead.
But we do feature some excellent pieces on topics other than Brexit. US rates expert, George Goncalves gives one of the best overviews of recent US repo dynamics. He also makes the case that the Fed is engaging in QE. Seasoned macro strategist, John Tierney, assesses whether Michael Bloomberg can enter the Democrat Presidential race, especially if Biden fades.
We have two EM pieces. In the first one, Thanos returns – not the Marvel one, but rather EMEA specialist Thanos Papasavvas. He writes on the implications of Turkey engaging in the Middle East infinity war. Then we have Morgan Stanley Asia strategist, Mirza Baig, writing on India – its credit issues and currency.
Wrapping up our newsletter, I’ve written two pieces. One on our new positioning indicator for G10 FX markets. The other is on how US earning seasons may not be so positive for US stocks. Instead, it may be time to focus on European stocks (especially if we avoid hard Brexit – oops I mentioned Brexit!)
Enjoy!
Bilal
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The stand-out market move over the past week has to be the rally in the pound. The soap opera of Brexit appears to be drawing to a “soft Brexit” finale. Or so it seems. The truth is we just don’t know. It’s for this reason we haven’t featured a piece on Brexit today. Better to watch the news instead.
But we do feature some excellent pieces on topics other than Brexit. US rates expert, George Goncalves gives one of the best overviews of recent US repo dynamics. He also makes the case that the Fed is engaging in QE. Seasoned macro strategist, John Tierney, assesses whether Michael Bloomberg can enter the Democrat Presidential race, especially if Biden fades.
We have two EM pieces. In the first one, Thanos returns – not the Marvel one, but rather EMEA specialist Thanos Papasavvas. He writes on the implications of Turkey engaging in the Middle East infinity war. Then we have Morgan Stanley Asia strategist, Mirza Baig, writing on India – its credit issues and currency.
Wrapping up our newsletter, I’ve written two pieces. One on our new positioning indicator for G10 FX markets. The other is on how US earning seasons may not be so positive for US stocks. Instead, it may be time to focus on European stocks (especially if we avoid hard Brexit – oops I mentioned Brexit!)
Enjoy!
Bilal
Understanding Fed Policy: QE Returns Thanks To QT Aftershocks And Repo Shock (6 min read) Another thought-provoking analysis on US monetary policy by rates veteran George Goncalves. The Fed claims their recent easing programs are mere tweaks to sustain recovery – but will they be enough to alter market liquidity needs and the ongoing QT aftershocks? George sees the new tools as blunt and slow-natured and predicts further easing in sight.
(George Goncalves | 17th October, 2019)
Don’t Get Your Hopes Up, Mr. Bloomberg… (4 min read) Michael Bloomberg, ex-New York City Mayor recently announced that if Joe Biden’s chances keep fading, he will enter the US Presidential race. He might be just what’s needed to close the widening gap between progressives and liberals. Is it viable, however? In this excellent analysis, John Tierney reminds of Bloomberg’s authoritarian tendencies as a mayor, the hindrances of his old age and why Biden still stands strong.
(John Tierney | 17th October, 2019)
Unalarmed By Turkey And Syria (2 min read) The blame lies not only on Trump for abandoning the Kurds – the UK and the EU have largely stayed silent. With the US stepping back and Russia filling in the geopolitical space in Syria, Thanos Papasavvas questions whether the EU will consider taking more ownership. He maintains a negative outlook on the Turkish Lira, but for reasons, surprisingly unrelated to geopolitics.
(Thanos Papasavvas | 17th October, 2019)
India: Give Me Some Credit! (3 min read) A year on from the initial lending shock for India’s Non-Bank Financial Companies, they are still largely shut out from public markets and have resorted to funding from banks. This has led to crowding out and reliance on USD borrowing. Mirza Baig offers an in-depth analysis of the credit crunch and his predictions on the rupee.
(Mirza Baig | 17th October, 2019)
What’s the Macro Hive Positioning Report Telling Us? (2 min read) After introducing the Macro Hive Risk Barometer, we have now created our second, this time looking at G10 FX sentiment. We combine four key market indicators to gauge how investors are positioned on lead currencies – we explain the recent GBP rally and the quietness around USD.
(Bilal Hafeez | 16th October, 2019)
Watch Earnings – Are US Stocks Still The Best Destination For Investors? (2 min read) Q3 Earnings Season is now upon us. US Companies are getting better at beating expectations, but we question whether they will perform strong enough to impress markets. Perhaps the Euro-area stocks have more space to out-shine their US peers, given the pessimism in the region.
(Bilal Hafeez | 15th October, 2019)
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)