Volume light, indices flat. Some 4.6bn shares were traded on US exchanges on Tuesday, compared to a 6.6bn daily average this year (Reuters). The S&P 500 edged down 0.08 per cent to 1,409.30. Ten-year Treasury yields fell to a three-week low ahead of Jackson Hole (Bloomberg). Read more
Currencies in a drought, from Nomura:
If you hit your head hard enough, you’re bound to start forgetting things.
Says this guy here with our paraphrasing, naturally (click through for the full paper):
“I’m really sick of this government giving away our taxes to those corrupt Greeks,” said the owner of a pet shop in Amsterdam who asked not to be identified by name because he does not declare all his income to the authorities.
How on Earth did we miss this last week, via Reuters? (H/T Pawelmorski) Read more
That the Australian economy may be in trouble will not be news to FT Alphaville readers.
We’ve been warning for a good while that the country is uniquely exposed to the commodity super-cycle, an overvalued currency, a real-estate bubble, not to mention the Chinese slowdown. Read more
Live markets commentary from FT.com
Not our words but Societe Generale’s, or at least their China macro strategist Wei Yao, who believes credit risk is worse than official non-performing loan data suggests. So much worse that — while government intervention will prevent an outright crisis — a “multi-year and bumpy” landing is now expected by SocGen.
Non-performing loans are still at a fairly low level of 0.9 per cent across China, notes Wei, although about three times that amount are “special mention” loans, or those in doubt but still performing. Rates can also rise quickly, thanks in part to China’s tangled shadow banking system: in one year, Wenzhou went from the lowest rate of any Chinese city at 0.37 per cent to 2.85 per cent at the end of July. Read more
Elsewhere on Tuesday,
– Another US recession indicator. Read more
Asian shares were under pressure as investors remained cautious ahead of US GDP and the Jackson Hole central bankers’ meeting later in the week. The MSCI Asia Pacific index slipped 0.3 per cent with Japan’s Nikkei 225 Stock Average down 0.2 per cent, South Korea’s Kospi Composite index off 0.1 per cent and Australia’s S&P/ASX 200 index flat. (Financial Times)
Japan’s government lowered its economic outlook, cutting its forecasts for personal consumption, homebuilding, exports, imports and industrial production. Some economists believe the country’s economy will contract this quarter. (Bloomberg) Read more