Article / 17 May 2016 at 10:46 GMT

Daily Shot: Good numbers for Eurozone periphery

TradingFloor.com Team / Saxo Bank
Denmark
  • Ireland's financial future is looking brighter
  • In the Eurozone Greek 10y government debt yield is below 7.5% - amazing
  • Brexit odds in the betting markets tell a different story than polls 
  • In Brazil's business confidence is stabilizing while Dilma exits
  • The South African rand (ZAR) fell after the finance minister arrest story
By Walter Kurtz*

Let's start with having a look at the Eurozone.

1. Moody’s upgraded Ireland’s sovereign debt, projecting a better-than-expected economic outlook for the nation. Bond yields fell in response.

2. The ECB's monetary transmission, while having taken a while to materialize, seems to be working now as debt cost for the "real economy" is falling.
ECB
3. Greek 10y government debt yield is back below 7.5%. Amazing. 
Greece
4. As LIBOR in the Eurozone fell below zero, some of the higher quality borrowers potentially end up with a negative interest rate. Should the lender pay the borrower in this environment? 
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1. Elsewhere in Europe, the chart below shows the labor force participation rate by country.
labor force participation rate
2. Britain's EU Referendum polls show dead heat between the "yes" and the "no" vote. 
However, the latest Brexit odds in the betting markets tell a different story. 
Bets
3. Poland is struggling with tightening credit conditions. Moreover, foreigners have been dumping Polish government bonds. Poland avoided a Moody's rating downgrade (for now) but the rating agency cut the nation's credit outlook. 
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1. Next, we shift to China where the PBoC liquidity injections continue to rise. This trend could be thought of as a "sterilized QE." 
China
2. Are China's corporates having some trouble selling bonds? 
Chinese bonds
1. In other emerging markets, India's wholesale deflation finally ended. 
India
2. Is Brazil's business confidence stabilizing with Dilma's exit?  
Brazil
3. Russia's GDP growth surprised to the upside. While the economy shrank on a year-over-year basis, the decline was smaller than expected. The central bank is on hold for now. 
Russia

4. Nigeria's CPI rate continues to rise, primarily as a result of a weaker currency.
Nigeria
6. The South African rand (ZAR) got pummeled again on Monday in response to the finance minister arrest story. The situation remains fluid. 
ZAR
Turning to Food for Thought, we have 4 items this morning:

1. Putting the size of social networks in perspective. 
 
Social Networks
2. Were US living standards better decades ago?
US living standards
3. According to the OECD, globally there has been an "increase in the number of children with unmarried parents living together".
kids without being married
4. The population of Rome over the past 2500 years. 
Rome
 — Edited by Clemens Bomsdorf

* Walter Kurtz is an alias

**This is an abridged version of the Daily Shot. To subscribe to the full version, link to the Daily Shot and select the appropriate command. E-mail addresses are never shared with anyone.

 
 
 

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