APAC Global Macro Morning Brief – Happy Macro Tue 3 Dec 2019: Is this really risk-off, or a speed bump during Santa Rally?

APAC Global Macro Morning Brief – Happy Macro Tue 3 Dec 2019: Is this really risk-off, or a speed bump during Santa Rally?

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, they do not constitute any trade or investment advice of any kind.)

To see this wk’s Macro Monday click here

APAC Global Macro Morning Brief

 

Happy Macro Tue 3 Dec 2019: Is this really risk-off, or a speed bump during Santa Rally?



So KVP turned tactically bearish on Thu Asia morning, post Trump signing the HK bill – as we awaited a response from China. Which to be fair, if this is it… it’s a bit of a yawn… looks like some NGOs will be under sanctions & US Warships cannot park in HK… not forceful measures imho

When the news came out, the bullish moves that we initially saw during the day were broadly unchecked, i.e. equities were still well bid as Europe got in, bond yields had big moves with UST getting to 1.8570 before reversing to 1.8189 – above the key pivotal point of 1.80%... this was post a c. 1.77 close last wk…

Gold & silver still closed down, yet off the initial lows of the session yest.

So is this really the start of risk-off or this a speed bump during the Santa Rally? As always… very hard to know… we do know momentum is to the upside & if this is the only response coming out of Beijing, then we are likely to lift up further from here – as it likely means that Phase One is still on the table

Now if Beijing were to top this “Symbolic” move with some more potency, then we could get Santa losing a limb or two

Still lets see, as we start Asia Tues mrn, we are dwn c. -14bp to -22bp on US equity futures, ASX futures are down -1.7% (as Asia catches up with the positive close yest.). KVP would expect gold & silver to be a bit more bid today as they closed down c. -0.11% & -0.69%

Oil also had a rollercoaster session, after Friday sell-off, we initially rallied hard on Monday, before reversing & closing lower on Brent 60.87 -2.5%. Yet WTI which was dwn more than -5% on Fri, still mnged to hold onto gains for a +1.43% lift

Still interesting to see DollarYen already poking it head back above 109 this Tue Asia Mrn, after a -0.47% to 108.98 o/n

Look out for the RBA rate decision later today, which is likely going to be a wash

The market is expecting rates to be on hold, yet the risk is to the downside for a surprise cut… with that said, there is a lot of expectations in the market, so we could get a bid AUDUSD 0.6819 +0.83% o/n, if they are not as dovish in their statement as expected

-

Econ Data O/N:

Pretty big misses in the key Aussie building approvals -8.1%a -1.0%e 7.2%p & Company Operating Profits -0.8%a 1.0%e 4.8%r

We then continued to get the mfg. PMI beats - post the big beats that we had gotten out of China over weekend – as Japan came in at 48.9a 48.6e/p. China Caixin Mfg. PMI beat at 51.8a 51.5e 51.7p

Then GER mfg. rose for 2nd month at 44.1a 43.8e, whilst overall EZ mfg. came in stronger at 46.9a 46.6e. UK figures also had a bounce on the final (had missed on flash) at 48.9a 48.3e

Then the focus yesterday was the US ISM manufacturing miss at 48.1a 49.2e 48.3p. This likely makes the ISM Non-Manufacturing numbers due on Weds, that more key – especially as the service economy of the US is +70% of the economy

Interesting thing is we continue to see this divergence between US ISM mfg. & Markit Mfg., with the latter beating at 52.6a 52.2e.

Lets see how the services data come out tomorrow

-

Wishing everyone a brilliant day ahead

Namaste

-KVP


Today:

  • JP: Monetary Base Y/Y, 10yr bond auction
  • NZ: Milk auction
  • AU: RBA rate decision, AU Current Account
  • UK: Construction PMI, 10yr bond auction, BRC Retail Sales Monitor
  • US: Wards Total Vehicle Sales
  • EZ: PPI, French Gov. Budget Balance, Spanish Unemployment Change

Other:

 

Some Pieces From the Rest of the SaxoStrats Squad

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