Emerging Money http://emergingmoney.com Your Ticket Around The World Mon, 06 Jul 2015 22:31:18 +0000 en-US hourly 1 Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-37/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-37/#comments Mon, 06 Jul 2015 18:26:43 +0000 http://emergingmoney.com/?p=91848 Emerging Money Daily Audio Call July 6 - While the world is focused on Greece and the weekend’s no vote, China and Asian equity assets are under more pressure thus EM overall badly underperforming.

Like last week when Greece indicated they were turning against the creditors, the Euro and Bond yields are following [...]]]> Emerging Money Daily Audio Call July 6 - While the world is focused on Greece and the weekend’s no vote, China and Asian equity assets are under more pressure thus EM overall badly underperforming.

Phone AudioLike last week when Greece indicated they were turning against the creditors, the Euro and Bond yields are following a similar path.   China has introduced the concept of the stabilization fund and the hope is there are more PBoC liquidity operations coming in to support tone. 

Right now its about “My Bazooka is bigger than yours”  We handicap next moves for Greece and the ECB and EZ stance.   Commodities suffering along with EM and because of EM.  Oil and Copper are the weak links to the commodity complex despite and strong show of PMI data last week.

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EM Monday Morning Charts: OXI Means OXI…But Not For Markets? http://emergingmoney.com/analysis/em-monday-morning-charts-oxi-means-oxi-but-not-for-markets-2/ http://emergingmoney.com/analysis/em-monday-morning-charts-oxi-means-oxi-but-not-for-markets-2/#comments Mon, 06 Jul 2015 12:41:43 +0000 http://emergingmoney.com/?p=91797 Markets under control despite resounding OXI from Greece yesterday.  As we noted last night the price action is about testing the levels form last week and overall key levels for the indices and macro.  Right now the Euro us holding the range but has been weakening over the last hour to see if we test [...]]]> Markets under control despite resounding OXI from Greece yesterday.  As we noted last night the price action is about testing the levels form last week and overall key levels for the indices and macro.  Right now the Euro us holding the range but has been weakening over the last hour to see if we test when the US gets back from a long holiday weekend.  I wouldn’t expect the fireworks are over for today.  The real level to hold is 1.075 in our view.  We would be playing the Euro short to that level.

EUR

Meanwhile the DXY has finally broken through the key 96.25 level it was holding despite a week of tests that started last Sunday night.  Again, the jury is still out on a move higher if it can’t hold these gains but we are confident that Fed dynamics( Fed minutes this Wednesday btw) and Europe are all this index needs.  We think you stay long the Dollar across 100 on the DXY.  Commodities appear to be collateral damage today (see below).

...More 

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Greek Thoughts: It Feels Like Last Sunday All Over: Monday Preview http://emergingmoney.com/analysis/greek-thoughts-it-feels-like-last-sunday-all-over-monday-preview/ http://emergingmoney.com/analysis/greek-thoughts-it-feels-like-last-sunday-all-over-monday-preview/#comments Mon, 06 Jul 2015 02:16:50 +0000 http://emergingmoney.com/?p=91698 My first comment is that is pretty annoying to have to deal with Greece volatility this Sunday when I would rather bask in the US Woman's World Cup win!! #USAUSAUSA...truly dominant performance.

My second comment is this feels a lot like last Sunday if you look at price action in the Euro and global markets.  [...]]]> My first comment is that is pretty annoying to have to deal with Greece volatility this Sunday when I would rather bask in the US Woman's World Cup win!! #USAUSAUSA...truly dominant performance.

My second comment is this feels a lot like last Sunday if you look at price action in the Euro and global markets.  Meanwhile tonight versus last Sunday the Euro-group feels even more vindicated.  They didn't call for the referendum and its not up to them to interpret the results. They may be interested in letting everything breath for a while and see how Greece reacts.  Right now they  don't have to react.

