Macro Dragon WK #26: The Week After the Hawkish Fed Pivot... Macro Dragon WK #26: The Week After the Hawkish Fed Pivot... Macro Dragon WK #26: The Week After the Hawkish Fed Pivot...

Macro Dragon WK #26: The Week After the Hawkish Fed Pivot...

Macro 8 minutes to read
Strats-Kay-88x88
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Cross-Asset Quasi-Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.


(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 WK #26:The Week After the Fed Hawkish Pivot... 


Top of Mind…

  • TGIM & welcome to WK #26
  • Despite the title, we’ll cover the thoughts & potential pathway from last wk’s FOMC meeting on a different thread later this Monday Asia – so look out for a Macro Reflections piece… It was just getting too long for a wk ahead piece
  • Suffice to say, risk-off is the name of the game equity wise in the Mon Asia Midday Session… a slight pop in AUD 0.7489 +0.13% & NZD 0.6955 +0.27% post the beatdown they got last wk at -3.0% to 0.7479 & -2.7% to 0.6936, respectively.
  • Gold 1774 +0.57% trying to bail water out of the flooded ship, post last wk’s -6.0% to 1764…


261

  • …& ditto on copper than finished last wk at -8.4% to 415.

262

  • And as always Oil completely not giving a fudge & ticking up +0.50 to +1.0% after finishing up last wk. Clearly oil – for now at least – could not spell hawkish Fed if you held its hands. Still think Oil could easily do -5% to -15% & still be in a bullish Ascension. It has been pretty much relentless since Nov of last year – was interesting to see energy names like etf XLE $52.39 pullback by -5.4% last wk.


263

  • The theme this wk is going to be digestion of the Fed & its implications, as well as have some flash PMIs, BoE, FOMCs speakers & Powell set to speak on Tues (Wed 0200 AM SGT).
  • Eight key question for cross assets & markets to consider:
    1. Have the moves from last wk completely repriced us for a Hawkish Fed from a cross-asset perspective?
    2. Have the moves from last wk overshoot from a cross-asset & themed perspective?
    3. Have the moves from last wk undershoot, either from a few lagging securities like say BRL or TWD and/or we are just getting started in regards to USD bulls positioning?
    4. Is the reflation theme dead, or is this a beautiful place to add onto some of the cyclicals likes financials?
    5. Will the Fed have to potentially do another 180 degree turn closer to Jackson hole, as it seems that the Biden|Harris Administration may not be able to do as much fiscal as we envisaged from just 4-8wks ago?
    6. A lot of key technical weekly closes from last wk, so regardless of one’s thoughts on fundamentals are these about to be new emerging trends or false break-outs, or a mix of both depending on asset class & underlying play within that asset class?
    7. Why were things like financials selling off, if we are hiking rates – shouldn’t banks do well in that environment?
    8. Is there a chance that the Fed is pivoting towards being hawkish right when we are seeing maximum growth in the US & potentially peak inflation given base effects fall off & almost half of the components from US CPI rises from the last two readings had to do with temporary factors of second hand car prices?

Rest of the Week & Other Reflections

-

Start<>End = Gratitude + Integrity + Vision + Tenacity | Process > Outcome | Sizing > Position.

This is The Way

Namaste,
KVP

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • 350x200 peter

    Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • 350x200 althea

    Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • 350x200 peter

    Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • 350x200 charu (1)

    FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • 350x200 ole

    Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Disclaimer

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 (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

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.