Posts from Friday Jun 1 2012

Declining competitiveness in the emerging world

IMD has released its latest competitiveness rankings, which measure ”how well countries manage their economic and human resources to increase their prosperity”. Needless to say, the usual European suspects are right down the bottom and falling: Spain (39), Portugal (41) and Greece (58).

More interestingly, research by the Switzerland-based business school confirms what we have suspected for some time — emerging countries are losing competitiveness. Read more

On Spain’s banking recap and capital flight

Spain is leaking capital. Data from the Bank of Spain released yesterday showed that almost €100bn has left the country in the first three months of the year (chart from El Pais):

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Yen weirdness du jour

The euro dropped below €1.23 as payrolls missed hard and then the yen… jerked:

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Greece STILL can’t decide how to vote

Alexis Tsipras, the leader of far left Syriza, took to the airways on Friday morning to declare he will essentially cancel austerity in Greece should his party come first in the upcoming elections. He wants the vote to be a sort of referendum on terminating the bailout agreement. And, unsurprisingly, his message has been going down well with the voters. The latest poll gives his party a six point lead. But results of the second round of voting are as difficult to predict as the first.

We wanted to take a closer look at the figures as they are the last set we’re going to get. Friday is the last day poll are allowed to be published ahead of the June 17 elections. Read more

May’s payrolls number is… oh dear. +69,000

Consensus had been 150k. A big revision downward in April’s figure of 115,000 too:

The change in total nonfarm payroll employment for March was revised from +154,000 to +143,000, and the change for April was revised from +115,000 to +77,000. Read more

We’re doing a Reddit IAmA!

Friday, June 1, from 3pm London time, 10am EST.

Update: We took questions for about eight hours. It was was a lot of fun! Thanks to all of those who dropped by. The full transcript is available hereRead more

Probably the most important chart in the world right now

The Dollar Index (via MarketWatch):

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XGD Crncy

Type XGD Crncy into your Bloomberg terminal…

… and as of this week you get (click to enlarge): Read more

Nomura: toilet-humour

This novel proposal is from a concerned Nomura shareholder (h/t to reader JZ):

Proposal 12: Amendment to the Articles of Incorporation (Regarding overhaul of basic daily movements) Details of Proposal: It should be stipulated in the Articles of Incorporation that all toilets within the Company’s offices shall be Japanese-style toilets, thereby toughening the legs and loins and hunkering down on a daily basis, aiming at achieving 4-digit stock prices. Read more

Markets Live transcript 1 Jun 2012

Live markets commentary from FT.com 

Houston, we have a commodity abundance issue

From S&P Indices weekly commodities note by Mike McGlone on Friday:

The S&P GSCI declined 12.98% in May reversing earlier in-the-year gains for a year-to-date (YTD) decline of 8.33%.  May 2012 marked the worst monthly decline since the 13.19% loss in May 2010Increasing global economic slowdown fears and growing supplies of many commodities took their toll on the commodities market in May, along with declining equities and the increasing value of the U.S. dollar as measured by the month-to-date (MTD) decline of 6.01% in the S&P 500 and 5.46% increase in the U.S. dollar index. Energy, previously the stalwart sector, was the biggest drag on S&P GSCI returns on the month, as measured by the MTD decline of 15.30% in the S&P GSCI Energy index. Read more

The (early) Lunch Wrap

Good morning New York…

FT AlPHAVILLE Read more

Spain at the back of the grid

One eurozone country is looking marginally less bad on a relative basis, according to May purchasing manager indices for the manufacturing sector released on Friday:

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About those Chinese LME copper deliveries…

If you’ve been following the copper story, you’ll know that Chinese warehouses have over the last few years been rammed full of copper inventory which has been doubling up as collateral for financing agreements with Chinese businesses.

You also might remember this story from last month about how China was sending copper shipments to LME warehouses, where fundamentals were much tighter, despite its usual position as a copper importer. Read more

Just in case you aren’t bored of negative yield stories yet…

German 2 year bond yields went negative on Friday:

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Krona watch

The collapse in sterling is really quite eye-catching.  Just in time for summer…

Further reading

Elsewhere on Friday,

- The economic costs of fearRead more

The 6am Cut London

China’s manufacturing sector growth continued to slow in May according to both official and unofficial PMIs, reports the FT. HSBC’s index was 47.3 for May, down from 49.3 in April and lower than the 47.8 flash estimate published during the month. The official PMI figure was 50.4, a big fall from 53.3 a month earlier and much lower than the median economists’ forecast of 52. Asian stocks and oil prices slumped on the news, says Bloomberg, while the dollar advanced. Other Asian PMIs were also poor, says the WSJ: Australia fell 1.5 points to 42.4; indexes in South Korea and Taiwan remained barely positive but both showed growth slowing; South Korea’s HSBC PMI fell to 51.0 from 51.9, and Taiwan’s to 50.5 from 51.2.

The ECB stepped up pressure on Thursday for a joint guarantee on bank deposits across the eurozone, reports Reuters, saying Europe needed new tools to fight bank runs. The European Commission’s top economic official, Olli Rehn, warned that the single currency area could disintegrate without stronger crisis-fighting mechanisms and tough fiscal discipline. Spanish economy minister Luis de Guindos said on Thursday “the future of the euro is going to be at play in the next weeks in Spain and Italy,” reports BloombergRead more

Overnight markets: Down

Asian stocks fell on Chinese PMI numbers for May; the euro fell to a 23-month low, and the Australian dollar and Korean won both fell against the US dollar, says the WSJ.

The MSCI Asia Pacific index shed 0.5 per cent with Japan’s Nikkei 225 Stock Average off 1.1 per cent, Australia’s S&P/ASX 200 index down 1 per cent and South Korea’s Kospi Composite index 0.5 per cent lower. Hong Kong’s Hang Seng index was 0.5 per cent lower. Read more

China’s May PMIs look weak from either angle

Both the official and unofficial May PMIs for China were disappointing for anyone expecting above-trend growth* from the manufacturing survey. Markets, of course, do not like this. Here’s a few key points:

Official PMI: 50.4 for May —  still in expansionary territory, but well short of the 52 median forecast from Bloomberg’s economist survey, and a big drop from 53.3 in April. Read more