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Great Graphic: Real Wage Growth in G7 2008-2012

January 31, 2014
This Great Graphic was posted by Ed Conway.  It shows real wage growth in the G7 countries, or indeed the lack thereof.  Ed's point is that the UK experienced the largest decline in real wages of the group.  Fair enough.   Some will argue that it is precisely this decline in real wages that has allowed UK labor market to outperform.  
Canada is…
Great Graphic: Real Wage Growth in G7 2008-2012 Great Graphic: Real Wage Growth in G7 2008-2012 Reviewed by Marc Chandler on January 31, 2014 Rating: 5
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Dollar and Yen Finish the Month on Firm Footing

January 31, 2014
The US dollar is finishing the week and month on a firm note.  It has risen against all the major and emerging market currencies, but the Japanese yen over the course of the month. On the day, this is the same pattern, but a few emerging market currencies, like the Malaysian ringgit and Taiwanese dollar are slightly firmer on month end flows.  
Eme…
Dollar and Yen Finish the Month on Firm Footing Dollar and Yen Finish the Month on Firm Footing Reviewed by Marc Chandler on January 31, 2014 Rating: 5
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Great Graphic: What are the Most Pressing Issues in the UK ?

January 31, 2014
This Great Graphic is from the Financial Times.   It shows the results of a You Gov survey in the UK, asking what are the most important issues facing the country. 

Despite growth accelerating last year, a stock market near multi-year highs (when the survey was conducted), mortgage approvals at 6 month high, the economy remains the number one issue…
Great Graphic: What are the Most Pressing Issues in the UK ? Great Graphic: What are the Most Pressing Issues in the UK ? Reviewed by Marc Chandler on January 31, 2014 Rating: 5
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Think Samurai over JGBs

January 30, 2014
Last year, we suggested that Abenomics might be more beneficial for small cap Japanese companies than large caps. Sure enough, the JASDAQ easily outperformed the Nikkei. In fact, the JASDAQ is still doing better than the Nikkei. This year, the JASDAQ is up 3%, while the Nikkei is off almost 8%.
Even though Japanese interest rates are extremel…
Think Samurai over JGBs Think Samurai over JGBs Reviewed by Marc Chandler on January 30, 2014 Rating: 5
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Emerging Markets: What has Changed

January 30, 2014
(from my colleagues Dr. Win Thin and Ilan Solot)

With their backs against the wall, policy changes are ramping up amongst major EM countries.  Yet the positive impact has been limited so far.  We do note that countries that tightened aggressively and preemptively last year are seeing their currencies hold up better than those that are late to the g…
Emerging Markets: What has Changed Emerging Markets: What has Changed Reviewed by Marc Chandler on January 30, 2014 Rating: 5
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Good GDP, Soft Deflator

January 30, 2014
US Q4 GDP grew at an annualized pace of 3.2% in Q4, spot in line with expectations. This follows the 4.1% growth in Q3.  Still, the data is unlikely to quiet the skeptics who argue the US economy has become dependent on the yield compression of quantitative easing. 
After all this kind of growth has been seen before, only to falter.  The growth in …
Good GDP, Soft Deflator Good GDP, Soft Deflator Reviewed by Marc Chandler on January 30, 2014 Rating: 5
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Dollar Bid

January 30, 2014
The US dollar is posting across the board gains as the global capital markets continue to be unsettled. The yen is holding its own against the dollar, but is firmer on the crosses. Emerging market assets and currencies remain under pressure.
The Fed's decision to continue to taper made no reference to the market turmoil. The key take away …
Dollar Bid Dollar Bid Reviewed by Marc Chandler on January 30, 2014 Rating: 5
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Evolution of Mom Dancing

January 30, 2014
In honor of Michelle Obama's under appreciated role in last night's SOTU my brilliant webmaster thought it would be a good idea to post this great video of her and Jimmy Fallon performing the "Evolution of Mom Dancing". Happy Thursday!
Evolution of Mom Dancing Evolution of Mom Dancing Reviewed by magonomics on January 30, 2014 Rating: 5
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Fed Stays Course,

January 29, 2014
The Federal Reserve announced it will continue with the course outlined last month.  It will reduce the long-term assets it purchases by another $10 bln in February.  That will bring its purchases to $65 bln a month, which is still about 50% larger than QE3 when it was initially announced, before Operation Twist purchases were folded into it.  
Not…
Fed Stays Course, Fed Stays Course, Reviewed by Marc Chandler on January 29, 2014 Rating: 5
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Yen Squeezed Higher

January 29, 2014
The renewed pressure on emerging markets is seeing short yen positions squeezed again.  The yen is easily the strongest currency on the day, rising about 0.75% against the dollar.  This month, it has risen a little more than 3%.  The New Zealand dollar is the second strongest currency this month, gaining about 0.75% against the dollar.  The RBNZ m…
Yen Squeezed Higher Yen Squeezed Higher Reviewed by Marc Chandler on January 29, 2014 Rating: 5
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Turkey Moves, Focus Shifts to Fed

