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Macro Dragon: Welcome to WK # 42 - 3Q Earnings, Brexit, EU Council, NZ Elections, US Stimulus? Macro Dragon: Welcome to WK # 42 - 3Q Earnings, Brexit, EU Council, NZ Elections, US Stimulus? Macro Dragon: Welcome to WK # 42 - 3Q Earnings, Brexit, EU Council, NZ Elections, US Stimulus?

Macro Dragon: Welcome to WK # 42 - 3Q Earnings, Brexit, EU Council, NZ Elections, US Stimulus?

Macro 2 minutes to read

Summary:  Macro Dragon = Cross-Asset 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: Welcome to WK # 42 - 3Q Earnings, Brexit, EU Council, NZ Elections, US Stimulus?

 

Top of Mind…

  • Happy Monday Folks & Welcome to WK # 42…

  • Hope everyone had an abundant filled wkd

  • What kind of week are you trying to have up ahead?

  • Focus: Again very much still US politics to dominate until the election results are clear, especially given Trump’s Covid-19 & 180 flip (as we postulated) on a stimulus bill. Note the US is out for a long wkd & back in fully on Tues. Still the nomination of ACB to fill RBG seat on the Supreme court should kick off today with a vote expected before Nov.

  • Anything is still possible in regards to potential presidential debates: Dragon’s ring-side coaching to one of the teams is to bin one of the debates, among other advice going forward

  • Whilst the situation is still dynamic, it looks like for Oct 15, Biden is hosting a townhall – given the WH turned down a virtual debate.

  • Whether we will see one more Trump vs. Biden, remains to be seen – it looks like the doctors have cleared Trump to be able to leave the WH, saying he is no longer considered a transmission risk, yet not confirmation about him testing negative for Covid-19 – likely because he still has Covid. Worth noting so far, he seems to be holding up well.

  • It is worth noting that developments on the side of Brexit continue with Oct 15 deadline, yet are not gaining the headlines & focus they normally would.

  • We also have election in NZ, where the incumbent is expected to easily secure the next term. Plus coming Fri & WKD will see IMF meetings whose conclusion will likely be – we need more fiscal, risk to recovery if fiscal stalls, global healthcare framework is needed, etc.

  • Markets: Really all about the Stimulus, the move on Fri was very much on talks that trump wanted a fiscal deal. It’s unclear how much of an effect the kick-off of 3Q earnings will have.

  • Earnings: A number of banks will be reporting their earnings this wk including JPM, Citi, BoA, GS, MS, WTC, UBS & MS. A few other big names are Blackrock, United Health, Honeywell & chipmaker TSM.

  • There are a number of interesting charts to look into, including: lower lows in USDCNH, GBPUSD / Bitcoin / Gold / Silver tactically breaking out higher from recent trading ranges, the emerging market etf (EEM) breaking out higher…

  • …as are Caterpillar [CAT] + Deere & Co [DE]…

  • …with the Nikkei & ASX looking to break-out higher on previous resistance lvls…

  • Economics: Inflation themes wk with key figs out of US, CH + EZ. Also have GER ZEW & Aus jobs data.

  • Central Banks: Indonesia 4.0%e/p, South Koreas 0.50%e/p, Chile 0.50%e/p

    BOE’s Bailey set to speak on Tue 13 Oct 00:00 SGT, RBA’s Lowe set to speak on Thu 15 Oct 05:45 SGT

  • Fed Speak: Quarles 3x, Clarida @ 21:00 (Wed 14 Oct), Kaplan 2x & Kashkari

  • Holidays: US & CA out on Mon (12 Oct)

-

Start-to-End = Gratitude + Integrity + Vision + Tenacity. Process > Outcome. Sizing > Idea.

This is the way 

KVP

Outrageous Predictions 2023: The War Economy

  • Billionaire coalition creates trillion-dollar Manhattan Project for energy

    The constantly growing global need for energy drives the world's richest to huddle up and launch a R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb.
    Read article

  • French President Macron resigns

    The political stalemate in France and the rise of Marie Le Pen following the 2022 elections corners President Macron, forcing him to give up on politics and resign from his position. At least for now.
    Read article

  • Gold rockets to USD 3,000 as central banks fail on inflation mandate

    As markets and central banks realise that the idea that inflation is transitory is wrong, and that prices will remain higher for longer, gold is sent through the roof, hitting a price tag of USD 3,000
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  • EU Army forces EU down path to full union

    With continued challenges in the region and a US military that isn't aggressively enacting its former role as global policeman, the European Union agrees to create its own armed forces, bringing the whole region closer.
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  • A country agrees to ban all meat production by 2030

    In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.
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  • UK holds UnBrexit referendum

    Following a recession and domestic pressure, the United Kingdom is thrown into political turmoil that will end with a vote to wind back Brexit.
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  • Widespread price controls are introduced to cap official inflation

    History tells us that with the war economy comes rationing and price controls. And this time is no different, as policymakers introduce strict price controls that lead to a range of unintended consequences.
    Read article

  • OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve asset

    Sanctions against Russia have caused widespread turmoil due to US Dollar moves in countries across the globe that don't consider the US an ally. To relieve themselves from this, they leave the IMF and create a new reserve asset.
    Read article

  • USDJPY fixed to the USD at 200 as Japan overhauls financial system

    Following the challenges that faced the Japanese Yen in 2022, the Bank of Japan attempts to keep the currency from sliding. Unsuccessful on the long-term, Japan will launch a reset of its entire financial system.
    Read article

  • Tax haven ban kills private equity

    With the war economy comes an increased focus on national interests and sovereign nations' ability to assert themselves. In that regard, the OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.
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