Global Macro APAC Morning Brief

Happy Tue! 

Tue 3 Sep 2019

O/N & Levels:

Not too much on, given US (& CA) was out given the labor day wkd – still US EQ futures are down c. -70bp since Fri levels in early Asia Tue open. DXY is breaking out higher given its multi-year high close on Fri & the US trade weighted dollar index is at all time highs

A strong US is chocking global growth & causing particular issues for EM, the Fed, Trump & Commodities in general - the whispers on Saxo 4Q Outlook say  that it will focus predominantly on the USD, so please stay tuned for that 

EZ mfg. PMIs were in-line to better as a whole & more importantly China Caixin mfg. index has a massive beat 50.4a 49.8e - too early to call the turning of the ship, yet 2-3 months of this could signal a bounce in the making… Worth noting that we have had a number of head fakes in China this year

Sterling at two wk lows given Bojo moves & Parliament counter moves… he’s potentially threatening calling a general election… ignore the noise for now… from KVP’s view… worst thing that can happen is another useless extension… best thing is some form of clarity on the future... be that in hard Brexit or no hard Brexit… it’s the uncertainty that kills economic growth, animal spirits & investor appetite

Today:

US back in & on that front final mfg. PMIsis & ISM mfg will be key with 50.0 & 51.2 expected respectfully across the two

AU retail sales, current account & of course RBA – mkt expecting no move from former given previous back to back cuts to 1%. Worth bearing in mind RBNZ surprise -50bp, as well as this will be first RBA meeting post USDCNH shooting through the 7.00 handle. A weaker yuan basically acts as a tax on Australia's exports into China 

Have an amazing Tue & epic wk ahead, profitable trading everyone 

For those that missed the Macro Monday Call from earlier this wk covering the action packed wk ahead, you can access it here & catch the replay link here....