Global Macro APAC Morning Brief - TGIF & Happy Macro Friday, getting ready for WK 42
Summary: Morning APAC Global Macro & Cross-Asset Snapshot
(Note that these are solely the views & opinions of KVP/sender of this email & do not constitute any trade or investment recommendations.)
Happy Macro Fri 11 Oct 2019
APAC Global Macro Morning Brief – TGIF & Happy Macro Friday, getting ready for WK 42...
Quick one today as we get towards the wrap up of the wk. The only clarity on the US / CH Trade War is a lack of clarity… have a feeling we will look back at this period of just one with a lot of noise
With that said, the wkd digestion on the talks thus far will be interesting to say the least – especially with the potential currency pact thrown in for good measure… sure… lets just makes things even “easier”
With all the crazy & bearish headlines this year… its worth noting that at the end of the day, YTD most major equity indices are up double digits & that is in US dollar terms!
KVP still feels that it would be imprudent not to entertain tail-risk hedges given the excellent returns on equities & bonds so far this year…
Q4 & Q1 could bring some interesting risks, from an Elisabeth Warren or Bernie Sanders breaking towards the forefront on the Democratic pedestal – potentially taking the S&P from around these 2900 lvls closer to the 2300 – 2500 range, a c. -20% to -15% pullback, and likely much more on the sectors like biotech…
To an escalation of events in HK… to renewed North Korea nuclear launches to further destabilisation in the Middle East – The US / Turkey / Kurds situation in Northern Syria looks like a train crash in slow motion… likely driving home the point that nearly all wars & conflicts are insane
Next week will see:
- Most importantly the Oct 15 was the scheduled date for the next round of US tariffs on China to go into effect… so whether or not that get cancelled, delayed, left unchanged or double down on… remains to be Trumped… I mean seen
- Added to which it will be a shorted wk in the US given Monday is Columbus day so three day wkd for most, which could have an impact on liquidity for the overall wk. JP & CA are also out on Mon
- Rate decisions out of Singapore, South Korea and Hong Kong (where folks have been once again focusing on potential break of the peg… hey HFs have been trying this since the 80s… at least they are consistent… I would not reverse overall hedges on HK… if that 25,500 lvl breaks lower… it could be a big fall)
- We will also have RBA Oct minutes, where they cut rates by 25bp to the current 75bp… makes you wonder where we will go in the next Australian recession… which close to 3 generations have never seen nor experienced…
- There are a few central bank governors on the docket, including BoJ’s Kuroda, BoE’s Carney, the Bundesbank’s Weidman & the usual troop of Fed speakers
- Inflation will also be a theme from an econ data perspective with prints expected out of China, New Zealand, Canada, the UK & the Euro-Zone. Aussie jobs data & China GDP will likely be the biggest potential movers out here in Asia
Econ Data Today:
- NZ: Business Manufacturing Index
- CA: Jobs data – employment Change, 11.2K e 81.1k p, U/R 5.7%e/p
- EZ: German Final CPI 1.2% e/p
- US: UoM Consumer Sentiment, Import Prices, FOMC Member Rosengren @ 01:15am SGT/HKT (13:15 ET)
4th Quarter Outlook is out: Taking Down The Killer Dollar
- Please check out our latest quarterly which focuses on the key culprit that is sucking up all the oxygen in the global economy, the strong US dollar
- To catch this wk’s Macro Monday Click here… & replay of the call here
- Otherwise catch WK # 41 Macro Monday here on Monday 08:30 SGT/HKT (Sun 20:30 ET)
- Don’t forget to bookmark & check our Daily SaxoStrats calls from the European morning session c. 09:00 CET
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Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.
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