APAC Global Macro Morning Brief – Happy Macro Fri 8 Nov 2019: All That I Desire Is Within Me
Summary: Morning APAC Global Macro & Cross-Asset Snapshot
(Note that these are solely the views & opinions of KVP, they do not constitute any trade or investment recommendations of any kind.)
To see this wk’s Macro Monday click here
APAC Global Macro Morning Brief
Happy Macro Fri 8 Nov 2019: All That I Desire Is Within Me
Awesome event o/n in Singapore, as we hosted our Annual Fintech Conference: Fintech Unfiltered – Opportunities & Pitfalls in the digital 4.0 world
It seemed that each speaker was better than the last, panel was also fantastic (panels are normally the duds at conferences – because the lvl of the moderator => quality of the panel dialogue) as we had the sensational International Moderator Chloe Chow from Brilliant Media & Productions
KVP’s personal favourites were Anu Sahai from McKinsey & Co on “Finding Digital Alpha”, as well as Harvard Innovation Lab’s brilliant Chris Colbert on “Inside Innovation”
A real pleasure & honour to host the event – special thanks to all my colleagues who helped make it a successful, smooth & fun event, with a special shout out to our marketing & events dream teams. KVP did not make the drinks at Smoke & Mirrors, yet always open for any war stories that went down
So latest on trade noise is, it does not seem like noise – Trump seems to be blinking, looks like there is going to be easing on tariffs from both sides & we are closer to a “Phase One” deal. The risk-on sentiment is being loves by the bulls, as can be seen by much higher lvl of yields & lower lvls of precious metals…
We have broken out of recent trading ranges on UST yields (+1.50% to +1.80%), getting up as high as +1.97% before reversing to close at +1.9173 – this is a big deal folks. With 2.00% being key lvl to get over, next topside resistance would be c. 2.12% then 2.20%... and yes we can still squeeze all the way back to 2.50%... yet KVP stands with the meta trend for global yields being lower – i.e. there is just too much debt in the system. Yes we can bounce economically for 6-9-12m… yet the gravitational pull of the debt in the system, gets stronger & stronger with every passing day
Gold & Silver were down -1.48% & -3.00% at 1,468 & 17.1080, again breaking below recent trading range support levels
Silver is looking especially interesting here in the Friday Asia morning at 16.9630 -0.82%, below the 100day moving average at 17.0969, next big level to watch out for is the 200DMA at 16.1139, which is a -5% move from here. The real line in the sand here is the 14.80 lvl from mid Jun, which was the lvl before the massive bullish breakout
Sticking with metals, yet on the other side of the risk-off/risk-on coin, Copper flew by +2.35% to close at 272.75… these again are big lvls not seen for months – kudos by the way for AVM flagging the long short play from just 2 wks back
FX wise, its been risk on as we see DollarYen break up through 109, closing at 109.28 +0.28%, John Hardy touches further on currencies with Market celebrates US-China trade headlines
More green shoots from global manufacturing PMI figures and South Korea are covered by Peter Garnry
Next week is going to start off short, as its long weekend in the US with Monday being Veterans day. Data wise inflation will be key in the US & EZ, as well as monthly growth numbers out of CH. Jobs numbers always big movers in Aus
Central bank wise, there will be decisions out of New Zealand, Philippines & Mexico. Currently markets are expecting 25bp rate cuts from NZ to 0.75% (1.00%) and MX to 7.50% (7.75%)
We are seeing more signals & chatter on green shoots - again something that KVP thinks is more of a tactical bounce rather than any long-term structural delta, yet always respect the price action – see Dembik on the most important chart this month, China’s credit impulse
And no doubt there will be further focus on the US / CH show
- JP: Avg. Cash Earnings, Household Spending, Leading Indicators
- AU: RBA Monetary Policy Statement
- EZ: GER Trade Balance, ECOFIN Meetings,
- US: UoM, Final Wholesale Inventories
- FOMC’s Williams @ 21:00 SGT (08:00 ET), Brainard @ 21:30 SGT (08:30 ET)
- CA: Housing Starts, Employment Change 14.7ke 53.7kp, Building Permits
- CH: Tentative for Sat is we get CPI 3.2%e 3.0%p & PPI -1.5%a -1.2%e
- AU: NAB Business Confidence, Wage Price Index, MI Inflation Expectations, Jobs Data
- NZ: Visitor Arrivals, Inflation Expectations Q/Q, RBNZ 0.75%e 1.00%p, Biz Mfg. 48.4p
- CH: New Loans, M2 Money Supply, FAI, IP, RS, Unemployment Rate
- EZ: GER ZEW, CPI 1.1% e/p, GDP YoY 1.1% e/p
- UK: 3Q GDP 1.1%e 1.3%p, IP, Mfg. Production, CPI 1.7% e/p, CORE 1.8%e 1.7%p, PPI
- US: Long wkd in the US with Mon being Veteran’s Day, US CPI 1.7% e/p CORE 2.4% e/p, CORE PPI, Natural Gas, Crude Oil Inventories, RS, Empire State Mfg. Index, Import Prices, Capacity Utilization Rate, IP, Business Inventories
- Powell due to testify on the economy on Thu, Nov 14
- CA: Light data wk
- To catch this wk’s Macro Monday Click here… & replay of the call here
- Don’t forget to bookmark & check our Daily SaxoStrats calls from the European morning session c. 09:00 CET
- Dembik’s latest Macro View presentation: Slowdown or Meltdown? KVP loves Dembik slides, always nice, simple & clean… also note him flagging the most important chart this month showing China Credit impulse turning into positive territory
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.