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’Citi’s high carbs diet
It seems like more or less anything can be deemed an asset class these days.
Here’s the latest one from Citigroup analysts: ‘Carbs’. No that’s not McDonalds and Coca Cola, but Canada, Australia,
And the G20 total returns winner is…
Something to take G20 Cannes delegates’ minds off Greece…
How’s this for evidence that the emerging markets growth story is overblown? Of all the G20 countries, the US would have given you the greatest equity returns over the past year,
Citi: EM rate cutters sheathed
If you were expecting widespread easing of policy rates across the emerging world, think again.
Since the end of August three EM central banks have cut rates — Brazil, Israel and Indonesia – but don’t go expecting much more monetary easing,
Time to revisit/rethink EM equities?
Investors are making tentative steps back to emerging market equities.
Last week EM equity funds reported positive flows, on aggregate, for the first time in three months — fund flow data from EPFR Global showed a net inflow of $667m for the week to Wednesday October 19.
Steeling for more commodities volatility
Remember when Vale and BHP, two of the world’s biggest iron ore miners, changed their pricing contract methods with China and Japan?
The move from annual to quarterly contracts came amid resurging Chinese demand for iron ore,
Latin America safe from Europe’s debt crisis, Nomura says
It’s a shame the internet doesn’t do smell-o-vision, as there’s a rich, warm waft of historical irony hanging over this post.
It’s about Latin America being secure from Europe’s debt troubles, especially in terms of its exposure to Spanish banks should they go under.
Brazil’s balance sheet, oil, and the BRL (part 2)
In Part 1 we introduced a recent Nomura paper on how the Brazilian Real is currently overvalued. Here’s the explanation.
The BRL as an oil play
The answer lies in the big oil fields discovered in the last several years off Brazil’s Atlantic coast,
Brazil’s balance sheet, oil, and the BRL (part 1)
To what extent is the current strength of the BRL based on the expectation of something that hasn’t happened yet?
That’s one of the questions asked by Nomura in an intriguing new paper that examines the position of international investors in Brazil,
The hot money speaks on emerging markets
Efforts by emerging market governments and central banks to shut out hot money to protect their economies are doomed to fail – or so says the hot money.
Bart Turtelboom and Karim Abdel-Motaal, who run the emerging markets hedge fund at GLG,
The FX market is now through the looking glass
It seems ingrained in the FX market that rate rises are currency positive, but this has not always been the case. In an environment where inflation is problematic the market asks the question – is the central bank ahead or behind the curve?
Those are the opening thoughts of HSBC’s in-house FX guru David Bloom and team on Monday.
Casualties of the currency war
This is ironic, Brazil.
That’s a Nomura chart showing the Brazilian government as the biggest ‘loser’ of the currency war. You know the war we’re talking about: Brazil was the first and loudest to declare it in 2010.
[Wilmot's PMI tour] BRIC by BRIC II
A slight disappointment from Brazil: PMI New orders were up 0.4 but still below 50. Potentially stabilizing, but no clear sign of rebound.
But then again, the Brazilian real is the most overvalued of all currencies in our real effective exchange rate universe – see chart below:
Jonathan Wilmot: Hell or Heaven in 2011?
Jonathan Wilmot, global strategist at Credit Suisse Investment Bank, sets the scene for next Wednesday’s ‘Around the world in 21 PMIs’ guest editing day at FT Alhpaville.
Heaven or Hell in 2011?
Three questions loom large in our thinking about the coming year.
The LATAM contagion effect
All eyes were on Spanish bond yields AGAIN on Wednesday. Especially as news emerged that the country was freezing, due to market volatility, the start of its €13.5bn issue programme set to sell state-guaranteed power revenue bonds.
When capital controls are the only QE antidote
Are capital controls the most unwelcome comeback since the one-piece jumpsuit?
