CAC report on P-notes could trouble markets

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It is Monday morning once again and the markets have come up with a fair amount of news flow during the weekend. Global markets are fine. Crude has behaved itself.

Markets closed very firm on Friday but then there were some bits of news, which came in on over the weekend, which the markets may not like. There was a report on Capital Account Convertibility; parts of it looked like they were ill-conceived, particularly for the capital market.

That might worry the market a little bit, though there have been some damage control statements from the government already. But the P-notes statement on the CAC report is something that the market will have to deal with. So there is a lot to talk about, as markets go into this Monday morning trade.

It is actually good that the news on the P-notes came over the weekend because the kind of news, which has come in, had it come in the middle of a trading day or after a trading day, the markets might have got really nervous, because the P-note is a dreaded word. It is fine that people have had time to sleep over it for two days. The government has had a chance to react to it as well.

So the nerves will be a bit settled as markets go into this morning's trade. Fortunately, all of that news has been reserved for the weekend. Markets look okay, there is no problem barring that small glitch of that weekend report.

Asian and emerging markets:

Global markets are fine. Nikkei is up 1.5%, Taiwan is up 1.2%, Straits Times is getting closer to 1% up, Kospi and Hang Seng are up 0.5%. These are good and solid cues coming in from the Asian markets. Rest of the emerging markets look smart as well; at least most of them did. Brazil was up 3%, Chile and Mexico were up 0.5% and Russia slipped by about 0.5%.

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