Yesterday saw a few more weaker data points out of Australia and South Korea that are worthy of mention. Namely, Australian consumer confidence dropped again to around the lowest it’s been since 2009 and South Korea unemployment remained at its cycle highs. No matter what the top line China GDP number was, there is no […]
Yesterday and today were host to a few more macro data points all signaling basically the same thing – a synchronized slowdown in Asia which appears to be driven by China. In the five charts below we show that Chinese CPI remains anemic while PPI just made a new cycle low, Australian unemployment ticked up, […]
It seems as though each day we see more evidence of China’s economic slowing affecting its neighbors. When a force as large as China slows dramatically, we should expect as much. Here are today’s regional economic releases: Taiwan YoY export growth hitting multi-year lows: Taiwan CPI in deflation all year: Philippines CPI at decade lows:
While some of the post Greferendum moves in financial markets could have been and were predicted by the financial punditry – lower euro, lower stocks, lower US bond yields, higher gold – the real moves have appeared elsewhere. Indeed, as of this writing the euro is only lower against the USD by less than .5%, […]
The last few weeks has seen some notable weakness in a few economic indicators in peripheral Asian countries. We’ve noted the connection between falling Chinese industrial output and copper and oil prices for some time, but now the Chinese slowdown is being felt in things like Hong Kong, South Korean, and Thai trade as well […]
Asset allocation decisions are best not made in a vacuum and thus a major consideration when investing internationally is the currency risk one is willing to accept (assuming unhedged positions). In today’s world of zero interest rates, the dominant factor in currency movements seems to be the relative size and rate of change in QE programs […]
Today’s cyclical jolt aside, it appears from glancing at relative performance charts of growth counter-cyclicals (our code wording for the Consumer Staples and Health Care Sectors) that they could be poised for a relative performance breakout. Indeed, in all major regions of the world, growth counter-cyclicals are outperforming – or look poised for another leg […]
These statistics are not really news, but we thought we’d just remind readers of the perils of the Chinese economic model in its current state. In a simple phrase: Chinese debt is not getting the proverbial bang for the yuan that it used to. What we mean is simply that loan growth has continued to […]
TIPS derived breakeven inflation expectations have started to fall once again in May. For a little context, starting in last June, breakeven inflation started a steady march lower that lasted until January of this year. Since that time, we have seen a rebound in inflation expectations. For example, five-year TIPS derived breakeven inflation fell from […]
When the ECB announced plans for its own asset purchase program back in January, we commented on the big difference in the relationship between those purchases and equity performance when comparing the U.S. and Europe. As the MSCI Europe Index hovers near decade highs (and asset purchases appear poised to expand at an accelerated pace over the […]