Chillin' out till it needs to be funded
For those familiar with economic pulls and the symptoms of dullness and slowing jobs hitting markets Asia’s considerable assumption of power last week and today’s RBA decision to try and drive the Aussie down again, would have just given hope to no end as Libyan meetings and Greek compromises over the weekend ready investors and funds for another almost perfectly sequenced decision on rates from the New Zealand RBNZ, Bank of England and the ECB.
Japan has of course reached some degree of closure with a knowingness in the markets about Japan’s three shut out districts. Also with the Kanto district under intermittent bouts of light and darkness due to power cuts affecting 38% of Japan’s GDP in the district, the Auto sector has just been primed for a lot of fresh investment after the shutdown. That may work well with the Euro’s survival instincts for this week and more in the summer as these two regions of the earlier developed world claw back with timely repayments, and stay away from bank rate cuts to keep the fragile recovery afloat. The double dip in the USA is a far cry especially as prices depressing already from a QE2 withdrawal means that thus there will be good space for QE3, only the reserves at banks excess held by the Fed already $1.5 tln at 10% of the US GDP .
Concomitant with the PMI of 55 from 52.8 a month ago, US economy may well turn southward and Credit take off ruled out instead of markets recovering, but chances are Equities will stay on course for a bumper harvest in the US, delaying extra funds moving to Emerging Markets too soon while Japan absorbs the lack of interest in Africa and China remains a favourite destination after everything has passed by. The dollar thus remains weak further this year, unless ECB and the BOE turn around on their heads in the middle of dinner today and tomorrow, spoiling Alice’s ( if you are in wonderland) or Obelix’s ( if you are in Gaul) party and bringing the dollar back up to “break inflation’s back”. Barring that unlikely day dream however, and Guus Hiddink firmly in station at Chelsea, its time for the dark and dreary summers of England to go away and leave behind a sunny day.
It is also a nice time for the grand prix to revv things up from Turkey to France literally as retail foot falls and their troublesome diagnosis is what is keeping things dull in London esp because of the unholy nexus in commercial real estate and thus lack of opportunities for PE to turnaround promising retailers even as luxury goods and consumption have otherwise remained healthy thru 2010 and even most of 2011, courtesy the hot China sun. Although, in the flippantly circuitous nature of things I might also off chance comment tha Alex’s having abudget may look the least promising in this coming season but the Sports Economy from Rugby to NFL, IPL to the Carribean may well turnaround a few industries from media to aviation and telecoms
On the agenda though, we look to patch a few cords in and over hear the next 5 years of the perfect storm being played out again very very soon as the double dip bogey passes by and the rites of passage keep things as is in Elections 2012 in the US. A Latin America jamboree is on the cards for due diligence.