Education of a Speculator: Stress Indicator - Are we close to a new banking crisis and refugee crisis?

mandag den 29. februar 2016

Stress Indicator - Are we close to a new banking crisis and refugee crisis?

Comment: Risk is on relative to mid February scare, but post G-20 we remain very alert to March risk as we have:

· RBA meeting tonight – Very important considering the focus on housing bubble locally….

· ECB meeting (March 10^th) where Draghi will have hard time not disappointing

· FOMC meeting – March 15-16 with press conference – to move or not to move (simple actually – this is Fed if in doubt.. they don't move!) - Stanley Fischer speaks March 7th

· SNB monetary policy Assesment meeting March 17^th (What happens to Swiss Monetary Policy as ECB goes deep into negative and SNB is maximum 25 bps away from -100 and lower boundries of negative?)

EU is going into the biggest month ever probably on refugees – There is plenty of talk about Europe days away from carnage: 'EU migration system "could break down in 10 days" & Refugee crisis disunity: A de facto solution takes shape in the Balkans

The EU calendar looks like this: LINK

In macro charts:

PLEASE use 2 min to fully comprehend what this chart is telling us!

Japan and Europe leading world of academic driven central banks into negative yield is failing at least if you ask the shareholders of the banks in those two regions (and add Switzerland to the equation as well!)…. The bank indices is close to straight down since both BOJ and ECB entered into what can only be described as the end of central bank planning…..This chart is your guideline for all of MARCH…. As all policy meetings, refugees and growth will be reflected in these two lines.. Japan is my key indicator……

Market still give FOMC/FED ZERO credibility on their forward guidance – Fed is still at 2-3 hikes market 1 offered in size….!

Market is confused – We started the year focused on China, then on Fed and oil, now market also needs to figure out if inflation risk and wage new trend (it's not for now!)….Here is Morgan Stanley's number of hikes expected for 2016 we are still conservatively below even ONE hike this year…..despite the "inflation" and "wage increases" and Hawkish Fed…..