Some interesting currency moves today

[x9200]

Either way re: Brexit, which FWIW I never see happening, I still have to consider Norway and Switzerland, both arms-length outside the EU having negotiated their own relationships, despite which together they represent the two wealthiest countries in Europe...

It is less about economy and more about the morale of the EU project. But perhaps it will turn good for everybody making it less political and more economy based.

[JR8]

For anyone else trying to divine the broader position and direction of the markets, here are a couple of insights from this morning...

----
'The very bad start to 2016 for the markets has continued this past week as panic has continued to dominate the markets as relatively unconvincing stories of financial armaggedon are doing the rounds over the past few days. Bears are searching for all sorts of reasons to continue the sell off. For most of the year it has been the oil price. Over the past couple of days it has been the financials and the Central banks inability to have any further impact. Last week it was worries over China's foreign reserves falling too quickly, but that has gone quiet this week with the markets shut over there for the New Year celebrations. Whatever concern is raised next, the bears are winning hands down at the moment and stock markets are now in very oversold territory.'
[no link, it's from the DividendMax.co.uk e-mailed newsletter]

and
----
'With market sentiments already in the deeper end of the pool, frayed emotions were aggravated by the spot of confusion arising from what US Federal Reserve chairperson Janet Yellen said in her semi-annual testimony to the Congress.

European and US equities were in the red for most of the week, where banking stocks were under immense pressure on concerns over creditworthiness, disappointing earnings report and sour loans. To add salt to open wounds, oil fell further, with the WTI crude futures dropping to a new 12-year low. As a result, energy-related stocks were confronted with renewed selling pressure.

The increasing divergence between market expectations and Fed projections around further rate hikes is creating the sort of policy uncertainty that roiled risk markets last year. Financial markets dislike uncertainty, and this was reflected in the aggressive selloff across world markets this week.
...
Global central bank policy is increasingly becoming a symptom of what’s wrong with the financial markets and real growth than a cure for economic ills. This suggested that the current policy frameworks are no longer capable of dealing with global requirements. The shift in view was hung out for all to see for most of this year, as market players ‘de-risk’ their portfolios and switched to capital preservation mode.
...
Coupled with ongoing worries about China slowdown, you have the recipe for a flaccid appetite risk. Can things get worse? To be honest, we may not have seen the worst yet. The performance of Chinese equities when they return next week will be key to whether the global stock rout would go on or not. China is pretty much in its own world due to the relatively close-off capital markets despite recent liberalisation moves. In contrast, the world is considerably affected by what goes on in China. If Chinese equities head deeper south next week, the global market is quite certain to follow.
...
[continues with a 'Week ahead' view of upcoming events]
http://www.ig.com/uk/market-update/2016 ... cies-30686

[JR8]

One of the financial stat releases coming up next week, from the 'Week ahead' section of the above-linked...

'Singapore will report its December retail sales figures and exports performance next week, alongside the final estimate of Q4 GDP, where expectations are for a downward revision to 1.8% YoY and 5.1% SAAR QoQ from preliminary estimates of 2.0% and 5.7% respectively.'

[Brah]

Good graphics http://www.economist.com/blogs/graphicd ... consbrexit

[Barnsley]

The Uk Pound is getting a proper pounding today ....

http://www.bbc.co.uk/news/business/mark ... efault.stm

Its under 1.99 Sing Dollar as I type this.

Its also at 52 week lows against a lot of the other currencies.

Keep up the Brexit talk Boris!!!

[Primrose Hill]

Bojo go. Bojo go

[JR8]

Bojo is like a stealth-bomber compared to Cameron's Gypsy-Moth (WW1 biplane).

Cameron came back from Europe, Chamberlain-like, clutching a list of promises declaring 'Peace in our time', just on this occasion: 'Concessions in our time'. How Merkel etc must be laughing, because Cameron got little or nothing of any consequence at all, but Cameron has to do Merkel's job by pretending that he has. But that is the EU, 'there is no reverse gear', it is and always has been an onward march to 'Ever closer union'.

Cameron is a euro-phile who pretends to be a euro-sceptic, in order to keep his voters on-board and keep UKIP at bay. Cameron must be cacking himself, he's just about run out of track. And Bojo and Cameron go way back [https://iconicphotos.wordpress.com/2010 ... gdon-club/ top pic, id'd as nos. 2 and 8], so Bojo knows his target just about as well as one might. For an outside bet, it's not beyond possibility that Bojo will use this to engineer Cameron out of no10...

p.s. I'd discount talk of a Brexit, IMO that's an initial hard negotiating position. One that has to be adopted to have any hope of achieving any meaningful concessions.

[Barnsley]

Bojo is like a stealth-bomber compared to Cameron's Gypsy-Moth (WW1 biplane).

Cameron came back from Europe, Chamberlain-like, clutching a list of promises declaring 'Peace in our time', just on this occasion: 'Concessions in our time'. How Merkel etc must be laughing, because Cameron got little or nothing of any consequence at all, but Cameron has to do Merkel's job by pretending that he has. But that is the EU, 'there is no reverse gear', it is and always has been an onward march to 'Ever closer union'.

