All things global macro with a specific focus on FX and Rates; views not that of my employer. Contributor: https://teapaw.org/t.co/7wBZ9uKYSA
London, England
Joined March 2018
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Strong upside surprise in NFP, printing at 165k, more than double the Cons f/c, with positive back revisions of 84k, and a drop in the Ue rate from 4.2% to 4.1%.
I say "surprise"... it isn't for anyone reading this month's surveys...
Simon Harvey retweeted
German factory order expansion continued to broaden in September AI, defence and fiscal are driving a capex cycle.
"Midterm Record Set With 57 Million Early Ballots Cast" .... Now from memory, early mail-in ballots were bullish Democrats no?
Simon Harvey retweeted
🚨Biggest move of the day (so far) across the most closely watched races on WSL PREDICT<GO>: Michigan Senate, El-Sayed (D) now 67%, down 9 points.
🗳️Tracking this weekend's midterm developments and how they hit our election dashboards on @TheTerminal.
Michigan Senate: @Kalshi ticked lower within minutes of the ABC News headline that Democrat Haley Stevens appeared alongside Republican Mike Rogers. El-Sayed (D) eased from 77% to 68% and Rogers (R) edged up from 24% to 32%. Not a big repricing, but a notable development in a closely watched race.
So the iShares Semi index is back just 1% above its pre-Anthropic low. So before massive CapEx commitments were bearish, now its bearish that the balance sheet ex-AI can't sustain these CapEx commitments?
Seems sentiment is close to rock bottom on this trade now...
Simon Harvey retweeted
The UK's unsustainable fiscal arithmetic: interest and welfare up, investment down . . . chart shows change in percentage points as a share of GDP
Reflecting on Wednesday’s Budget, I stick to my view that it is one that markets can live with. Judging by the press coverage, however, the reception of the public appears less than lukewarm. No wonder.
For all the Prime Minister’s claims to have big ambitions and a 10-year plan, his government’s first Budget was a small and timid affair.
Critically, it did not even attempt to tackle a key voter frustration: that more of their taxes are going on debt interest and welfare – which is set to rise by an eye-watering amount of almost £100bn between 2025-26 and 2031-32.
On the OBR’s projections, welfare rises by 0.5 percentage points of GDP over this period while debt interest jumps 0.7 points. Meanwhile, public sector net investment is set to fall by 0.5 points. Total spending rises by 0.2 points to 44.7% of GDP. So the cut in investment pays for only part of those increases.
This mix of decisions is decidedly anti-growth: a rising share of spending, partly financed by borrowing, that goes on welfare and interest rather than on productivity-enhancing investment – which is badly needed to lift trend growth and get public finances on a less unsustainable track.
#Budget2026 #burnham #Healey
Walter wrecking peoples heads with some ludicrous impulse response estimates... n.b. Lagarde said yields are up ~35bps across the Eurozone
Must say, I’m a bit puzzled by the drop in European yields…. Sure the ECB says underlying inflation broadly stable, no visible second round effects, but it’s the energy environment which matters, and here it had to acknowledge the upside risks and likelihood of 2nd round effects
So Lagarde seen stepping down on Feb 7th after the Feb 4th meeting (the first scheduled for next year), with a new President required for the Mar meeting and projections.
A decision over de Cos vs Knot is now expedited.
