Details Cookies
Important margin product information

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.

Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Macro Dragon: Low Touch... Macro Dragon: Low Touch... Macro Dragon: Low Touch...

Macro Dragon: Low Touch...

Macro 2 minutes to read

Summary:  Macro Dragon = Daily Cross-Asset Global Views

In today's tight Macro Dragon, we tune into the latest on the risk-off that we saw over Tuesday in regards to the SARs like coronavirus. We had some big moves including close to -3% on HK Equity index & a +0.61% move in USDCNH to 6.91. We also check in on a few other things that are bubbling in the Macro Dragon's kitchen including: USDJPY & whether or not upside is still intact post the c. -0.30% move o/n, the latest from the active TAAL volcano in the Philippines (our USDPHP long continues to grind higher for the wrong reasons - yet we take what we can!) as well as today's Bank of Canada rate decision. KVP reckons its a risk-on day, so long as there is no larger fall-out from the coronavirus.

(These are solely the views & opinions of KVP & do not constitute any trade or investment recommendations. Things may have changed by the time you read this.)



Macro Dragon: Low Touch...


Low Touch…

We touched on the SARS like coronavirus in yesterday’s Macro Dragon – to be frank KVP completely underestimated how quickly & to the extent of the bearishness that we got – he was focused on putting together some other works. Which just goes to show the power & importance of where your focus goes.

Whilst the news on the uptick in infected was out early Asia Tues morning , things did not really kick-off risk-off wise, until HK futures open at 09:15 (auction starts at 09:00) & the cash market at 09:30. Which is likely going to be the barometer for whether things are going to be improving or getting worse – there are some clear mean-reversion trades once the coronavirus is nipped in the bud. Timing wise… we may not know that for sure until backend of Chinese New Year – which kicks off next wk – so could be Mid to late Feb, yet price action likely to occur sooner.  

DollarYuan had a massive move +0.61% to 6.9089, which makes you wonder how much it moves on the day the phase one deal gets broken!

USDJPY was about half that with -0.28% as the yen strengthened on risk off. Gold was initially up c. +0.40%, then ended the session dwn -0.17%, which was much better than silvers -1.60%. HSI closed down -2.81% for the day at 27,895.

KVP thinks that unless we get much worse developments around the coronavirus, its going to be a risk-on day for equities, yields up, gold & silver further down, DollarYen up, etc… 

Much worse developments would be a string of a lot more people being found infected in China, yet the real volatility could be if say a group of tourists who somehow got exposed to the virus go back to say New York, LA, San Fran, London, Tokyo, etc. Since yest, we seem to have cases of an individual in Australia & in the US that show the symptoms (again likely to be a few false positives)

Also seems like the authorities have embarked on a semi-quarantine of the City of Wuhan (11m). There is also a WHO (World Health Organization) meeting later today that will likely lead to them releasing a statement. All official numbers of those infected are still in the low 100s & so far there have only been 6 fatalities, with +25 people being cured.  


The situation with the active Taal Volcano in the Philippines seems to be deescalating & focused more on the displaced c. 250,000 who still cannot go back to what’s left of “home” – dead animals, vegetation & volcanic dust over everything. The alert lvl is still on 4, yet visible above ground signs look a lot less threatening despite the physics that is taking place underground. Meanwhile USDPHP continues to grind up as the peso weakens, giving us a classic example of a profitable trade that is not working because of the original thesis but other forces.   


DollarYen after getting sub 110 in the risk-off move o/n is now back above in the Asia morning – a 2nd consecutive week above the 110, would potentially solidify the move for a breakout higher to 112 & then potential 114-115 lvl. A close sub 110, would infer that the bullish technicals Macro Dragon was flagging could be in question.



The BoC later today…

  • KVP continues to believe that Poloz & the BoC will be on the sidelines for a while. The market is implying c. +1.1% probability of a hike.

  • And yes, still feels like we should have a much stronger CAD to the USD & other currencies, remember BoC is sitting at 1.75% (that’s like being 7 foot 2, in a world of 2 feet 7 folks).

  • Link to last Dec 4 BoC statement & Poloz fireside chat on Thu 9 Jan 2020.  



Have a great wk everyone, good luck out there & don’t forget to keep your mind open to opportunities. 

For those travelling over Chinese New Year’s; Godspeed, smooth travels, stay healthy & have a well-deserved break with loved ones. The year of the metal rat is going to be phenomenal!

On The Radar Today:(Times would be SGT)

  • AU: CB Leading Index
  • NZ: Visitor Arrivals (Early Doors Asia Thu)
  • UK: Public Sector Borrowing, CBI Industrial Order Expectations    
  • US: House Prices, Existing Home Sales
  • CA: CPI 2.3%e 2.2%p, CORE 2.2%e/p, New House Prices, BoC 1.75% e/p rate decision


Some Anchor Pieces from #SaxoStrats:


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.