Cameron is a euro-phile who pretends to be a euro-sceptic, in order to keep his voters on-board and keep UKIP at bay. Cameron must be cacking himself, he's just about run out of track. And Bojo and Cameron go way back [https://iconicphotos.wordpress.com/2010 ... gdon-club/ top pic, id'd as nos. 2 and 8], so Bojo knows his target just about as well as one might. For an outside bet, it's not beyond possibility that Bojo will use this to engineer Cameron out of no10...

p.s. I'd discount talk of a Brexit, IMO that's an initial hard negotiating position. One that has to be adopted to have any hope of achieving any meaningful concessions.

Hasn't Cameron already said he isnt gonna do a full term in office for PM this time anyway?

Just makes me laugh.

The referendum will be hilarious , some sworm political enemies will be playing for the same teams

[JR8]

Ah yes that's right, that rings a bell. Maybe better to pre-announce that than end up ultimately being skewered by your own cabinet as Thatcher was.
I don't know but I'd have imagined DC and BJ were perhaps still good friends, but now DC has to pretend to be at war? We'll see; politicians are masters of fakery anyway...

[JR8]

The Chinese economy has been slowing and there has been regional concern over what fall-out that would have. So I found this below interesting. Looks like CN are turning on the liquidity taps again...
--------------------
'China has ‘reinvigorated’ its margin lending markets. Policymakers in China have decided to relax the controls put on margin lending after the collapse in Chinese markets last year. Margin loans will be offered on terms of seven to 182 days and rates will be as low as 3%. Shenzhen small caps had their best week on record last week on this rumour and volumes returned to pre-control levels. The correlation between margin lending and Chinese equities is highly correlated – this will be a positive.

The third largest intraday appreciation fix in the CNY last Friday sent the offshore CNH on a trip to the moon and raised plenty of eyebrows. Although this may have reduced expectations of a short term devaluation in the CNY, it does increase expectations that the People’s Bank of China will continue to ‘over-tweak’ the currency despite saying it won’t.'
http://www.ig.com/uk/market-update/2016 ... ival-31403

[Wd40]

The Chinese economy has been slowing and there has been regional concern over what fall-out that would have. So I found this below interesting. Looks like CN are turning on the liquidity taps again...
--------------------
'China has ‘reinvigorated’ its margin lending markets. Policymakers in China have decided to relax the controls put on margin lending after the collapse in Chinese markets last year. Margin loans will be offered on terms of seven to 182 days and rates will be as low as 3%. Shenzhen small caps had their best week on record last week on this rumour and volumes returned to pre-control levels. The correlation between margin lending and Chinese equities is highly correlated – this will be a positive.

The third largest intraday appreciation fix in the CNY last Friday sent the offshore CNH on a trip to the moon and raised plenty of eyebrows. Although this may have reduced expectations of a short term devaluation in the CNY, it does increase expectations that the People’s Bank of China will continue to ‘over-tweak’ the currency despite saying it won’t.'
http://www.ig.com/uk/market-update/2016 ... ival-31403

How is your portfolio doing these days?



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[JR8]

Well, it's pretty 'invest and forget'. But wider picture right now has been growth in the US vs slowdown in CN... with many economies stuck and somewhat dependent betwixt the two, i.e. doubly hard to gauge.

The FTSE has been rather languishing of late, (more specifically, within the 6100-6220 channel). It's very nervy about the UK 'BREXIT' vote on the EU due in June or so. So I'm not expecting much joy, or an upside break-out from that channel pre that vote. But things were perking up a a bit, oil price rising, CN printing per above-linked and so on. Then comes the swerve ball this morning in Brussels...

[Wd40]

I had look at several world indices performance in the last 5 yrs. Most are flat to negative, including STI, Hang Seng, Kospi, China, FTSE etc.

Europe, Japan and some countries are up but that is because of massive currency falls.

US is the only market that has gone up significantly both in equities and currency. Kind of strange, such outperformance when the whole world has been languishing.


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[Wd40]

Nice story, about how a private banker fraudulently lost clients money.

Bloomberg - Credit Suisse, the Jailed Banker and an Oligarch's Missing Money http://bloom.bg/1PqQThI

Slightly long, but definitely worth a read.

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[JR8]

We had something similar at our SGn office (before I arrived, and now looong ago). He had set up something of a personal 'shadow-office' in a room at a CBD hotel where he went after hours and printed off faked statements (on legit stationary). He was sniffed out by a colleague of mine two desks along who first joined the dots on him, and got the annual 'President's Award' for it.

It is almost inconceivable to me how these days antics such as this CS guy slipped through the net. It's really stunning IMPO! There can be an element that the top-producers become a kind of 'golden boy' and the rules get slightly bent to facilitate them raking in huge fees.
Sales Manager - 'This trade seems contrary to the clients risk profile, can you explain it?'
Broker - 'The client realises that, and accepts that, and his original authorisation will arrive tomorrow, meanwhile here's a photocopy. And I need to do the trade NOW'
SM - 'Oh ok then, since he's such a big client...'

Even mega-cases like Nick Leeson had parallels. But Credit Suisse, in this day and age. The reputational hit they're going to take from this, ouch!

ps. Perhaps a good job he's in jail, protect him from the oligarchs he's stuffed!