2. Japan's imports fell by the largest percentage since the Great Recession as domestic demand remains poor. As a result, Japan's trade surplus rose.
3. Japan's full-time employment growth has risen significantly this year as demand for labor remains strong.
4. Related to the above comment, Japan's labor force has been increasing despite the drop in working-age population, as more women enter the workforce.
As discussed before, Australia's
RBA has sharply revised down its inflation forecast. In fact, Australia's CPI growth projection is now below that of the US.
In the Eurozone
, the focus remains on Greece
, with the IMF
pointing out what Greek government debt trajectory will look like with and without the proposed debt restructuring. Similarly, the IMF sees debt servicing costs rising sharply without any "help". Is it time to convert Greek debt into a perpetual zero coupon bond?
1. In the UK, the focus remains on the EU referendum. Mentions of "Brexit
" in the media have overshadowed the volume running up to the Scotland referendum as well as the UK elections.
2. Similarly, Goldman Sachs' client survey puts Brexit ahead of other key concerns, including China's
outflows/devaluation. Will this change as the dollar rises further?
3. The betting markets, on the other hand, are increasingly discounting the Brexit risk.
Next, we review some trends in the equity
1. Which countries have the highest equity risk premium (relative to the government debt markets)? In addition to several other sectors, banks and energy firms keep risk premia elevated.
2. One measure of the lack of conviction in the equity markets is the difference between bullish and neutral equity investor sentiment.
3. Berenberg's target for Deutsche Bank
shares is 9 euros. Several other firms have similar targets, expecting DB to be forced to raise additional capital in the near future.
Finally, let's look at a couple of trends in alternatives.
1. Hedge funds are increasingly becoming concentrated as investors demand alpha
2. It's a bit surprising to see an increase in fund-of-funds allocations by institutional investors while other strategies decline.
Turning to Food for Thought, we have 5 items this morning:
1. Public transportation usage in the United States.
2. The smaller the population of US counties, the worse the recovery from the Great Recession.
3. Most shootings in the US take place in the poorest communities.
4. According to Pew Research, "41% of US adults say they get their news from Facebook". The use of Facebook, however, varies by political affiliation.
5. The world’s most polluted cities.
— 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.