"One of the biggest problems facing investors is the sheer quantity of research. That's where Macro Hive comes in. It’s a service that finds great researchers, sifts through macro research from around the web and academic world, and showcases only the best content. It will provide a platform for top researchers to get their work better known. "

Specials

August Curse Hits FX Carry, So Watch Trade (2 min read)

By Bilal Hafeez | August 22, 2019

FX carry trades are down almost 4% so far in August. This is their worst performance since last August (see first chart). Perhaps the summer month is cursed – more probable, though, is that vacationing traders leave the market prone

Thoughts from Camp Kotok 2019: China, MMT, and lower/NIRP rates (3 min read)

By George Goncalves | August 22, 2019

I recently had the pleasure of spending time chatting and fishing with market participants and other big-picture thinkers at the annual Camp Kotok (CK) event held at Leen’s Lodge in Grand Lake Stream, Maine. CK is an invitation only event

The times they are a-changin’… (4 min read)

By John Tierney | August 22, 2019

The summer of 1969. It was one of those special moments in American history. In July, man first walked on the moon, and then a few weeks later in mid-August the baby boom generation celebrated its coming of age at the now legendary Woodstock music festival.   It seemed then that everyone knew they

Best of the Web

The IMF’s Latest Victims (Project Syndicate, 3 min read)

August 16, 2019

(You can read the article by clicking here) Continuing our recent discussion of Argentina’s woes from our specials this week, we picked this piece by Jayati Ghosh, a Professor of Economics at Jawaharlal Nehru University in New Delhi, who blames the International

Tracking Foreign Capital (Bank Underground, 4 min read)

August 16, 2019

(You can read the article by clicking here) A new paper by the Bank of England explores how foreign capital inflows specifically aimed at UK banks and financial institutions are channeled at home. Such flows can be large (they reached 100% of

Why we can’t just blame rising inequality for the growth of populism around the world (The Conversation, 4 min read)

August 16, 2019

(You can read the article by clicking here) Trump’s triumph is commonly attributed to the marginalised voters favouring his populism, fuelled by a rage against rising income inequality. This research by Brian Nolan, Professor of Social Policy at Oxford University,

China Digest from the Web

Smart home tech makes inroads into China’s emerging elderly care market (Reuters, 4 min read)

August 16, 2019

(You can read the article by clicking here) China, similarly to Japan and many Western countries, has an aging population and start-ups are waking up to huge market potential. With millennials too busy to look after their parents and retirement

Stimulus Prep or Prelude to Deflationary Crisis: China Tightening Screws on Real Estate (Investing in Chinese stocks, 4 min read)

August 16, 2019

(You can read the article by clicking here) Real estate prices are rallying due to loose buying restrictions in Chinese localities and Central Government stimulus. Meanwhile, credit has failed to flow to SMEs and other industries. But the situation may

Inside China’s vast influence network – how it works, and its reach in Australia (The Conversation, 4 min read)

August 16, 2019

(You can read the article by clicking here) Garry Groot, a Senior Lecturer in Chinese Studies at the University of Adelaide, outlines the little-known Chinese United Front Work Department within the Communist Party, designed to reach out to and influence

Podcasts

Danny Blanchflower Discusses Labor Economics (Masters in Business, 75 mins)

August 21, 2019

(You can listen to the podcast by clicking here) Danny Blanchflower, former Bank of England MPC member attempts to decipher the puzzle of muted wage growth despite unemployment nearing its natural rate. He states that income inequality disincentivizes the working

He Begs to Differ (Grant’s Current Yield Podcast, 22 mins)

August 21, 2019

(You can listen to the podcast by clicking here) Tuomas Malinen, CEO of GnS Economics and an Adjunct Professor of Economics at the University of Helsinki argues that an extremely low-interest-rate environment and QE don’t work as intended (in an

Kashmir Is the 72-Year ‘Wound’ between India and Pakistan (Deep Dish on Global Affairs, 29 mins)

August 21, 2019

(You can listen to the podcast by clicking here) We recently observed Prime Minister Modi and his government’s historic announcement to alter the Indian Constitution and diminish Kashmir’s autonomy. In this podcast, Nisid Hajari from Bloomberg and academic Paul Stainland analyse

Freshly Squeezed Working Papers

Alternative Data to Generate Alpha (3 min read)

June 20, 2019

In recent years the availability of new alternative datasets for financial markets has expanded enormously, potentially giving investors an informational edge. These can range from consumer transaction data to satellite

Give Credit Where Credit Is Due: What Explains Corporate Bond Returns?

May 21, 2019

Give Credit Where Credit Is Due: What Explains Corporate Bond Returns? AQR paper finds finds that options markets explain a great deal of credit returns. Two features of corporate bonds

The Risk of Returning to the Zero Lower Bound

May 21, 2019

The Risk of Returning to the Zero Lower Bound San Fran Fed writes “that there currently appears to be a low risk of the economy returning to the zero lower bound

Investor Positioning

August 20, 2019

It’s Europe with the Recession Risk, Not the US (2 min read)

August 21, 2019

Despite all the talk of an imminent US recession, most estimates suggest US growth is comfortably in the 2% zone. Nowcast estimates have Q3 GDP growth ranging from 1.8% to 2.6%, and the consensus  forecast has it at 1.8% (see table). This follows the 2.1% print for Q2. On top of that, growth data surprises have been turning up for the US (second chart).

The picture for Europe is less positive: both the UK and Germany saw negative prints for Q2. And data surprises at least for the Euro-area have been heading down. So if there is vulnerability in the global economy, it appears to be showing up in Europe rather than the US.

Nowcasting estimates for US growth (q/q ar)

11

Growth data surprises

222

Bilal Hafeez is the Editor of Macro Hive and can be contacted here

 

(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.)

Sign up to the Macro Hive newsletter here:

Sign Up For the Free Newsletter