January 29, 2014
The US dollar is little changed against the major currencies, while the emerging market currencies are more mixed, ahead of the FOMC statement later today.    Global equities are higher.  Core bond markets are lower, while Spain and Italian bonds continue to outperform.  
The most important development has been the dramatic rate hike by the centra…
Turkey Moves, Focus Shifts to Fed Turkey Moves, Focus Shifts to Fed Reviewed by Marc Chandler on January 29, 2014 Rating: 5
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Great Graphic: Inequality and Government Response

January 28, 2014
In the run-up to US President Obama's 5th State of the Union Speech, he indicated he will sign an executive order to raise the minimum wage for new federal contract employees to $10.10 an hour.  The current applicable federal minimum wage is $7.25.   
The new minimum wage will not apply to workers under existing federal contractors; only new co…
Great Graphic: Inequality and Government Response Great Graphic: Inequality and Government Response Reviewed by Marc Chandler on January 28, 2014 Rating: 5
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Italian Events Spinning Away from the Letta and Alfano Government

January 28, 2014
Political developments in Italy are happening faster than Prime Minister Letta can maneuver.  The economy he is overseeing is the poster child of ECB President Draghi's assessment of a weak, fragile and uneven recovery in the euro area.   
While Spain's Target2 imbalances are gradually declining, Italy's are edging higher.   The economy…
Italian Events Spinning Away from the Letta and Alfano Government Italian Events Spinning Away from the Letta and Alfano Government Reviewed by Marc Chandler on January 28, 2014 Rating: 5
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Global Capital Markets Finding Surer Footing

January 28, 2014
There continues to be a gradual drift back to the forces that were in play before the drama of the second half of last week.  While most Asian bourses were lower, with the MSCI Asia-Pacific Index off almost 0.5%, European markets are higher and the US is called about 0.5% better.  Core bond markets are mostly lower, while the peripheral bonds have…
Global Capital Markets Finding Surer Footing Global Capital Markets Finding Surer Footing Reviewed by Marc Chandler on January 28, 2014 Rating: 5
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Cool Video: CNBC Squawk Box: EM Pressure, but Crisis is Localized

January 27, 2014
This Cool Video is from the discussion I participated in on CNBC's Squawk Box (Jan 27). I argued that the most acute pressure on emerging markets was home grown, and, while there was contagion elsewhere, it is not a 1998-1998 emerging market crisis.  Many emerging market countries have amassed large currency reserves that act like a self-insu…
Cool Video: CNBC Squawk Box: EM Pressure, but Crisis is Localized Cool Video: CNBC Squawk Box: EM Pressure, but Crisis is Localized Reviewed by Marc Chandler on January 27, 2014 Rating: 5
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China's Control Challenge

January 27, 2014
China is experiencing problems with its moon rover, Jade Rabbit. The problem is emblematic of a larger problem that ails China. It is not so much about the quality of the output, but what the Xinhua news agency called "mechanical control abnormality". 
The rapid growth of the economy in size and complexity means that the control that th…
China's Control Challenge China's Control Challenge Reviewed by Marc Chandler on January 27, 2014 Rating: 5
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Emerging Market Preview of the Week Ahead

January 27, 2014
(from my colleagues Dr. Win Thin and Ilan Solot) 

Israeli central bank meets today and is expected to keep rates steady at 1.0%. Price pressures remain low, with CPI rising only 1.8% y/y in December and is right near the center of its 1-3% target range. We continue to believe that shekel strength would be the tipping point for another rate cut, b…
Emerging Market Preview of the Week Ahead Emerging Market Preview of the Week Ahead Reviewed by Marc Chandler on January 27, 2014 Rating: 5
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Fragile Monday

January 27, 2014
The major currencies are consolidating, but many of the emerging market currencies, including the South African rang, Turkish lira, Indian rupee, Russian rouble, Polish zloty and Hungarian forint remain under pressure.
Asian equities followed the US pre-weekend slide, and European bourses are also playing a little catch-up.   The early call is for …
Fragile Monday Fragile Monday Reviewed by Marc Chandler on January 27, 2014 Rating: 5
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Deciphering the Investment Climate

January 26, 2014
The global capital markets imploded in the second half of last week and investors spent the weekend contemplating the significance.  The main focus was on the emerging markets, which were especially hard hit.  
American-firsters (the tendency on the political right and left to blame the US first for all the undesirable things that happen in the wo…
Deciphering the Investment Climate Deciphering the Investment Climate Reviewed by Marc Chandler on January 26, 2014 Rating: 5
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