Distress in the oil market risks distress in the high yield bonds of energy producers

The VIX, which has been subdued for much of the year, jumped sharply last week to a level that is the highest December level for the last five years except for 2011. However, we suspect that much of the market … Read More

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The oil price, hedge funds and what it all may mean for US high yield bonds

After 11 straight days of gains, the Shanghai Composite hit some volatility today on discussions about restrictions on margin financing. This is to be welcomed, leverage is always a destabilising factor in markets and there is no doubt that leverage … Read More

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US shoppers have spent $50bn extra that would have gone on gasoline but watch out for a strengthening dollar

The Thanksgiving holiday always leads to lower volumes in markets and a seasonal focus on the US consumer as the ‘Black Friday’ and now cyber Monday consumption statistics are analysed for insights into the strength or otherwise of the US … Read More

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The new Chinese Silk Road should bring a positive return on capital, drive trade and make the economy more efficient

Next week sees Thanksgiving in the US and effectively the start of ‘the holidays’, producing shorter trading weeks and lots of choppy data. The G20 summit in Brisbane produced more positive news from China on trade, in this case with … Read More

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Japan set for snap election to help drive reforms / Will the mid terms force a decision on Keystone XL pipeline?

Another week and another surprise from Japan. This time we are led to understand there will be a snap election, probably on December 14th, to act as a referendum on the need to raise the consumption tax for a second … Read More

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Strong dollar, weak yen. What are the investment implications?

Last week the US ended their QE and the Japanese accelerated theirs, pushing the yen down and the Nikkei up.  Some regard this as little more than a week yen policy, but it does have other direct impacts.  Unlike the … Read More

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The end of QE3 / A carefully constructed multi-dimensional plan to open up China’s capital markets

After the October wobbles we saw a sharp bounce on Wall Street (S&P up almost 9%)  before some technical activity retesting both recent highs and lows. Markets remain nervous but not panicky; the risk managers have done their bit and … Read More

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The Alibaba roadshow runs into town but is it worth 20 times the $8bn it is aiming to raise?

This week in Hong Kong is one of the busiest of the year for the equity community. The giant CLSA conference is in town with hundreds of companies and literally thousands of investors attending from all over the world. This … Read More

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Conspicuous consumption going out of fashion in China

In the last Market Thinking, I discussed the euro against the dollar, pointing out the likely conclusions that chart followers might draw from the apparent reversal of the euro strength from the lows of 2012. The moves by the European … Read More

Posted in Commodities, Currency, Luxury goods | Leave a comment

Jackson Hole – and the expectation of Eurozone QE – has been the real driver of markets

The extended Labor Day weekend in the US traditionally marks the end of summer, and markets returning will find a very crowded calendar of US data this week, most of which is likely to surprise on the upside. However, the … Read More

Posted in Quantitative Easing and Extraordinary Monetary Measures, Uncategorized | Leave a comment
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