weekly wrap - 14 december 2013
TRANSCRIPT
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ON TODAYS SHOW
AROUND THE GROUNDS OVERNIGHT, THIS WEEK WRAP OF THE WEEK IN MARKETSWHO WON, WHO LOST AND WHO LOOKED STUPID
WHAT GAME IS GLENN STEVENS PLAYING WITH THE AUSSIE DOLLAR
A TECHNICAL OUTLOOK FOR THE S&P 500, THE USD DOLLAR, THE NIKKEI, YEN AND THE AUSSIE AN
EXPECTATIONS RISING OF LOWER CHINESE GROWTH
GLOBAL CAPITAL FLOW UPDATE
A QUICK TOUR OF ASIAN DATA THIS WEEK
KEY EVENTS IN THE WEEK AHEAD
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AROUND THE GROUNDS - STOCKS
Stocks Weekly Change This Week Last Week
Dow -1.65% 15,755 16,020
S&P -1.66% 1,775 1,805
FTSE -1.71% 6,440 6,552
Nikkei 0.67% 15,403 15,300
Shanghai -1.83% 2,196 2,237ASX 200 -1.70% 5,098 5,186
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AROUND THE GROUNDSGLOBAL F
Global FX Weekly Change This Week Last Week
EURUSD 0.26% 1.3730 1.3694
USDJPY 0.32% 103.20 102.87
GBPUSD -0.29% 1.6294 1.6342
AUDUSD-1.46% 0.8962 0.9095
USD Index -0.12% 80.22 80.32
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AROUND THE GROUNDS - COMMODITIE
Commodities Weekly Change This Week Last Week
Gold 0.90% $ 1,236.00 $ 1,225.00
Nymex Crude -1.15% $ 96.54 $ 97.66
Copper 2.76% $ 3.35 $ 3.26
Bitcoin 4.35% $ 887.00 $ 850.00
10 year treasuries -0.35% 2.87% 2.88%
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THIS WEEKSANTA RALLY, SANTA RALLY, WHERE FOR ART THOU?
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WINNERS
The Australian economyRBA Governor slammed the Aussie and
growth bulls but what game is he playing
US Economysigns of self sustaining momentum growing
Japanese EconomyUSDJPY at 5 year high
UK EconomyBoE signals low rates till 2015
Global EconomyChina is going to print 8%ish this year
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LOSERS
StocksDectpaer 60:40 according to Donald Kohn
Bondshow will the Fed Taper and keep 10s below 3%
Aussie Dollar bullsouch
Eurozone Economy1.37/38 against the USD, EURJPY at 5 year high REALLY? #kiddingm
Kim Jong Unsuncle
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STUPID OR DANGEROUS
KIM JONG UNTHIS DUDE IS SCARY
UNHINGED
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WHAT IS GLENN STEVENSUP TO WITH THE AUSSIEDOLLARDANGER WILL ROBINSON
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RBA GOVERNOR ATTACKS THE AUD
To the extent that we get some more easing in financial conditions, at this point its pro
more preferable for that to be via a lower currency at the margin than lower interest rat
I thought [US]85 would be closer to the mark than [US]95 . ..but really, I dont think we
that precise,
I just think that if things over the medium term evolve as were presently assuming a
its reasonable to make these assumptions its going to be surprising if a nine at the fright number.
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AHH IF ONLY THE AUSSIE WOULD CRAS
MY view is Steveabout an Aussieand wants it as lbefore hand
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AUSSIE DOLLAR
UnpreceaggressGoverno
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ASX 200TARGET ACHIEVED
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AUSTRALIA SEE OUTFLOWS AS WEL
Helps explain recent pressure on the Aussie dollar
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A MESSAGE FOR GLENN
Be careful what you wish for
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TECHNICAL OUTLOOK
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USD INDEXStill struggling
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EUROPULLBACK TIME
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S&PIm still short
S&P sbreakdailie
Targe
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NIKKEI AND YEN
5 year high for USDJPY 103.91 satisfies 104 target.
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GOLDWedging for a break out?
Long a$1174
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OF COURSE IT WILL BUT TAKE A BREATH PEOPLEYOU CANT GROW AT 10% FOREVER
CHINA TO SLOW?
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WHERE ARE WE
CHINA HAS GROWN STRONGLY SINCE ENTERING THE WTO IN 2001
THE CENTRAL ECONOMIC WORK CONFERENCE CONCLUDED IN CHINA YESTERDAY
THIS IS WIDELY EXPECTED TO TO LEAD TO LOWER GROWTH TARGETS FOR 2014
MARKETS ARE A BIT CONCERNED ABOUT A SLOWING IN CHINESE GROWTH
BUT WITH THE US DOING OK THIS IS THE PERFECT TIME TO SLOW AND CHINESE SIZE HAS A N
CONSTRAINT
7% IS LIKELY BUT THIS IS STILL MASSIVE GROWTH
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LETS TALK ABOUT GROWTH OVER THE LONG TER
$100,000,000.00
$200,000,000.00
$300,000,000.00
$400,000,000.00
$500,000,000.00
$600,000,000.00
$700,000,000.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1 8 19 20
10% compound growth per annum
0.00
20,000,000,000.00
40,000,000,000.00
60,000,000,000.00
80,000,000,000.00
100,000,000,000.00
120,000,000,000.00
140,000,000,000.00
160,000,000,000.00
180,000,000,000.00
1 7 13 19 25 31 37 43 49 55 61 67
Growth at 10% per annum compounding
The left hand chart is 10% for 20 years and the right hand chart is over a lifetime. One is achieveable the other probably more difficult
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CHINESE GROWTH
Notice how Chinese growth is likehand chart on slide before
But that type of growth becomes l
achievable as an economy develo
And dont forget the nominal impa
Tln is a lot more than 10% on 1 Tln
Take a breath and do the math
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FROM THE ANZ
Although China will maintain prudent monetary policy next year, we believe that China
policy implementation should be more flexible and forward looking, especially amid th
accelerating interest rate liberalization process.
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GLOBAL CAPITAL FLOWSINTERESTING TRENDS
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THE IMPACT OF G3 PICKUP
Not hard to see the impact of QE +
growth on developed market equ
What impact will the taper have?
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ASIA CONTINUES TO SEE OUTFLOWS
Equity outflows of USD 1.2 bln in week ending December 11 Bond outflows USD 0.6 bln
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A QUICK TOUR AROUND ASIA
Chinese retail sales strong up 13.7% yoy
Chinese IP up 10% yoy
Chinese CPI just 3% yoy
Bank of Korea left rates at 2.5%
Kim Jong Un executed his unclethe 2ndmost powerful man in nthkorea!
Taiwanese exports disappointing with no growth yoy
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WEEK AHEADTO TAPER OR NOT
Its all about the FOMC this week, the Taper and what they say. The communication is morethan their act in almost every way
Tankan is out in Japan on Monday along with the HSBC Chinese PMI and the preliminary M
for the globeso no bludging Monday for traders.
Australia gets new motor vehicles, RBA minutes and a speech from Assistant Governor Deweek.
German ZEW and Ifo are the big ones for Europe while UK retail sales will also be of intere In the US jobless claims, home sales and Philly Fed are out on Friday with CPI earlier in the
these hardly matter due to FOMC.