Recap 2014-07-08

Commentary:

Now that that exciting first half is over:

  • Several people have noted the ‘stealth rally’ in Japanese equities. Let’s put it into perspective, vs US and EU indices:

That’s right, the Nikkei is underperforming by 13% YTD.

From a broader perspective, the Nikkei has simply reconnected with USDJPY: (The NYFRB study noted yesterday not withstanding)

  • This idea from Barclay’s isn’t too bad:

  • Global central banks are increasingly relying on macro-prudential measures to contain financial risks. GS argues that, should they be successful, it could mean both a longer expansions and lower financial as well as economic volatility. There are a LOT of ifs there, but if it is accurate, the primary beneficiaries would be long dated financial assets. Something else to think about.

Notable:

  • AU Business Confidence improved to 8 from 7 prev
  • Japan Eco Watchers Outlook Survey declined to 53.3 vs 54.5 exp and 53.8 prev
  • US NFIB Survey declined to 95 vs 97 exp and 96.6 prev
  • the head of WMT’s US business said employers in the country are hiring again but the job recovery isn’t robust enough to give ordinary consumers enough confidence to increase their spending. WMT said the improving employment picture had so far failed to raise sales at the retailer’s U.S. stores. “It’s really hard to see in our business today … that it’s gotten any better”
  • Eurozone banks are shedding assets/loans at a record pace and may dispose of EU100B worth this year; fund managers are devoting a "wall of money" to buying these assets. FT
  • crude exports from the country are expected to ramp in the coming weeks following the re-opening of two large ports; Libyan gov’t officials began reaching out to crude traders Mon. FT
  • Israel struck further at Gaza early Tues, bombing ~50 targets; the military is calling up additional reservists for a possible ground assault. NYT
  • Hundreds of flights were cancelled in Japan and more than 500,000 people urged to evacuate as a powerful typhoon brought torrential rain and high winds to southwestern islands and was forecast to reach Tokyo later in the week. This is likely to affect Japanese data for 3Q, which means a ‘clean’ reading () may not come until 4Q.

Upcoming:

  • Tue: China CPI,
  • Wed: Canada Housing Starts, NZ Mfg Survey, AU Employment
  • Thu: Japan Consumer Confidence, BoE, US Jobless Claims, Australia Home Loans
  • Fri: Canada Employment, USDA WASDE Reports,
  • Mon: RBA Minutes
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