Steen's Weekly Macro Chart: Theme? Stress, stress and more stress

Attached the Weekly chart – partly from Saxo Macro-mania, partly from best of Twitter likes this week…

 

Themes:

 

• UK – Our biggest NEGATIVE view – not only is credit impulse collapsing but REAL WAGES in UK below ITALY since 2008! This almost guarantee a run for PM Corbyn!!!!
• US – Inflation well below 200 pc now – (FED SF agrees this morning) setting up OVERWEIGHT in US Fixed Income @ or just after December hike – REMEMBER Powell speaks tomorrow
• Global Monetary base lowest -smallest – since 2006…….
• US – Credit falling out of bed – any the Mortgage market price home owners @ 500 bps almost..! Cycle end is near..
• The Illusion of Capitalism  - most markets in the world driven and operated as MONOPOLIES – the exact opposite of capitalism with market allocated freely priced goods – Wonder why we have no growth and no productivity – this chart shows you why!

 

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

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Macro Digest: The Brexit deal which keeps giving…

Macro Digest: The Brexit deal which keeps giving…

 

Full text of "Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community as endorsed by leaders at a special meeting of the European Council on 25 November 2018"

 

Our analysis:

This was the 'easy part' of the Brexit deal – agreeing with a desperate EU. The vote is unlikely to carry in the UK Parliament setting up additional nervousness and volatility - PM May looking to get vote in Parliament before Christmas.

We remain serious concerned about the UK economy – our Credit Impulse in UK has collapsed to unheard lows, which tells us UK economy could be recession driven by summer of 2019.

 

We deem the vote to be a loss for PM May as of now (with 70% probability)

Any rally in GBP should be sold (Critical support sits @ 1.2660), as the UK parliamentary system is working its way towards a non-solutions and as such risk a handover of control in Parliament despite the lack of alternative. The ultimate price could be a split of the Tory Party before 2019 is over.

EU officials was "crying" this morning as they after more than 20 month of negotiation gave their ok after less than an hour's discussion.

EU described it as a "orderly withdrawal". The EU immediately returned to their old ways of intimidating the opposition by having the EU Commission President JC Juncker say: "….anyone in Britain who the bloc might offer improved terms if MPs rejected the deal would be "disappointed"" (Source: BBC - https://www.bbc.com/news/uk-46334649)

Reuters carried the British opposition response which was not kind:

BRUSSELS (Reuters) - Britain's main opposition Labour Party will oppose the government's Brexit deal in parliament, its leader Jeremy Corbyn said on Sunday, describing the agreement approved in Brussels as "a miserable failure of negotiation".

"This is a bad deal for the country. It is the result of a miserable failure of negotiation that leaves us with the worst of all worlds. It gives us less say over our future, and puts jobs and living standards at risk," Corbyn said in a statement.

"That is why Labour will oppose this deal in parliament. We will work with others to block a no deal outcome, and ensure that Labour's alternative plan for a sensible deal to bring the country together is on the table."

The "easy part" for PM May was to make a deal with an EU desperate to close the talks, now the focus is on Parliament. Already this Sunday the deal has been met with a no thank you from Labor (see above) and the 10 Northern Ireland – The Democratic Unionist Party - mandates which secures May her majority in Parliament.

British media also insists that up to 90 lawmakers of her own party have said they will vote against the deal. PM May hopes to have a vote before Christmas.

Links

https://www.theguardian.com/politics/eu-referendum+tone/comment

https://www.ft.com/brexit

https://www.economist.com/brexit

Safe Travels,

Steen Jakobsen

Chief Investment Officer, Saxo Bank

 

 

 

 

 

This email may contain confidential and/or privileged information. If you are not the intended recipient - or have received this email by mistake - please notify the sender immediately and destroy the email. Any unauthorised copying, disclosure and/or distribution of the contents and/or attachments in this email is strictly prohibited.

Email transmission security and error-free delivery cannot be guaranteed as information could be intercepted, corrupted, destroyed, delayed, incomplete and/or contain malware (virus). The sender of this email, therefore, does not accept liability for any errors and/or omissions in the contents of this message, which may arise as a result of email transmission.