(By Macro Man) Having returned from various sunny climes TMM are still trying to overcome a state of chilledness that is positively glacial. We have slowed to an imperceptible crawl of decision making where deciding between a tea or a coffee has taken most of the morning.
What a week to miss. Keen non-glacial firebrands would say we missed a scorcher, but TMM are very happy not to have been here and to instead only now return to what has rapidly become a very quiet market where the US vacations today have stalled things to a crawl. Interesting that the US is celebrating independence from a far off government that imposed unfair and undemocratic laws and impositions. Ooooh, where do we start with that idea and Europe at the moment?
As for Europe, it would appear that last week's Euro summit was the equivalent to the Eurocrats chucking a smoke grenade at the market and legging it. TMM wonder if this is a rerun of 2010, with an implementation of the tried and trusted STFU policy which managed to deflect attention away from Europe and back on to the US. It does appear that we have returned to a "no news is good news" mode and there really is very little to add to the basic macro arguments that have been the debate ad nauseam over the last two months. In the meantime we don't think the market is anywhere near cleared out in its anti Euro trades and, despite falling implied volatilities, is still very skewed.
US - Data data everywhere and not a thing to think. Sorry we are not yet in the zone and dissociating local issues from Euro induced global malaise is for later.
PMIs - Well fancy that. The figures come out just where they are suddenly expected to be 10 minutes before their release.
Vols - Cor they are low. What's all that about then? Massive squeeze in the "blow up" vol longs? Desperation in fund land for some premium? a REAL thought that things are steadying? Doubt the last one as the chatter is still "well if it hasn't happened yet, it will soon".
Equities - New recent highs. QE3 some say and looking at discretionary spending component vs main index there is indeed a lag and the gold outperformance is also pointing to a QE3 bias, but we maintain our general favour of equities over bonds and commodities
IT depts. - Returns to work always appear to involve to lousing the boxes under the desks that for some reason go on a password change frenzy combined with an obviously AI evolved ambition to be done with mankind in "The Matrix" fashion. This of course requires a few calls to the IT department. which has led TMM to suggest that IT depts are replaced with a large sign stating - "Log On - Log Off". IT depts. are challenging London Public Transport workers in TMMs league of piss take "got you by the goolies" jobs.
Barclays - TMM are looking forward to a Gladiatorial conflict today .. "My name is Maximus Possible Profitus, commander of the Armies of 5 North Colonnade, General of the LIBOR Legions, loyal servant to the true emperor, Marcus Agius. Father to a murdered business model, husband to a murdered derivatives desk. And I will have my vengence, in this life or the next"
Back tomorrow with a more detailed look at the energy and power sector.