Here is an extract from today’s Global Macro 360 Daily Note. To read the full content click here to sign up for a One Week Free Trial.



  • Turkey: Who says Twitter matters? 
  • Eurozone: ECB plays a dangerous game flirting with deflation
  • United States: The Yanks are always seeing the best in things, confidence up
  • Australia: Aussies keep borrowing with fingers crossed on housing market
  • United Kingdom: The Brits are spending other people’s money, again 

Good morning.

Are we back to the 1990s again, Liverpool on the top of the premiership, the US recovery picking up, the UK current account widening and Kylie touring again?

The 1990s was also an era of distressed Brady Bonds (a form of which we will see again), while the mainstream developed markets were doing well and there were periodic but violent emerging market upheavals, notably the Asian and Russian crises.

But here is where the similarities end because the 1990s was also an era of capitalism and globalization with government after government adopting diffuse free-market policies in the wake of the end of communism. Today all across the world from Turkey to Russia, Brazil, Argentina and China, there is an alternative of strong central government, protectionism and a rejection of the notion that US  owns the only playlist on the global economic iPod.

This cleavage between the US and the rest will become the defining issue of the next two years.

US equities had a soft rally at the end of last week, while the NASDAQ continues to underperform. We’re almost to the end of Q1 with the S&P 500 and NASDAQ  unchanged for the year. To some extent, given the poorish data, a more hawkish FED and neurosis over China’s weakness, this result isn’t bad – Moyes would’ve taken it!

Our 5 year note is making a new high in terms of yield this morning at 1.77%. The market, and I mean the institutional lads, sold the 10s and 5s late last week in order to position themselves for key economic data this week (see below).

Before I talk about the US, what about the US’s main ally in the Black Sea region? Turkey has become much more significant geo-politically since the Crimea crisis. It is the only military power in the region that the Russians respect and it is likely to involve itself in a proxy war with Russia over Syria. This will annoy Moscow and encourage Washington and in so doing will ensure the longevity of Erdogen, to the detriment of the Turkish economy.

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