APAC Global Macro Morning Brief – Happy Macro Tue 22 Oct 2019: Sensational Sterling... APAC Global Macro Morning Brief – Happy Macro Tue 22 Oct 2019: Sensational Sterling... APAC Global Macro Morning Brief – Happy Macro Tue 22 Oct 2019: Sensational Sterling...

APAC Global Macro Morning Brief – Happy Macro Tue 22 Oct 2019: Sensational Sterling...

Macro 1 minute to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Morning APAC Global Macro & Cross-Asset Snapshot

All market updates, research and trade ideas from our strategists in Copenhagen, Paris, Singapore and Sydney can be found at home.saxo => Traders => Market Analysis.

(Note that these are solely the views & opinions of KVP/sender of this email & do not constitute any trade or investment recommendations.)

Latest Macro Monday For WK 43 - Does brexit deal = top of USD strength?

Happy Macro Tue 22 Oct 2019


APAC Global Macro Morning Brief – Sensational Sterling...

The sensational sterling ascent seems to know no bounds... with GBPUSD 1.2963 this Asia Tue Morning, after getting to 1.3013 o/n... just last month this puppy made a low of 1.1959

That’s a +8.4% unlevered... assuming +5x to 10x leverage which is conservative for FX... that’s +42% to 84% in a little over a month... +42% to +84% on a $10m exposure can buy a few drinks around the bar… on a $50m to $100m exposure…  one can buy a few bars & lounges... perhaps even a little boutique resort

Again take away here - whether you find it or not, there are always profitable opportunities out there. The likely direction of overall USD strength will be dictated by whether we get a deal & exit (likely USD bearish) or we an extension (likely USD bullish)

The price action on sterling crosses is obviously telling us the market believes the probability of a deal is high. The tactical skew (near-term) from these c. 1.29/1.30 lvls is likely 1.2500 / 1.2400 on an initial moves if we fail & upward of 1.3500 to 1.4000 on an extension to exit scenario

Our options desk point out that it should be noted that the day-to-day volatility on sterling fluctuates extensively, currently on cable is around the 130bp to 135bp, implying a range of c. 1.2795 / 1.3132 – which in KVP’s view is deceptive given what should be a binary move once we are clear on outcome  

The structural skew (longer-term) on the other hand is massively asymmetrical to sterling strength imho, check out the quarterly charts we used on this wks’ Macro Monday – from multi-decades perspective, sterling & its respective assets are still very much under owned 

Obviously the flipside of looking at 
sterling & sterling related assets on a longer time horizon is we still have credit impulse that is negative flagged by colleague Dembik, plus Jakobsen points out that the UK is almost certainly heading into a recession which has tended to see a weaker GBP



Cross-Asset wise o/n was a session that saw us getting back over 3,000 on the S&P 500 +0.69% to 3007, yields continued to rise with US 10s at c. 1.80%, which was also reflected in pullbacks in Gold 1491 -0.37%. Silver 17.56 +0.05% on the other hand was pretty much unchanged unlike the -0.77% in Brent 59.20

The Dollar o/n was predominantly mixed, with small gains on the likes of EUR, JPY & GBP, yet losing vs. the likes of the Kiwi 0.6408 & loonie 1.3089 gaining in strength by +0.41% & +0.30%. The results of the Canadian elections, which are due within the next 24 hours, could have a big impact on loonie direction 

For further thoughts on Currencies & John on GBP check out - FX Update: GBP shrugs off Brexit stumble, key week for USD. Our equity strategist Peter Garnry on Q3 Earnings & Amazon in particular, as well as overall comment on equity valuations



  • UK: Public Sector Net Borrowing, CBI Industrial Order Expectations
  • CA: Retails Sales, Canadian Federal Elections Results Should Come Through, BoC Business Outlook Survey
  • AU: CB Leading Index
  • US: Existing Home Sales, Richmond Mfg. Index


Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

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

    Read article
  • 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
  • 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
  • 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
  • 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

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, 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. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such 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.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.