Global Macro Strategist
Summary: Week ahead is light on econ data, flash PMI theme... yet heavy on GeoPolitics. We continue to have a lack of cease fire between Turkey and Syria, we have Canadian General elections today where JT was lagging in the polls and of course the Brexit saga continues. Central banks wise, the ECB is likely dead in the water for a few meetings, decision out of Turkey and Russia could be more interesting.
(Note that these are solely the views & opinions of KVP/sender of this email & do not constitute any trade or investment recommendations.)
2019-Oct-21
A replay of the call is available HERE
TGIM & Happy Macro Monday everyone, welcome to WK 43.
Econ data will be light this week, it will be flash PMIs theme – key thing is really geopolitics, from Canadian elections today, to Syria/US/Russia (still no cease fire) and of course is there a real Brexit in the making or will we once again see another extension.
On the US dollar, the DXY has now posted 3 consecutive weeks of pullbacks with last wk’s -1.04%, with a pivotal weekly close below the 98.00 handle. Last wk marked the biggest down move since Jun of this year. So does this potentially signal the turn in the US dollar strength?
That is potentially going to be decided on if we get the UK exiting the EZ – dollar negative, as UK & sterling assets likely to finally get a structural multi-quarter if not multi-year bid given the 3yrs years of underweight & uncertainty. However if we get another extension, we could see a reverse in sterling & euro strength, which will likely result in a stronger USD once again.
Wishing everyone a healthy, phenomenal, smooth, profitable & lucky close to October.
Namaste
-KVP
**
Summary of Prior Week:
COT Report: [@Ole_S_Hansen]
Week Ahead
Key Focus:
Central Banks (SGT):
FOMC Speakers (SGT):
Other (SGT):
Econ Data:
Chartography & Price Action
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
