Tuesday, June 5, 2012

Macro data deteriorate in sync

Brilliant analysis by Tertius Capital (see graph here above) about the recent evolution of the macro environment in Europe, Asia and the US. Fundamental data released last week  shifted market sentiment lower across the board :
- the US no longer claims “de-coupling” particularly after the sharply disappointing employment data last Friday and has rolled over from all too optimistic consensus forecasts on domestic growth.
- China is thought to be on a declining growth-path while energetic policy stimulus seems more and more necessary in order to avoid a hard-landing scenario.
- in Europe, investors have now started to fear a disorderly Eurozone break-up, while still only pricing-in some more benign outcomes for Greece and Spain as the central case.

Investors need to stay alert as market sentiment lumps all macro risks into a single decision vector : governments/central banks interventions (see our previous post about this new "addiction").

Risk aversion should remain very high in the coming weeks. Stay frosty...