Post Tagged with: "Britain"
Norway dumps Irish and Portuguese bonds, Switzerland increases Sterling reserves
The Swiss National Bank reported its reserve figures yesterday and the increase in its sterling holdings are notable and may help explain the its relative strength, despite data a soft real sector reports, culminating in the news last week that, defying expectations, the UK economy contracted in Q1, the second consecutive quarter that the British economy shrank. Separately, Norway’s sovereign wealth fund, the Government Pension Fund Global, indicated it has sold off its Irish and Portuguese bond holdings, pared its Spanish and Italian holdings and increased its exposure to Mexico, Brazil and Indian bonds
Dollar and Yen Bounce Back as Periphery Concerns Mount
As full liquidity returns to the markets for the first time in nearly a week, the US dollar and Japanese yen have rallied. First though weak short euros and long yen cross positions were squeezed in early Asia, but by the time Europe entered the fray, the moves were well under way, with the euro and sterling coming off and the yen rallying
You Can’t Handle the Truth!
Remember the scene in A few Good Men where Colonel Jessup (Jack Nicholson) and Lieutenant Kaffee (Tom Cruise) trade insults? Following some pretty intense questioning, Kaffee yells at Jessup: “I want the truth”. With the deadly glare that only Jack Nicholson can muster, Jessop retorts: “You can’t handle the truth”. I was reminded of this rather famous moment in film history when a long time reader of the Absolute Return Letter asked me recently: Why don’t you tell the truth about the UK economy? Why don’t you tell it as it is – that the situation in the UK is worse than it is in the eurozone? I decided to take up the challenge from the reader. I am not sure that I actually agree that the UK is in a worse position than most eurozone countries; it is worse in some respects but better in others. More about this in a moment
[Premium] More on financial repression
This is a silver level post which continues some thoughts from the daily commentary on the effect of low nominal and real rates. Martin Wolf’s latest commentary at the FT features prominently
Full Text: Fitch Affirms United Kingdom at ‘AAA’; Revises Outlook to Negative
Fitch Ratings released the following statement today in conjunction with their latest ratings action on sovereign debt issued by the United Kingdom
Steve Keen on the Australian economy and housing bubbles in Australia, Canada, UK and Hong Kong
Good video with Steve Keen, the Australian economics professor with Max Keiser. Steve not only talks about the Australian economy and that country’s housing bubble but also about the bursting of housing bubbles in Canada, the UK and Hong Kong
Four Key Economic Developments and Their Market Implications
There have been four noteworthy developments today that will shape the investment environment
Greece and the Rise of Nationalism in Europe and East vs West
I am not particularly shocked or worried about the cancelled European finance ministers meeting. I still think this bailout gets done because Europe and the markets are not prepared for a disorderly default and politicians cannot risk the fallout one would create. Where my concern lies is the medium to longer-term
Majors Trading Flat ahead of the ECB
The dollar is paring back some of its recent losses, with currencies mostly range bound, ahead of the ECB. The EuroStoxx 600 is currently up 0.25%, with bank shares up 0.8%; S&P 500 futures are essentially flat. Euro zone sovereign 10-year yields are mixed; Portuguese 10-year down 17bps, Spanish 10-year up 7bps
Seven Observations about Commitment of Traders in FX
The Commodity Futures Trading Commission requires futures traders to identify whether they have an underlying business interest (commercials) or if they don’t (non-commercials). Here are seven take-aways from the most recent report that covered the week through January 17th
Chart of the Day: Developed economies’ debt levels by sector
This is a great chart below via the Wall Street Journal. It shows the total debt to GDP ratios for the largest developed economies in the world broken down into four sectors: households, non-financial corporations, financial institutions and government
Euro Slides Ahead of BOE and ECB Meetings
The euro was recovering in early Europe, moving back toward the upper end of its recent narrow range and it reversed course sharply, triggering stops along the way as it dropped nearly a cent to $1.2695. The technical failure yesterday at $1.2820 may also have been more telling. News from the German stats office that its economy may have contracted 0.25% quarter-over-quarter in Q4 is a bit disappointing as some hoped for stagnation