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 Wed 27 Nov 2019: Pause Button = Fed (for now)
So we had two FOMC members on tape o/n, Powell & Brainard...
Powell pretty much said the glass is half full, giving a positive take on the state of the US economy. Again as per his testimony from two wks back – for now, the pause button is firm pressed at the Fed
Brainard was also constructive on the economy, noting also that we still have not gotten the full effect of the three cuts this year
To see the full transcripts of their speeches please click here Brainard & Powell
Meanwhile the script is that equity markets continue to lift higher on news of further talks between Trump & Xi
So easy question, if the trade deal is as good as done, the Fed is happy with where things are, US flash PMIs bounced back strongly last wk, equities are up, volatility is down, then why are bond yields moving lower?
-
Overnight econ data saw a mixed skew
NZ 3Q retail sales beat very strongly at +1.6%a 0.5%e 0.2%p – part of this is being attributed to the Rugby world cup, where the sensational All-Blacks picked up a bronze
Sticking with the beats, US house prices ticked up +0.6%a 0.5%e, whilst new home sales saw strong beat & upward revision at 733k a 708k e 738k p
On the misses, US CB consumer confidence missed a touch 125.5a 126.9e 162.1p. Richmond mfg. big miss at -1a 6e 8p. UK high street lending missed at 41.2k a 43.1k e & 424.2k p – this potentially correlates with the big flash PMIs misses we got last wk from the UK
Worth noting that BoJ Core CPI also missed at +0.3%a +0.4%e +0.3%p
-
Cross-Asset Snapshot:
On equities, the bulls continue to have the field in the US & EU
S&P closed +0.22% at 3140, with Nasdaq-100 +0.17% to 8386. CAC40 +0.16% 5928. FTSE MIB +0.34% 23547
In Asia’s tue session, the ASX 200 was the outperformer at +0.83% 6788. The HSI (despite 9988 Alibaba’s HK successful listing & pop, +6.6% first day to 187.60 [176 was IPO strike]) reversed itself quite strongly into the close, finishing -0.29% to 26913
DXY not much to see, we were +5bp on Mon & -7bp on Tue (yawn)
Underneath the still waters of the USD, we do have a lot more activity – G10 saw big move on the SEK +0.50% vs. the USD, followed by CAD 1.3271 & NZD 0.6429 at +0.21% & +0.16% (Yes, our long kiwi crosses bias from last wk’s Macro Monday was very well timed)
On the flipside GBP 1.2864 & JPY 109.03 lost -0.26% & -0.11%
On EM FX, INR was the outlier with a +0.35% gain vs. the USD. Yet the likes of the Brazilian real 4.2386 +0.27%, Lira 5.7576 +0.30% & Mexican Peso 19.5191 +0.38% were on the backfoot vs the Trumpback
After over 2wks of dislocation between precious metals & lower yields – we started to get some sparkles overnight as USTs troughed to 1.7294, before reversing to these 1.7414 lvls
Gold recouped most of Monday’s loses with a +0.42% to 1461. Silver not to be outdone, clocked +1.10% to 17.0765
It’s the everything up market! No wait… volatility was lower, as VIX closed at 11.54 -2.8% for the session
-
It’s a brilliant day & its only going to get more epic – lastly, Happy Thanksgiving remember the US is out tmr & most folks bridge to the wkd…
There is always a trade somewhere
Namaste
-KVP
Today:
Other:
Some Pieces From the Rest of the SaxoStrats Squad
The market is trying to get back to the pre-Covid and pre-war times, but that model is broken. A new dawn is here and the financial world needs to adapt.
Steen Jakobsen,
Chief Investment Officer
A political switch in China towards less tough control of its people and companies may kick things back into gear.
Redmond Wong,
Market Strategist
While the economic situation in Europe may not be as bad as feared, there's still a plethora of things to fix.
Chris Dembik,
Head of Macroeconomic Research
As the world turns increasingly bipolar, equity markets face harsh times as they transition into the new reality.
Peter Garnry,
Head of Equity Strategy
New alliances and collaborations outside of China may lead to prosperous times in Asia.
Charu Chanana,
Market Strategist
For years, it was thought that the balanced portfolio was a thing of the past. But recent developments may have changed that.
Peter Siks,
Investment Coach
Following a dramatic and volatile 2022 with good returns, a lot of this year's commodity performance may be driven by Chinese politics.
Ole S. Hansen,
Head of Commodity Strategy
2023 could be a tough year for currencies but EUR and JPY may have some upside.
John J. Hardy,
Head of FX Strategy
The commodity-heavy Australian market may have a good start to 2023, as the Chinese focus on growth signals demand for Aussie resources.
Jessica Amir,
Market Strategist
From a near-perfect environment for speculative assets before 2022 to the opposite, crypto faces fundamental challenges.
Mads Eberhardt,
Cryptocurrency Analyst
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)
