APAC Global Macro Morning Brief – Happy Macro Wed 30 Oct 2019: The Risk & Opportunity Of The Fed Today... APAC Global Macro Morning Brief – Happy Macro Wed 30 Oct 2019: The Risk & Opportunity Of The Fed Today... APAC Global Macro Morning Brief – Happy Macro Wed 30 Oct 2019: The Risk & Opportunity Of The Fed Today...

APAC Global Macro Morning Brief – Happy Macro Wed 30 Oct 2019: The Risk & Opportunity Of The Fed Today...

Macro 1 minute to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Morning APAC Global Macro & Cross-Asset Snapshot

(Note that these are solely the views & opinions of KVP, they do not constitute any trade or investment recommendations of any kind.)

To see this wk’s Macro Monday click here


Happy Macro Wed 30 Oct 2019


APAC Global Macro Morning Brief – The Risk & Opportunity of the Fed Today...

So seems like there is a contingent of the market out there that believes we may not get a Fed cut today – with a 94% implied probability of a cut, that leaves 6% expecting no change

If we did see not rate cuts today, UST are likely moving form these 1.83 lvls to 2.0%, precious metals would be crushed & equities would also likely sell off heavily

In fact the few things that would be up in such a scenario would be volatility (VIX is still at 13.20, remember the VIX Apr calls 65 strike trade from last wk) & the USD, as well as the usual risk off relative value plays (i.e. staples & utilities vs cyclicals, yen, swiss franc)

Whilst everything is possible, KVP does not think this FOMC board has the will to buck the trend so strongly – also recall we have three outliers from the previous meetings, Bullard who advocated -50bp cut, George & Rosengreen who were for no change… since then we have had worse US economic data, with a pair of ISM readings from last month, that missed… and now have two back to back months of ISM mfg. in contraction territory

Still anything is possible – what if they cut by 50bp, if perhaps they read KVP’s piece yesterday on both skin in the game, as well as a half life on 2020 given the US’s 2020 elections. In such a scenario of a -50bp cut, bond & precious metals bulls would have a field day… and US equities would likely make ATHs – AGAIN!

The more likely scenario is still a 25bp cut, with the key point being the communication & indication of where they are sitting into the rest of the year. More than likely they will be on the side-lines & wait + see mode…

Yet KVP still feels at some point over the next 6-8months, Fed are going to cut: like a fat boy carving up a chocolate cake, like Edward scissor hands at a gardening seminar, like Trump as head of the Fed, like an airline operator on the 737 Max, like Zuck in front of Congress, etc… You get the picture…

Again remember, the Fed has a half-life on 2020… don’t think they want to be seen moving rates in the 2nd half of an election year with an administration that has been very vocal about what the Fed should be doing

Its worth re-flagging again that most of the key US economic data this wk falls on Friday, yet we will get 3Q US GDP tonight where 1.6% is expected vs. 2.0% from 2Q


And Bojo actually gets a win! Trump is going to start being rationale next. So it looks like Dec 12 is going to be a general election… albeit by the looks of the news flow early Weds Asia morning… seems to be quite a bit of confusion of around what was just passed as folks just cannot keep track...

This time around KVP is surprised that sterling crosses are not much higher, cable was unchanged o/n  at c. 1.2862… would have thought that we should be north of 1.2900 with some signs of progress...

EURGBP was also same lvls at 0.8635… and no change in either this Asia wed Morning


Lastly with all the focus on the Fed… it could end up being that the most interesting meeting will be from the BoC. They have continues to be relatively less dovish than the Fed, so it will be interesting to see what Poloz gets up to this Asia evening

Here are the links to the last Sep 18 FOMC statement & Sep 4 BoC Rate Decision, with the former cutting by 25bp & the latter leaving rates unchanged at 1.75%

Profitable positioning everybody, have a great day




  • AU: 3Q CPI 1.7%e 1.6%p CORE 1.6%e/p
  • EZ: Regional Flash CPIs & GDP, German Jobs data
  • US: 3Q GDP 1.6%e 2.0%p, Crude Oil Inventories, FOMC statement at 02:00 / press conference at 02:30
  • CA: BoC Statement & Monetary Policy Report



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.