Thursday, July 11, 2013

Morning Memo: Thursday, July 11, 2013

  • Bernanke's speech late yesterday triggered global stock market rally...asserting that rates will stay low for a long time (due to very slow pace of economic recovery)...eased fears of imminent 'tapering'....stocks rallied, bonds rallied, USD fell, Gold rallied.
  • Asia markets rallied, followed on heels of Bernnake's comments...China rallied strong, helped by Premier Li Keqiang comments that China needs to make sure econ growth doesn't fall below a lower limit (unspecified).  Suggests possible softening of policy responses???
  • BOJ says Japanese economy is recovering...first use of the 'r' word since pre-2011 earthquake/tsunami.
  • EM stocks rallied strong!
  • Malaysia kept rates unched.  Indonesia hiked rates.  Korea left rates unched.
  • Brazil hiked rates to 8.5% fr 8%.  (Seeing EM countries defending their currencies, trying to stem capital flight, and trying to fight inflation.  Defensive policy responses???  Effective short-term???  Damaging longer-term???  Hmmmm....)
  • European stocks higher on Bernanke's comments.
  • Portugal...political problems not over!  President calls for "national salvation" agreement..a deal betw ruling coalition and opposition party...He had been expected to endorse cabinet reshuffle proposed by PM Coelho in order to avoid snap elections.  His proposal has medium term goals and could lead to early elections in June '14.
  • Oil had hit new highs yesterday, and early today on yesterday's lower than expected US inventory data.  Also, reports that Nigeria and Libyan output had fallen short.  Oil came off highs when IEA said '14 supplies could grow.
  • PC shipments fall for fifth consecutive quarter...down 11% y/y in Q2.(Gartner report)
  • US Jobless Claims jump 16k to 360k. vs 349K exp.  Mitigating factor?  Could be summer related changes in employment in auto and education industries.
  • more later....
Please continue to visit Soos Global Market Musings for updates.

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