Macro Dragon WK # 32: New Month, Same Noise? Aug likely key events will be US NFP this wk, then US CPI, Powell at Jackson Hole, Debt Ceiling + Delta Variant Shuffle Macro Dragon WK # 32: New Month, Same Noise? Aug likely key events will be US NFP this wk, then US CPI, Powell at Jackson Hole, Debt Ceiling + Delta Variant Shuffle Macro Dragon WK # 32: New Month, Same Noise? Aug likely key events will be US NFP this wk, then US CPI, Powell at Jackson Hole, Debt Ceiling + Delta Variant Shuffle

Macro Dragon WK # 32: New Month, Same Noise? Aug likely key events will be US NFP this wk, then US CPI, Powell at Jackson Hole, Debt Ceiling + Delta Variant Shuffle

Macro 4 minutes to read
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 # 32: New Month, Same Noise? Aug likely key events will be US NFP this wk, then US CPI, Powell at Jackson Hole, Debt Ceiling + Delta Variant Shuffle 


Top of Mind…

  • TGIM & welcome to WK #32
  • Have a great start to the new month & wk ahead folks.
  • Continuing themes are of course Fed on Tapering [Jackson Hole, Aug 27-28], concerns on Delta variant & level of restrictions-lockdowns coming back (i.e. parts of US blinking with Masks back, etc), US debt ceiling, China regulations, China & HK securities sliding (in particular tech) & wrap up of earnings.  
  • August is last full blown summer month in the Northern Hemisphere, so that participation & liquidity is still likely more noise than signal.
  • Wk ahead likely focus on US NFP on Fri, as well as ISM data on Mon & Wed, with final PMIs across the board!
  • China Caixin PMI already in with a miss 50.3a 51.0e, continuing to show that the 2nd largest economy keeps cooling off & likely raising the delta (& gamma) of accommodative policy action in the 2H of the year.
  • For context the HSI was down -10% for the month of Jul, its worst monthly drawdown since Oct 2018. Since 2009 (post GFC) the HSI has only had 6 other months of double digit drawdowns or c. 4.3% of the 139 months.


    3211  HSI
  • Point is, we are in an obvious oversold territory – only thing is, a number of folks, KVP included thought we were there 2-3wks back… For the Long Side of the book, keep building that line, investing in China has always had regulatory & policy risks, nothing has changed there.
  • So we need a combination of volumes to drop on the down days, natural price consolidation and/or positive policy response, as well as follow throughs on positive price action -i.e. cannot have the Thu massively up to Fri massively down price action that we saw last wk.
  • And yes, sentiment is abysmal & there are no silver lining clouds – outside of time decay – that KVP can currently see. So for now, watch the price action & volume.
  • And yes, Weibo [WB $50.40] continues to be up +38% YTD in absolute terms (c. +90% in relative value terms vs. say JD Health Int [6618 HK], or c. +60% vs. Tencent [700 HK]), which is an echoing dislocation that we’ve talked about in a number of places:

Macro Dragon WK # 31: The Fed, China Tech [DIDI -42%, Tencent -12% but Weibo +44%!], Earnings from TSLA, AMZN, FB, MSFT plus Robinhood IPO [HOOD]

Macro Dragon Reflections: Divergence in China Tech Names, WB +47% YTD vs. range of -6% to -18% to -27% on Tencent, JD.Com & DiDi

321 China Tech

  • Lastly we continue to see a disconnect between real rates breaking lower at -2%, whilst gold is still failing to push higher at $1811. Meanwhile BTC which had a nice break to c. $42,600 is now back again south of the pivotal $40,000 lvl. Def. watch both of this spaces – as renewed lockdown & restrictions in the US that spur further fiscal aid (more stemies) would be a boost for risk assets, & in particular crypto & gold (i.e. debasement, excessive debt & diversification theme – all of which are structural & long-term in nature).   
  • Central Banks: RBA 0.10% e/p, BSB 5.25%e 4.25%p, BoE 0.10%e/p, RBI 4.00% e/p
  • Brazil expected to lean the charge with 75bp hike, could def. do +100bp as inflation keeps going higher with last print at +8.35%a +8.06%p. RBA, BoE & RBI are expected to be a wash.
  • Quite bit of Fed speak, yet likely key will be Vice Chair Clarida speaking at the Peterson Institute on Wed.
  • Econ data: US ISM mfg. PMI 60.8e 60.6p, ISM Serv. 60.5e 60.1e, AHE YoY 3.9%e 3.6%p, U/R 5.7%e 5.9%p & NFP 895K e 850 K p. China CPI & PPI will also be key this wk.    
  • Holidays: AU is out this Mon on a bank holiday.

    SG will be out next Mon given National Day, Wuhuu!!! KVP’s adopted home country turns 56 yrs young! Pretty remarkable that such a young nation – younger than most people grandparents & even parents – has achieved so many things that the vast majority of nations have failed to do. Also happy on the developments on vaccine front, knocking on c. 60% who’ve received both does, whilst over 75% have received their first.      
  • Other: Yes, yes we are all suffering from Covid Fatigue… hold the line. This too shall pass. Rather than focusing on what we don’t have or cannot control, lets thrive on what we can do & the abundance that we do have.

 

Recent Works to Keep In Heavy Rotation

 -

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

This is The Way

Namaste,
KVP

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
Disclaimer

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
Australia

Contact Saxo

Select region

Australia
Australia

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.