(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)
Macro Dragon: US = Tues, Flash PMIs, Inflation & Turkey Rate Cuts Week
Top of Mind…
- 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
- US: Out on
Trump President’s Day
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