Yuan

Grexit, U.S. & Canada Contraction

Grexit, U.S. & Canada Contraction

Greece is now back in recession while a €1.5bn IMF payment looms just 2 days away. Greece, now led ever deeper astray by a stubbornly defiant Government, is undeniably the champions when it comes to perpetually kicking the can down the road.

Tuesday's data showed that inflation in the currency union warmed to 0.3% YoY from 0.2% in April - yet another sign that Greece is being left far in the wake of a ship that has long set sail.

The toil of staying in the Eurozone, being in a constant and never ending tug of war, and having to cede to the demands of its creditors whom will ultimately have their way just adds fodder to the chimeric spirit of a once independent and free Greece.

All these indicates to us that the risk of a Grexit (Greek Exit) has never been greater, although it might not seem so on the surface.The impetus to leave the Euro and write off just about all of its external liabilities looks to be the path of least resistance to us. The upside risks of a Grexit is undervalued and which probabilities are overly discounted.

 

April Review & Looking Forward (Part 2: Strategy)

April Review & Looking Forward (Part 2: Strategy)

In Part 1 of this note reviewing the eventful month of April, we spoke about how the tide was shifting in many of the developing economies with Europe's economy and financial conditions showing good signs of improvement while the American economy was undoubtedly slowing. We also spoke about macro economic cycles and how such polarities in the major economies have created exclusive opportunities in the financial markets.

With the current market climate hallmarked by panic, fear, and ephemeral swings, we have detected a couple of opportunities over the last couple of weeks that look promising in their own rights. In the last 2 weeks alone, a few records have already gone down the record books. This is heaven for opportunists.

In today's note, we wish to share our views and ongoing opinions on how we view the current market landscape and the strategies that we are and will likely be implementing to take advantage of the substantially different dynamics in today's environment.

April Review & Looking Forward (Part 1: Analysis)

April Review & Looking Forward (Part 1: Analysis)

April is set to close with a bang on what is easily the busiest week in terms of economic data releases for a long time. We have various sets of CPI and employment data releases from Europe the developed economiesGDP figures are also set to hit the wires, chiefly from the UK, US, and Canada

Central banks will be in hard focus where Australia's RBA fired the first salvo, followed by the FOMC, with New Zealand's RBNZ following suit. The BoJ will also hold its press conference. It is safe to say the market's attention will be fixated on the US 1Q15 GDP figures and the ensuing FOMC statement and press conference.

In this note, we will briefly go over some of the key developments we have seen in April across the globe from the American economy, to the renewed conflagrations in the tug of war between Greece and its creditors, to China's economic woes and financial troubles.

In Part 2, we will touch on the various markets we cover, present our views and purported strategies to trade them going forward.

China's Stock Buying Mania In 3 Charts

China's Stock Buying Mania In 3 Charts

Back in December, we wrote about how China was playing Palov's dog when on one hand it tried to clamp down on "excessive" speculation, while continuing to provide fodder for hungry speculators with the other. Fast forward 4 months and the results of the Politburo's efforts become evident, and rather grotesquely so.

As Xi Jing Ping along with his administration continues attempting to orchestrate a soft landing of China's economy, much to the hilarity of those that actually watch real economic and financial data emanating from the world's second largest economy, it seems the retail community has been much less patient about another economic growth renaissance and has taken their tokens directly to the financial markets in hopes of striking it big. 

If readers need a definition of what a mania is, the charts below should shed some light. Enjoy..