On Euro trading since the NO vote: the Euro did exactly what it did last weekend on Sunday when it dropped quickly inside 1.10 before bouncing back to 1.1080.  Last Sunday the intra-day volatility on the currency was over 4% and the Euro's eventual strength as markets opened Monday was unexpected. 

Deja vu?

Deja vu?

Bonds are acting the same way was they did last Sunday and we now should see the Bund move even further inside last weeks range.  We said last week that we expect the 10yr Bund to move inside of 0.50%

What else can you expect?  

  • PIIS (no longer PIIGS I guess)  peripheral yields up
  • Treasury yields down and will test through last weeks lows
  • Equities down globally with the Germany hit hardest (trading 1.8-2.5x  US to the downside but Spain and Italy worse
  • EM FX will be hit
  • Yen will rally
  • Oil and commodity currencies down on broad risk-off sentiment

 Key levels – EUR holding below 1.10, JPY below 122, EURGBP below 0.70. If we consolidate below two of these three levels we will like see further moves in the same direction.

China also rallying on open and pulling back but still up on the day.  Watch to see if negative reversal close will put more spokes into global players who think China is next to blow.  We don't...

Stay tuned...

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-36/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-36/#comments Fri, 03 Jul 2015 19:11:14 +0000 http://emergingmoney.com/?p=91613 Emerging Monday Daily Audio Call July 3 - Global watch and wait mode as global markets are quiet with the US holiday and the anxious wait for the Greek referendum vote. 

Right now momentum appears slightly to favor a yes vote but right now impossible to give any real analysis here that [...]]]> Emerging Monday Daily Audio Call July 3 - Global watch and wait mode as global markets are quiet with the US holiday and the anxious wait for the Greek referendum vote. 

Phone AudioRight now momentum appears slightly to favor a yes vote but right now impossible to give any real analysis here that is definitive.  What happens on a no vote is more serious than we think markets are expecting. 

Some smart voices in the global economic purview say contagion will follow via bank runs across other parts of the periphery.  It’s hard to say complacency is warranted here.  We repeat, there is no reason to avoid higher cash levels or hedged protection for your portfolio. 

China is now within 200 points or 5% on the CSI300 of wiping out the last major leg of this insane rally.  We expect more attempts at soothing commentary by the local press but not necessarily a policy response. 

Two weeks from earnings season means you have potential to see some opportunities for stock picking around all the macro.  We remain glass half full on EU equities and selective on US equities over the next six weeks. 

EM will trade with risk premium highs and lows and also with (inverse to ) the USD, which is dancing near breakout levels.

Have a healthy and safe holiday in the US and great weekend globally.

 

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“And The Survey Says….” http://emergingmoney.com/analysis/and-the-survey-says/ http://emergingmoney.com/analysis/and-the-survey-says/#comments Fri, 03 Jul 2015 15:55:10 +0000 http://emergingmoney.com/?p=91592 Into the European close, according to DB who is quoting Alco here is the following:

Greek opinion poll from Alco (reputable) shows the following

 41.7% YES 41.1% NO 10.7% undecided

 Bottom line:  Too close to call

 No looks to be gaining ground from previous days.  Yesterday this gap was 1.3% in favor of yes.  [...]]]> Into the European close, according to DB who is quoting Alco here is the following:

greece-flagGreek opinion poll from Alco (reputable) shows the following

  •  41.7% YES
  • 41.1% NO
  • 10.7% undecided

 Bottom line:  Too close to call

 No looks to be gaining ground from previous days.  Yesterday this gap was 1.3% in favor of yes. 

European bond yields and the Euo are quiet:

Spanish 10yr yields calm for now

Spanish 10yr yields calm for now

 

Euro acts like all is well

Euro acts like all is well

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EM Charts: With Greece on the Brain Trading Ranges To Sketch; Watch Brazil Cellular http://emergingmoney.com/analysis/em-charts-with-greece-on-the-brain-trading-ranges-to-sketch-watch-brazil-cellular-2/ http://emergingmoney.com/analysis/em-charts-with-greece-on-the-brain-trading-ranges-to-sketch-watch-brazil-cellular-2/#comments Thu, 02 Jul 2015 16:28:01 +0000 http://emergingmoney.com/?p=91451 Between Greece and Payrolls and a long holiday weekend it’s not a surprise to see volatility elevated today. 

