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
APAC Global Macro Morning Brief
Awesome event o/n in Singapore, as we hosted our Annual Fintech Conference: Fintech Unfiltered – Opportunities & Pitfalls in the digital 4.0 world
It seemed that each speaker was better than the last, panel was also fantastic (panels are normally the duds at conferences – because the lvl of the moderator => quality of the panel dialogue) as we had the sensational International Moderator Chloe Chow from Brilliant Media & Productions
KVP’s personal favourites were Anu Sahai from McKinsey & Co on “Finding Digital Alpha”, as well as Harvard Innovation Lab’s brilliant Chris Colbert on “Inside Innovation”
A real pleasure & honour to host the event – special thanks to all my colleagues who helped make it a successful, smooth & fun event, with a special shout out to our marketing & events dream teams. KVP did not make the drinks at Smoke & Mirrors, yet always open for any war stories that went down
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So latest on trade noise is, it does not seem like noise – Trump seems to be blinking, looks like there is going to be easing on tariffs from both sides & we are closer to a “Phase One” deal. The risk-on sentiment is being loves by the bulls, as can be seen by much higher lvl of yields & lower lvls of precious metals…
We have broken out of recent trading ranges on UST yields (+1.50% to +1.80%), getting up as high as +1.97% before reversing to close at +1.9173 – this is a big deal folks. With 2.00% being key lvl to get over, next topside resistance would be c. 2.12% then 2.20%... and yes we can still squeeze all the way back to 2.50%... yet KVP stands with the meta trend for global yields being lower – i.e. there is just too much debt in the system. Yes we can bounce economically for 6-9-12m… yet the gravitational pull of the debt in the system, gets stronger & stronger with every passing day
Gold & Silver were down -1.48% & -3.00% at 1,468 & 17.1080, again breaking below recent trading range support levels
Silver is looking especially interesting here in the Friday Asia morning at 16.9630 -0.82%, below the 100day moving average at 17.0969, next big level to watch out for is the 200DMA at 16.1139, which is a -5% move from here. The real line in the sand here is the 14.80 lvl from mid Jun, which was the lvl before the massive bullish breakout
Sticking with metals, yet on the other side of the risk-off/risk-on coin, Copper flew by +2.35% to close at 272.75… these again are big lvls not seen for months – kudos by the way for AVM flagging the long short play from just 2 wks back
FX wise, its been risk on as we see DollarYen break up through 109, closing at 109.28 +0.28%, John Hardy touches further on currencies with Market celebrates US-China trade headlines
More green shoots from global manufacturing PMI figures and South Korea are covered by Peter Garnry
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Next week is going to start off short, as its long weekend in the US with Monday being Veterans day. Data wise inflation will be key in the US & EZ, as well as monthly growth numbers out of CH. Jobs numbers always big movers in Aus
Central bank wise, there will be decisions out of New Zealand, Philippines & Mexico. Currently markets are expecting 25bp rate cuts from NZ to 0.75% (1.00%) and MX to 7.50% (7.75%)
We are seeing more signals & chatter on green shoots - again something that KVP thinks is more of a tactical bounce rather than any long-term structural delta, yet always respect the price action – see Dembik on the most important chart this month, China’s credit impulse
And no doubt there will be further focus on the US / CH show
Namaste
-KVP
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2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
