Macro: Stress Indicators - Sign of ?

It's been a while since I ran the Stress Indicator batch, which was borne under the financial crisis. It's remarkable and true reflection on how perverted our monetary system has become, but look for yourself here is few interesting chart from the selection:

 

US Real Rates: Let's talk about hike in US rates – It's alrady happened (Please don't tell the stock market) Result: 65 bps higher than beginning of the year.

 

Europe vs. US.

 

I was pretty much alone in calling for near German recession this time last year, and now I am it seems again on the other side: I think Europe will surprise to upside in 2015, mainly in H2-2015, and I think US will disappoint…again its already happening (Please don't tell EURUSD & Stock market). I have seen "considerable" improvement in Club Med + Eastern Europe's competititveness on my travels in November. Germany and France will big losers, Rest of Europe will pull ahead next year as Germany finally lose its net gain from introducing the EURO.

 

 

Japan CDS – maybe the most important chart this morning: How ANYONE can believe that exporting a countries problem through its currency to other countries will solve anything is a mystery to me! Japan is diplomatically put "borrowing" growth from a world growth which is tanking. No one can afford someone else's growth that was 2014 challenge, 2015 will be final chapter in currency manipulation and it will end in years like in 1997/98:

 

 

Biggest USDJPY moves:

 

 

Gasoline prices collapsing. We know this is key ingredients of consumer surveys: I.e: explains why SURVEY data better than real data in the US:

 

 

Europe will see low in Q1/Q2 – this has been reliable indicator:

 

This week sees nine central banks calling for lower yields – deflation now the new issue for all involved. Ironic as less than 2Q ago everyone was in denial. The end of macro policy is fortunately close……

 

Safe travels,

 

Steen

 

 

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Steen Jakobsen  |  Chief Investment Officer

 

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