Note that we are hallway back at the highs of Monday and well above the 3m range.  Payrolls were calm, thus Greece headlines leave plenty of room for investors to own vol into next week.

Between Greece and Payrolls and a long holiday weekend it’s not a surprise to see volatility elevated today. 

Note that we are hallway back at the highs of Monday and well above the 3m range.  Payrolls were calm, thus Greece headlines leave plenty of room for investors to own vol into next week.

vix

We have to take this opportunity to point out the price action in Gold is terrible.  If gold cant rally into a weekend where there is plenty of perceived systemic risk and you had a weaker set of payroll and jobs numbers than expected, when can it rally?  Remember, weaker payrolls along should have had an impact on the yellow metal as many felt this was weak enough of a number that it might push the Fed back from September.  We don’t think is the scenario but you get the picture. 

GC

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-35/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-35/#comments Thu, 02 Jul 2015 15:09:37 +0000 http://emergingmoney.com/?p=91425 Emerging Money Daily Audio Call  July 2 - Global markets are sideways to slightly higher into a long weekend as Greece headlines are status quo and US Payrolls were calm.

We discuss market positioning and where the “Black Swans” of the week – see PR, China and of course Greece are more [...]]]> Emerging Money Daily Audio Call  July 2 - Global markets are sideways to slightly higher into a long weekend as Greece headlines are status quo and US Payrolls were calm.

Phone AudioWe discuss market positioning and where the “Black Swans” of the week – see PR, China and of course Greece are more sideshows in a tense global asset allocation crossroads. 

Bonds continue to see outflows but we are not sure how aggressive you should be selling rates at these levels.  We expect some flight to quality to continue but also see limitations to how high yields can move with every global CB still near their triggers. 

We review the first half performance within EM and global markets.  EM holds serve and still well positioned for a 2H outperformance if we can step forward on Fed hikes. 

Interesting test of 96.25 again today on the USD and we say buy the breakout from here… 

Have a great holiday if you're not plugged in tomorrow.

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Is China The Real Threat? http://emergingmoney.com/analysis/is-china-the-real-threat/ http://emergingmoney.com/analysis/is-china-the-real-threat/#comments Thu, 02 Jul 2015 12:22:34 +0000 http://emergingmoney.com/?p=91392 Checkout Tim's detailed report about China and how he's playing.

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Checkout Tim's detailed report about China and how he's playing.

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Today’s Emerging Money Audio Call has Been Released http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-34/ http://emergingmoney.com/analysis/todays-emerging-money-audio-call-has-been-released-34/#comments Wed, 01 Jul 2015 16:24:13 +0000 http://emergingmoney.com/?p=91280 Emerging Money Daily Audio Call July 1 - On today’s call we open the quarter with the impossible task of looking past Greece and talking about fundamentals and bottom up investing. 

So with that we give you our view on where Tsipras and Greece are positioned and we remind you where we [...]]]> Emerging Money Daily Audio Call July 1 - On today’s call we open the quarter with the impossible task of looking past Greece and talking about fundamentals and bottom up investing. 

Phone AudioSo with that we give you our view on where Tsipras and Greece are positioned and we remind you where we think the market overall is positioned on Greece.  China was weaker last night and this is weighing on EM equities who are underperforming.  China’s under performance is NOT macro related and the PMI releases were in our view “good enough”.  China remains in a policy loosening mode and will continue to bring down long real rates via RRR cuts and interest rate cuts. 

We review 5d performance across EM countries and discuss prospects for how EM trades in a world where the Fed follows course ( to tighten) and the Dollar picks up steam.

