All posts by globalmacroresearch

News

ECB expands the monetary base with negative rate and LTRO

On 5th, the ECB (European Central Bank) had a council meeting and set the deposit facility interest rate to be negative. After the announcement, EUR/USD fell to 1.356, and as the press conference started, the rate became 1.3503, but the euro was bought afterwards and now it’s traded at around 1.366, which is higher than the rate before the meeting.

The most significant decision in the meeting is the €400 billion TLTRO (Targeted Long-term Refinancing Operation), which will expand the monetary base by about 34%. Continue reading ECB expands the monetary base with negative rate and LTRO →

European bond market, European stock market, Foreign exchange market, Market outlook

Reviewing the euro, the German government bond and property companies

The ECB (European Central Bank) is expected to have a Governing Council meeting at 1:45pm CET, which has been keenly watched by investors since Mario Draghi, the governor of the ECB, mentioned the possibility of financial easing in this meeting. Continue reading Reviewing the euro, the German government bond and property companies →

Uncategorised

Will EU fall apart?: The affairs after the EU election

After the EU election, Spain and Portugal are moving for a stimulus or a tax cut, exhausted by the fiscal austerity and the low inflation imposed by the EU. Reuters reported.

Spain is the fastest to move, expected to approve a stimulus plan of 6.3 billion euros and a corporate tax cut from 30% to 25%. The investors who shifted their money to Southern Europe might be rewarded. Including the results of the election, we summarise the political affairs of the European countries after the election. Continue reading Will EU fall apart?: The affairs after the EU election →

Japanese stocks, Stocks

How to short squeeze Goldman: How Wacom (TYO:6727) will overcome the short selling

Wacom (TYO:6727), the Japanese exporter of graphics tablets introduced before, is now having the short selling of institutional investors. As of 30 May, Goldman Sachs has a short position corresponding to 4.04% of all the issued stocks, and Deutsche Bank has that of 1.31%, the total of which is 5.35%. Interestingly, after their short selling, Credit Suisse cut its price target from ¥800 to ¥460, with the stock price falling by 4.6% on the day, giving the rational investors a good opportunity to buy more. Continue reading How to short squeeze Goldman: How Wacom (TYO:6727) will overcome the short selling →

Market outlook

The EU election results will lead the euro zone to a genuine growth

In the EU elections from 22nd to 25th, the anti-EU parties, like Front National in France, enjoyed their victory as the European citizens couldn’t stand with the fiscal austerity that had been imposed to them. Recognising the results, the German prime minister Angela Merkel mentioned the necessity of accepting the needs for more dovish fiscal policies. This is the first step of the true economic growth of the euro zone, which the market has been longing for. Continue reading The EU election results will lead the euro zone to a genuine growth →

Chinese stocks, French stocks, Japanese stocks, Stocks

Followup: Gecina, CNNC International, Heiwa Real Estate

The following is the reviews of the stocks introduced before:

It has gone up averagely, although it’s still traded at an affordable price. If you bet on the ECB’s financial easing, this will be a better option than selling the euro. We need to note that if the ECB isn’t to start the QE next month, a good opportunity to buy this stock will come again between the next meeting of the ECB and the QE. Continue reading Followup: Gecina, CNNC International, Heiwa Real Estate →

News

OECD says Germany is now the second most popular among immigrants

According to OECD, the immigration flow to Germany reached 400,000 in 2012, making Germany the second most popular destination for immigrants, following the US. Germany was the eighth popular in 2009.  Urged by the euro zone crisis, the 300,000 immigrants were from other EU countries, since many jobless people sought a job in Germany, the economy of which had been recovering the most successfully in the euro zone.

The unemployment rate Italy remains 12%, and that of Spain remains 25%. The flow of the jobless people is supposed to oppress the German labour market, lowering the PPI.

As has often been pointed out, the fatal flaw of the euro is that any of the countries isn’t allowed to adopt the monetary policy that suits the economic situation of the country. Since Germany hates inflation, the ECB can’t do what they must do. In the meeting next month, some financial easing is expected, although a mere interest rate cut could hardly stop the structural disinflation.

Japanese stocks, Stocks

[Stock] Wacom (TYO:6727): A Japanese exporter depreciated to the level before Abenomics

Wacom Co., Ltd (TYO:6727)

Google Finance – Wacom Co., Ltd: TYO:6727 quotes & news

In the Japanese stock market, Japanese exporters have been depreciated due to the strengthened yen, but some of them are dumped too much. Especially Wacom, the graphics tablet maker that holds the 80% of the market share in their market, has been dumped to the price at which the stock was traded before Abenomics. Since then, however, the yen has been depreciated by 20%, and the company’s revenue has grown by 30%. This article explains why it’s a great buying opportunity, by mentioning the brilliant growth of the market of tablet computers, which affects the company’s revenue very much. Continue reading [Stock] Wacom (TYO:6727): A Japanese exporter depreciated to the level before Abenomics →

Foreign exchange market, Market outlook

How much can the euro fall down if ECB starts the QE?

After Mario Draghi, the governor of European Central Bank (ECB), mentioned the possibility of financial easing started in the next meeting of the central bank, the speculation occurred also in the currency market following the European real estate stocks that had been already boosted for months. (See the article on Gecina.) EUR/USD is now traded at 1.37, falling down by more than 1%.

The news currently mostly tells about the negative interest rate, not the quantitative easing, but if the other methods couldn’t hinder the inflation rate from diminishing, the ECB would have no option but the QE. Therefore, in this article we estimate the due rate of EUR/USD after the QE. Continue reading How much can the euro fall down if ECB starts the QE? →