APAC Global Macro Morning Brief – Happy Macro Thu 14 Nov 2019: Powell Signals The US Ship Continues To Sail Well

APAC Global Macro Morning Brief – Happy Macro Thu 14 Nov 2019: Powell Signals The US Ship Continues To Sail Well

Macro 1 minute to read
Kay Van-Petersen

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

 

Happy Macro Thu 14 Nov 2019: Powell Signals The US Ship Continues To Sail Well



Powell testified overnight before Congress on the state of the US economy – “Baseline outlook remains favourable” was how he kicked of his speech, which kind of sums up the Fed being on the side-lines for now

He did flag key risks as being sluggish growth abroad, trade developments & also low inflationary pressures. For full video of the testimony click here

It definitely feels like the Fed want to see the effect of the 75bp cuts that they have conducted over the last few months, which makes sense given the lag effect of monetary policy. Overall very balanced Powell

He will be continuing again tonight @ 23:00 SGT/HKT/CST (10:00 AM ET)

As a whole  the price action across asset classes was quite interesting. The S&P cash index closed up a touch at 3094 +0.07%, with tiny pop in the VIX to 13.00 +2.5%

The more interesting move was the pullback in yields, with US10yr from recent 1.97% highs to clos down sub 1.90% at 1.8860%. This lead to a pop up in gold & silver by +0.50% & 1.22% respectively to 1464 & 16.98

Oil also lifted up by half a percent to 62.37 – worth noting that due to the shorter US week, we will actually get the wkly US inventories tonight, as opposed to the usual Weds         


-

At the same time, it looked like one autocrat talking to another with the Trump & Erdogan press event. Say what you want, yet Trump seems to be clearly long Turkey & that is likely good for Turkish assets

The US listed Turkish iShares MSCI etf TUR had a big uplift of +1.47% to 26.18 – chart looks like we are about to break out higher, with the 28.34 highs of January potentially within reach. Trump was talking about $100bn trade deal with Turkey



Once again say what you want about Trump… +9yrs of The Apprentice, this dude is a master instigator, check out one of the things he said:

“I think the president [Erdgogan] has a great relationship with the Kurds”

Just amazing & that’s the magic. Folks will focus on comments / statements like this, whilst he moves on to doing whatever he wants

It will be interesting to see if Congress has other plans/ideas around Turkey, similar to what we previously saw with Russia

-

Worth also noting overnight that US inflation was mixed, beat on headline 1.8%a 1.7%e 1.7%p, whilst Core CPI which is more important missed at 2.3%a 2.4%e/p. In the UK headline missed, yet Core CPI was in line at 1.7%

Euro-zone industrial production beat at +10bp a vs. -20bp e +40bp p

-

Today once again about Powell’s 2nd half of testimony to Congress. We do also have three more FOMC members speaking: Quarles, Clarida & Evans

We have jobs data out of Aus, always a big mover for markets there both equities & the Aussie crosses, following which we will get the monthly China growth data

 


Namaste

-KVP


Today:

  • AU: Jobs Data, MI Inflation Expectations
  • CH: FAI, IP, RS U/R
  • EZ: GER prelim GDP, EZ Flash GDP & Flash Jobs Data
  • UK: RS, 30yr bond auction, CB Leading Index
  • US: PPI, Core PPI, Crude Oil Inventories, Natural Gas Storage
    • FOMC’s Powell day two testimony on the economy @ 23:00 SGT/HKT/CST (10:00 AM ET)

Quarterly Outlook

01 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Capital Markets UK Ltd. (Saxo) and the Saxo Bank Group provides execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation. Access and use of this website is subject to: (i) the Terms of Use; (ii) the full Disclaimer; (iii) the Risk Warning; and (iv) any other notice or terms applying to Saxo’s news and research.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer for more details.

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992