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Japan’s companies are turning more optimistic, Tankan shows http://emergingmoney.com/analysis/japans-companies-are-turning-more-optimistic-tankan-shows/ http://emergingmoney.com/analysis/japans-companies-are-turning-more-optimistic-tankan-shows/#comments Wed, 01 Jul 2015 12:35:29 +0000 http://emergingmoney.com/?p=91251 Source CNBC.Com's Leslie Shaffer  -  The Bank of Japan's (BOJ) Tankan survey showed the country's large manufacturers are more optimistic than expected, with the index hitting its highest level since March 2014, before a sales tax hike took effect.

"It progressively shows the Japanese economy is improving. Expectations are rising. Looking at the [...]]]> Source CNBC.Com's Leslie Shaffer  -  The Bank of Japan's (BOJ) Tankan survey showed the country's large manufacturers are more optimistic than expected, with the index hitting its highest level since March 2014, before a sales tax hike took effect.

japan_machinery"It progressively shows the Japanese economy is improving. Expectations are rising. Looking at the rest of the world, Japan doesn't look that bad," Peter Boardman, managing director at Tradewinds, told CNBC. "Sentiment within Japan is quite strong."

Japan's large manufacturers' index for June came in at positive 15, compared with expectations in a Reuters poll for a positive 12. For the September figures, the index was forecast at positive 16, compared with a Reuters poll forecast for positive 12. The tankan measures corporate sentiment by subtracting the number of companies who say business conditions are negative from those that say they are positive.

The survey showed big companies expect capex for the 2015-16 fiscal year will rise 9.3 percent, compared with a Reuters poll forecast for 5.2 percent. That's the biggest rise since 2006. But small firms expect capex to fall 15.7 percent over the period, although that came in better than a Reuters poll forecast for a 16.3 percent fall.

Boardman wasn't the only one who read the data bullishly.

"You're finally seeing a deleveraging process, a very long one, for the balance sheets for a lot of even the non-financials in Japan, coming to an end, which means capital allocations back to investors [and] better earnings momentum than just about anywhere in the world," Tim Seymour, chief investment officer at Triogem Asset Management, told CNBC.

But some remained pessimistic on the outlook.

"Firms reliably turn more optimistic in the second quarter, so we wouldn't read much too into this improvement. What's more, these 'projections' do in fact lag actual capital expenditure," Marcel Thieliant, a Japan economist at Capital Economics, said in a note Wednesday. "We already have plenty of activity data for April and May, which tend to provide more reliable indications about the pace of expansion (or contraction) of Japan's economy than the Tankan. On balance, these figures suggest that the economy contracted last quarter."

Recent economic data from Japan has painted a mixed picture.

Japan's policymakers have struggled to kick start the economy after decades of deflation, with the Bank of Japan launching a massive easing program in 2013 as part of "Abenomics," Japanese Prime Minister Shinzo Abe's plan to return the country to growth.

But after a consumption tax hike to 8 percent from 5 percent in April of 2014, the economy got clobbered when consumers stopped spending, forcing the government to postpone a second sales tax initially due this October.

Recent economic data have been mixed. Earlier this week, data showed industrial output fell 2.2 percent on month in May, worse than a Reuters poll forecast for a 0.8 percent decline. That spurred the government to say industrial production is stagnating and cut its forecast, according to Reuters.

But Japan's consumers appear to be stepping up to the plate, with retail sales rising 3.0 percent on year in May, beating a forecast for a 2.3 percent rise from a Reuters poll. That's consistent with data released last week showing household expenditures climbed more than expected in May.

Some of the fillip may be coming from incoming tourists.

"With a weaker yen, you’re seeing tourists from around the world coming to Japan," Tradewinds' Boardman told CNBC. "You had a large increase in inbound Chinese tourists and tourists in general in Japan, which has driven up a lot of retail sales."

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

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