Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Daily Shot: Beyond Greece

Published 07/13/2015, 07:17 AM
Updated 07/09/2023, 06:31 AM

Outside of Greece, the Eurozone continues to show signs of economic recovery. Italy is now pulling out of its recession. The area's economy desperately needs to put the Greek crisis behind it.
Italian Industrial Production

Leaving Europe for now, we see credit growth in India moderating. The banking system in India is in need of reform in order to support the brisk economic growth the nation is targeting. Further rate cuts from the RBI are likely.
Indian Loan Growth

Turning to Australia, the markets now expect almost a full rate cut by early next year, taking the nation deeper into record-low interest rates.
Cash Rate Pricing

Now to Venezuela, where we see the bolívar continuing to collapse in the "unofficial" markets. One dollar now costs over 600 bolívares. Inflation measures are no longer meaningful (and not published any more), while food shortages are becoming acute.
Venezuelan Bolivar

Moreover, trade for this import-dependent nation is becoming more difficult as the viability of the nation's credit comes into question. Greece should be paying attention.
Japan Suspends Trade Insurance

Back in the United States we have a number of developments I'd like to cover.
Deutsche Bank (XETRA:DBKGn) believes that the Fed's "liftoff" will not take place until next year.
Deutsche Bank Note

Here is the latest projection of timing to get to the full 25 basis points based on the overnight index swap curve (similar to Fed Funds futures).
Overnight Index Swap

The Fed's approach to reinvestment of maturing treasuries will be a major component of the rate normalisation process. The Fed's decision on this topic will be perhaps just as important as the rate decision.

Should the Fed's balance sheet begin to naturally shrink or will it remain the same for longer?

Moreover, will the Fed buy longer dated treasuries to replace the maturing ones, creating what amounts to a mini-Operation Twist?

Given how dovish the Fed has been, maturing treasuries will likely be all replaced for now – although by short-term notes.
Maturing Treasuries

Speaking of the US economy, here is an important trend I'd like to point out. Below is the amount of residential real estate loans as percentage of total loans held by US banks. Mortgage lending continues to lag other credit growth.
Residential Loans

Now some food for thought...

How far does $100 go in each state (relative to the national average)? Higher numbers indicate you can get more for your money. Buying power in NY is especially low, weighted down by NYC.
USD

Disclosure: Originally published at Saxo Bank TradingFloor.com

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.