The Good, the Bad and the Ugly Macro Thoughts’ end of half-year review and expectations for the rest of 2018
Over the 12 months, US data has been skewed because of Amazon’s sales in 2017 (the Good), East Coast storms (the Bad) and Tax cuts, which will need paying for (the Ugly).....
High oil prices, the strengthening of the US Dollar and trade tariffs will accelerate the global slowdown and threaten recession, though the Fed appears to be oblivious of the risks.
A flattening curve from higher short-end rates is one thing, but if the long end starts to capitulate, that’s a different, more alarming matter.
Since the end of Q3 2017, Macro Thoughts has warned of slowing economies in Asia, expecting the deceleration to spread to Europe in the first quarter of 2018, against a background of higher US yields and rising oil prices, (which has seen the largest quarterly price rise in 25 years) and, even more ominously, a slowdown in China.
The IMF upgrading global growth in May confirmed my fears for Emerging Markets and developed economies. While China and others were downgraded, Indian growth was upgraded to compensate, yet I believe that, despite a strong Q1, the Indian economy will stall (the Rupee is the worst performing Asian currency), reflecting an Asian slowdown, caused by higher oil prices and currency outflows. Because markets were not prepared at the end of 2017, equity markets have had their worst first half of a year since 2010, and Emerging Markets have had their worst start to a year on record.
As a result, markets need to rethink strategies, as medium-term, multi-year trends have ended, and new long-term trends, that Macro Thoughts has previously emphasised, look to have started.
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Macro Thoughts is independently researched and draws on extensive macroeconomic and market experience gained in Fixed Income, Futures, Derivatives, Bond, Forex, Commodity and Equity Index markets and from strong Global Macro investment, risk taking and strategy backgrounds. Far-reaching product knowledge across asset classes enables us to consider hedging and investment strategies that reflect our expected market trends. Macro Thoughts is directed by Keith Grindlay, whose experience spans, somewhat uniquely, both the buy and sell side, having managed trading and investment desks at top tier institutions, ensuring all strategies are evaluated for risk/reward and the optimal instrument(s) for best leveraging the strategy suggested are employed.
Globally recognised for strong analytical skills, aligned with a particular aptitude for anticipating global economic events ahead of the majority of commentators, Macro Thoughts’ independent fundamental economic research and analysis and resultant strategies have a track record that assures exceptional results, with a service that surpasses the model of bank-supplied, partisan research and stands out from the general contributions on platforms that your clients and peers already have access to. The support and value offered by Macro Thoughts, delivering written research and analysis, presentations and consulting services, is backed by decades of macroeconomic and market experience and can be tailored to your specific requirements.
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www.macrothoughts.co.uk
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