Macro Dragon: US back in on Tues, Flash PMIs & Turkey Rate Cuts Week
Summary: Macro Dragon = Daily Cross Asset Views. Today we re-highlight the wk ahead; noting the US does not get back in until Tues. the wk will be dominated by a focus on flash PMIs globally, as well as a number of key inflation figures. Central bank wise, apart from Fed speakers - its really going to be all eyes on Turkey to see if they cut more than expected given Erdogan's obsession with lower rates despite elevated inflation. Geopolitical wise - lots of focus on the deflationary ripples from Covid-19, as well as what kind of stimulus (magnitude, time, where) is going to be coming from China. On the US side, Sat 22 Feb will see the Nevada Caucus.
Macro Dragon: US = Tues, Flash PMIs, Inflation & Turkey Rate Cuts Week
Top of Mind…
- To get the full menu of wk 8, check out our Friday piece, Global Markets: Lucky 8, As We Look Into Next WK
- In nutshell; we got the US out until Tues due to President’s Day, flash PMIs & inflation themes on the econ data side. And a few EM central banks, with Turkey potentially likely to surprise with bigger than expected cuts given Erdogan distaste to high interest rates, regardless of where inflation is. The continued focus on Covid-19 could see some fatigue, with markets more concerned on magnitude, timing & type of China fiscal stimulus. Whilst things are just heating up in the next leg of the US democratic election process, with the Nevada caucus up for grabs on Sat 22 Feb.
- The biggest near-term date on the US political time-line, is really Super Tuesday – the Mar 3 where we should finally see Bloomberg in full swing (albeit he may still show in Nevada 22 or South Carolina 29 – been running heavy on ad campaigns).
- What a lot of people have not yet realized, is this is going to be an exceptional Super Tues from previous years, because we also have California joining the schedule (it used to be on the backend of the itinerary). So up until Super Tues, the delegate representation will be c. 4%, yet on Super Tues itself, its well over 1/3.This will be the largest one-day nomination of the entire democratic primaries.
- Basically by end of first wk of Mar, we are likely to see the backs of Biden, Warren & Klobuchar… possibly even Buttigieg (have to see how he does out of his sweet base of IO & NH). At this point in time – early days – KVP thinks it likely eventually come down to Sanders vs. Bloomberg. With the Holy Grail being whichever of the two picks Buttigieg as VP, even though Klobuchar also could work.
On The Radar Today…
(All times are SGT)
- NZ visitor arrivals came in a 1% vs. -0.9% previously
- JP Flash GDP -1.0%e +0.4%p, Revised IP
- EZ: Monthly Buba report
- UK: Home prices
- US: Out on
For Tues key readings are likely to be RBA minutes, Ger ZEW survey, CA mfg. Sales & US Empire State mfg. readings.
It is going to be a phenomenal week, wishing everyone the very best possible.
Ps. Note the Macro Dragon will be on break from back-end of Feb to early Mar – given a long overdue & upcoming spectacular legacy family trip
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.