Macro Dragon: Trump = Teflon Don

Macro 1 minute to read

Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Daily Cross-Asset Global Views


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

 

2020-Jan-09

Macro Dragon: Trump is the Teflon Don... 

Before we get into it, for those that are back – or on the way back in – from what was hopefully a restful year-end holiday break, Happy New Years!

Let me sincerely (hand on liver) wish you, your families & teams the best of 2020. May your health, vigor & experiences be excellent & full of fun + laughter. May you continue to grow & develop yourself. May you be awash in gratitude & contribution plus fall [tail] backward into more money than Bezos.

We’ll be shaking things up from KVP’s side, so expect a lot more trade views going forward, as well as 20 long-term trades views for 2020 – which KVP will do a special piece & mini-series on.

Ok let’s get after it…


Early Days… Part III

(here were Parts I & Parts II – & the foundation piece from Monday)

To say this wk has been a dynamic one, would be an understatement – you should see the KVP chat rooms with clients yest, more intra-day 180 degrees than a protractor, yet as covered in the Monday foundation piece: New Year Kicks off with Middle East Conflict – all with the overall skew that in hindsight this is going to be a great tactical opportunity to buy the dip in equities & sell the risk-off wave in the likes of energy, gold, yen, US bond futures, etc.

All super tactical in horizon & views…

Well overnight these were just some of the wicked reversals from the highs/lows:

(note these are un-levered moves, i.e. for FX you have to factor at least +5x to 10x to the rtns)

  • Gold closed -1.14% to $1556, -3.4% from a high of 1611
  • Brent closed -4.2% to $65.44,  -8.8% from a high of 71.75
  • USDJPY closed +0.63% to 109.12, +1.36% from a low of 107.65
  • S&P Futures closed  +0.77% to 3260, +2.49% from a low of 3181


We seem to be in a stand down situation between Iran which has explicitly said they are not looking for a War, which is also something that Trump echoed in his speech Wed evening Asia time (Wed Morning US time).

This is good, this is very good – not only to the KVP bullish skew, but more importantly because war is insane. There were no casualties from the base attacks.   

Here is a link to the text on Trump’s speech overnight, love the closing segment which will be shared below.

Would encourage everyone to read the statement - as its about as presidential, historic & brilliant as these speeches come.

If Obama had given this speech, people would have been over the moon.  



“Finally, to the people and leaders of Iran: We want you to have a future and a great future — one that you deserve, one of prosperity at home, and harmony with the nations of the world.  The United States is ready to embrace peace with all who seek it.”


 
That is not a president seeking war & conflict in the Middle East.

Trump has been very adamant (& absolutely correct) about the wasted spending of American military conflict abroad (its in the trillions!) as well as US blood being spilt in senseless campaigns, that have just not delivered what they intended to (unless you’re a military contractor and Dick Chaney, oh wait…).

Now does this mean, that things are done & dusted in the middle east?

Of course note, the situation is still fluid & who knows if this is really the last of Iranians retaliation.

They have definitely saved face & shown a lot of force in the response to the assassination of their general – i.e. Iran is not to be trifled with, we can also hit back directly.

However it does look – at least for now – that we are past peak conflict and are seeing the best potential scenario that we covered in yesterday’s Macro Dragon.

If this is as bad as it gets, Trump comes out of this like the Teflon Don – this is a major, win.

The paragon of Presidential, to take out the queen chess peace from your opponent at minimal cost.

This is a big deal, will he ever get the credit from the establishment?

Hell no, not in a million years.

But his base will love it, the Reps will love it & folks that may have been on the fence will like it – we are genetically wired to flock towards perceptions of strength & power – be they real or not. And what we have witness over the last wk has been very real. 

-

Good luck out there today & to finishing the week strong… 

To our Middle East kinfolk happy synthetic Friday & hopefully safe peaceful weekend ahead


Namaste,

-KVP


-

On The Radar Today:

(Times would be SGT)

  • AU: Trade Balance which has beat vs. expectations 5.80b a vs 4.10b e   

  • CH: CPI +4.7%e 4.5%p PPI -0.4%e -1.4%p

  • EZ: GER Industrial Production, German Trade Balance, EZ U/R

  • UK: BoE Carney on ze hoot @ 17:30

  • CA: Housing Starts, Building Permits
    =>Poloz @ 03:00

  • US: Weekly Jobless Claims,
    => FOMC’s Clarida @ 21:00 + FOMC Kashkari @ 22:30 + FOMC Williams @ 00:30

 

What We Are Reading From SaxoStrats:

Disclaimer

Saxo Capital Markets (Australia) Pty Ltd 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 Combined 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.

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)

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) Pty Ltd 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 and Product Disclosure Statement 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. Trading in leveraged products such as CFDs and Margin FX products may result in your losses surpassing your initial deposits. 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.

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.