Chillin' out till it needs to be funded
PIMCO finally paid with all of US Bond markets post weekend as it dealt with the other blow that set the controversy of El-Erian’s to rest in a dust cloud as markets opened eagerly pushing down yields again, with the grain of a market not bothering with the Fed enjoying its unique power and holding markets up, Dalyskas returning to the new CIO’s old Bond fund role, as Ivascyn takes up the empty offices of the Founder.
Mather and Wohra are still around though Neil in charge of Emerging markets strategies apparently left in a cloud of political dust and equities never got off at still the largest retirement fund strategist.
Emerging market Banks StanChart and HSBC who recently pushed back their US plans for the previous edition’s failures (StanC never really tried, probably except Iranian interests happened to it in US and Americas) have already been joined by most others after the Fed, DOJ and Treasury pushed back with more regulation for Foreign banks. Except of course Anshu Jain’s Deutsche Bank, with a Qatari investor in tow, who are merrily waiting , playing the Piper’s gag to whomever would listen to them at the World’s largest Financial markets’ doors as Barclays and UBS enjoin fresh troubles. But all’s really well if you looka t the deal markets, big money having survived the credit crisis relatively easily and the small 9% New Home Sales pie keeping mid market US Banks happy and Wells Fargo as the new enigma of the Big Four, building dominant market shares in home loans as the Deal markets start off to theior tape post US government hit on new regulations against reverse deals.
All that just means, in true blue royal fashion the Brussels headed EC will be hitting back at US efforts on the continent ever more closely too, and European Banks may also get to see some really flexible LTRO to make credit positive inter bank markets and push out the few remaining quarters of negative GDP growth for the 27 nation bloc, yet to find a cure for its 40% youth unemployment menagerie as Germany tries to hold off accommodating partners on the bloc.
The EUR has gone vertical on the 2014 charts , notwithstanding a short burst of support from the island economy across the pond that continues to battle more fines (directly because they now relate to the fix in the GBP EUR cross rate) We expect to return to our reserve currency theme soon and catch up with the 2014 happenings as we continue to optimistically hope for the breakdown in the cross rate as well as the GBP deserve’s much higher levels and the Euro won’t stop before 1.20 levels now, 1.26 marks within sight and Gold and Oil trundling down the never seen gradient into 2015 without a change in outlook.
The AUD is ready for another big push on the new range as it loses 6.7% in the month.
Meanwhile back in the domestic markets US domestic home sales hit a secular downturn complete with the Pending Home Sales index showing a 1% cut from July, showing there are no more first time buyers and inventories are down too as in the Existing home Sales markets. Worryingly the newly resurgent midwest and Boston markets seemed to join the disappointed buyers in the New York and West Coast markets in housing too soon, given the sharper cuts in the Midwest and the resilient start to 2014 at the top . The US fiscal year winds down with Indian Premier in the USA getting some nice cheers from crowds to hope for another thaw in that new unexplored axis for both US and India , both Top 4 economies in the coming climb-backs of growth memes
The MidWest data reports continue this week with the Chicago PMI tomorrow ( a national barometer though) and though the Private ADP jobs report will offer a sneak preview and a big warning ahead of Friday, markets at an all time optimistic high just a week or two back are likely to continue trying to climb back as shorts remain at the rarest of rare low scores and bonds continue in a good yield tailspin for another fortnight into October before Holiday season catches up / refuses to catch up with/for the Economy
The next month Consumer Credit offtake will likely again show deepening furrows in consumer pockets with still enough left over for a splurge on the cards during Holiday season shopping
Dodge RAM, Toyota RAV4 and the Rogue are the biggest winners on last year sales growth till August and September is likely to show like the new home sales market a much bigger bump for the smaller share SUVs than the Cars which had a record 2013, GM and Ford holding ground but barely as Nissan and Chrysler complete the catch up game in Sales. Yes, Toyota has been selling 200k cars every month too.
The big incentives though will drive Car sales to a near double digit growth next week and a deal seeking buyer is much better than none at all!