HSBC’s top analysts and economists look into the issue on Tuesday and slightly beg to differ. Not only have they been more common throughout the recent past than most would care to remember,
Snap news
Breaking pre-market news on Tuesday,
- BP returns to profit; to review dividend policy alongside FY results in early 2011 — statement and results.
- BG announces 2.7bn barrel upgrade for fields in the Santos basin and results — statement and statement.
Capital controls: new front in the ‘currency wars’
South Korea is showing its uncanny knack for timing with its planned new steps to curb capital inflows, just ahead of its star role as host of the upcoming G20 meetings — which are likely to be dominated by discussions of “currency wars”.
Brazil, the clever currency warrior
Yes, Brazil’s finance minister coined the term in the first place.
But, if you’ve been following the currency war, the country’s actually proving to be one of its more curious combatants.
Exhibit A — Brazil’s just moved to toughen up a tax on foreign ownership of bonds issued onshore.
The rush to EM
Here’s a chart that can be a source of either encouragement or worry — or both:
Courtesy of Real Time Economics, the chart shows the growth of Chinese and Brazilian credit card balances:
In 2009,
Currency wars: soundbite of the week
Every now and then, someone comes along and delivers a neat soundbite that captures the zeitgeist and blitzes both the mainstream media and the blogosphere.
Such is the case of Guido Mantega, economist,
Vale and potash: ‘I (only) half believe them’
The Chinese – and more specifically, Sinochem – gained a respite this week from frenzied counter-bid speculation surrounding BHP Billiton’s hostile bid for PotashCorp, following a $1.75bn bond issue by Brazilian mining giant Vale.
Unusual economic indicators, Brazilian plastic surgery edition
Hollywood cheered when the Obama administration’s proposed ‘botox tax’ didn’t make it into the final version of the mammoth health care reform bill. On the other hand, those seeking a year-round golden glow may have been irked that a 10 per cent tax on tans delivered via tanning bed comes into force on July 1.
To Brazil, from Europe with love
How far away can the volatile effects of the eurozone crisis be felt?
As far away as Brazil, apparently.
On Tuesday, the emerging-markets powerhouse experienced what basically amounts to a failed bond auction.
[South Africa 2010] Two very different quant models say Brazil will win World Cup
Continuing our recent theme of financial analysts-turned-football-experts, we bring you a Friday edition of 2010 World Cup predictions. This time the conjectures come from two different financial outfits,
[South Africa 2010] England to win World Cup, says JPM quant model
And we all know those are never wrong, right?
With the 2010 World Cup a mere three weeks away, the trickle of investment bank World Cup research continues apace. Yes, suddenly all the analysts have become football experts going on bookies.
[South Africa 2010] UBS on which stocks – and teams – will win the 2010 World Cup
Expect to see more of these in the coming weeks — the World Cup is, after all, less than a month away.
The analysts at UBS have taken a break from the sovereign debt crisis to make some World Cup “just for kicks”
How not to make emerging market calls
Ah, fresh, nubile — though possibly overheating — Brazil. Somewhere an analyst should be keeping a beady eye on political risk, no doubt. But nothing as bad as a military coup.
Especially not when it’s the analyst calling for one.
[South Africa 2010] World Cup beer goggles = 180bps
A World Cup without beer is like cricket without Pimm’s.
Or a night out in Essex without an alcopop.
But how much does hosting a World Cup football tournament actually boost local beer sales?
According to Sanford Bernstein analysts Trevor Stirling,
Banking bubble (charts)
Warning: this post contains a bubble chart.
Citi’s European banks research team has come up with a fresh take on earnings and valuation bubbles across major markets.
Analysts led by Ronit Ghose compared the market value of banks to the size of the economies in which they are based – a measure dubbed ”penetration”.
Stop the Carnival, I want to get off
When everyone in the world has got the hots for you, things can get a little overheated. So spare a little sympathy for Brazil’s markets right now, as foreign investors fall over themselves to slobber over the girl from Ipanema.