Monday Digest #91

Weekly summary of finance, economic and tech news. Vision from DreamTeam. With 💜

Low interest rates make European banks to resign 20,000 employees to save costs.

IMF: The Global debt has reached a record of $152 trillion, which is two and a half times more than the world economy.
Basically debt is concentrated in the developed countries, but also it is high in some developing countries, such as Brazil and China.
Two-thirds of the debt is in the private sector.

ECB. The report of September meeting.

Eurozone economy requires further monetary support, given the lack of signs of recovery in prices. In this regard, it is extremely important to keep that very considerable amount of monetary support, which is incorporated in the predictions.
There should be no doubt in the readiness of Governing Council to implement the program of buying up assets in accordance with previous decisions and, if necessary, take further actions to ensure price stability.

The president of the Federal Reserve Bank Richmond Jeffrey Lacker said that there is a need for a substantial increase in rate.
He argues that the Fed’s key rate should be approximately 1.5% higher than it is now, because proactive increase of the rate is crutial for stable inflation.


#macro #finance

The Saudi government has decided to reduce the salaries and awards of state employees last week, and the central bank ordered banks to restructure loans to those affected by such a decision of the authorities.
The shares of banks reacted with drop.
The key stock index of the kingdom Tadawul has responded too. It fell to lows of 2009.

Bank of England in 2017 will double the stress tests of major banks — Barclays, HSBC, Lloyds, Nationwide, Royal Bank of Scotland (RBS), Santander and Standard Chartered. This innovation will allow to assess the banks’ resistance to a wider range of possible threats.

Reuters: the Corporate segment of China is suffering from a debt of $ 18 trillion, which is equivalent to about 169% of China’s GDP.
Growing debt has led many companies to lower profitability and a reduction in long-term investments. Increasingly, debt is used to pay off other debts, rather than to finance growth.
International organizations call on China to stop the financing of weak companies, especially inefficient state-owned enterprises, which tend to crowd out the private sector.
Now it is needed to occur as many defaults as possible,this will allow to improve the distribution of loans and to stop useless spendings in the economy. However, banks are listening to the companies, giving them a grace period — three or four years, during which they have the right not to pay interest on loans.

Bloomberg: The pound fell by 6.1% over two minutes on Friday during Asian trading period, while at minimum it has reached $ 1.1841 — the lowest level since May, 1985.
Some traders blame for this fall human error, while others point out that the effect of algorithmic trading with low liquidity worked out.
One can see there are squeezes now in the markets, i.e. there is something dangerous with the positions of the major players.

#COMMODITIES

OPEC member countries, as well as oil-producing countries outside the cartel, are planning to hold another meeting in Istanbul from 8 to 13 October.

The Saudis have announced discounts for all the suppliers.
Reuters: this decision is likely to be associated with the closure of two refineries for repairs during the last two months. As a result, Saudi Arabia has an excess of oil on the domestic market, which it will have to export.

Bloomberg: OPEC Oil production in September rose to record levels.
This occurred against the background of growth of oil production in Libya, Iran and Nigeria.

API: Commercial US crude stocks for the week showed a decline of 7.6 million barrels. Reduction of oil reserves in the United States has been observed for five weeks in a row. However, we recall the active sales by the US Shale-oil producers, that already hedge current prices for the next year.

Oil production in Russia has increased to record levels in September since the USSR level of 11,11mln barrels per day.

Spread Gold / Platinum is an indicator which shows the attitude of investors to the risks.
Now gold is high on 1272.59; while platinum is at 991.14 (i.e. about 27% divergence).
If platinum, being more valuable metal in its structure and being an industrial metal at the same time, is not popular, but at the same time, gold is still demanded — this discrepancy indicates that the age of the global growth of the dollar is expected along with growth of rates, and the global risks growth.

The graph shows the bonded Gold futures in the US dollars (dark yellow), Platinum in US dollars (light gray). The blue color indicates the relation of the futures price of Gold to the futures price of Platinum. The red line shows the effective rate of the US Federal Reserve.
To download this chart in high quality click
here.


#INTERESTING

Twitter shares have fallen by 20% due to the refusal of Google and Disney to purchase the microblogging service.
According to experts, poor financial results and the lack of a clear monetization strategy are the main reasons for the attempts to sell the business.

Assets under the management of Singapore funds reached $ 1.9 trillion in 2015.
Bank of Singapore: the reason for the growth was an increase in the alternative investments sector, where the assets under the management showed an increase of 29%, while in the traditional sector it showed only 4% gain.
Everybody is eager to returns. The market gives the opportunity to make good money. DreamTeam Investments is inspired by similar successes.

Samsung buys voice assistant Viv, created by the developers of Siri.


#OPINION [dti in the media]

Chief Analyst of Dream Team investments Mikhail Dorofeev on air of the Radio “Salt” on the “Angle of view” program gave a comment on “Ups and downs: what should Russians expect from the exchange rates”:

Now it is not the best moment to sell the dollar. If you have a dollar, and the money you are not in urgent need, the best is to not touch them, do not panic. Usually, most are wrong at the end of a trend, when he is ready to turn around, that is, if it is very worried that the ruble will strengthen to 50 or lower and you want to pass all the dollars, bought more than 65, you probably need to stop for a second and think a little bit in the future, and the prospect is quite interesting.
The main trend remains upward USDRUD couples. The intermediate is also upward. The short-term downtrend is now long and separates us from the level of 60.81, so that we have moved to an intermediate state in the main trend.

The full version of the interview, which you can read or listen to is available here.


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