Macro Monday Week 38: From Spiking Oil Prices to FOMC Decisions...

Macro Monday Week 38: From Spiking Oil Prices to FOMC Decisions...

Macro 1 minute to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Light week ahead, key focus will be on Flash PMIs, RBNZ as well as rate decisions from the likes of the central bank of Mexico. Markets will still be busy digesting the hawkish cut from the Fed from last wk. Look for Fed Speak from Dovish Bullard & Non-Dovish George.


Macro Monday Week 39: Flash PMIs, RBNZ & Fed Digestion...

Mon 23 Sep 2019

A  replay of the call is available HERE


Taking advantage of the light week ahead (at least from the known unknowns), for a short & quick MM this this week  

Really all about post FED digestion, flash PMIs theme, RBNZ decision alongside the likes of Mexico which should be cutting rates by 25bp. Also few key governors speaking Draghi twice, Kuroda, Carney & Lowe. On Fed speak side, watch out for Bullard the Dove & George the Non-Dove

Lastly our MM instincts from last wk’s Monday open on fading the oil spike on the short side & going long US equity futures that were being sold off that morning, have played superbly. Onto the next one, patience & persistence are elements of consistent returns over time. Kudos to those that thought the same & acted accordingly.


Wishing everyone a healthy, phenomenal, smooth, profitable & lucky wk up ahead.


Namaste

-KVP

**

Summary of Prior Week:

  • Geo Politics: Key focus was ME strikes & oil, which we covered last wk. Trump once again on the offence vs. the Fed… which had

    FED: A hawkish cut, as no new adjustment seen for further cuts or hikes. It looks like they are expecting one more cut by year end & that seems to be exactly what is priced on Jan 20, Fed Fund Futures
  • Key dates are Oct 30 (43.4%) & Dec 11(67%). Note repo spikes is linked to technical factors (bank reserves available for lending) & not similar to the spikes in GFC
  • FI: Tighter for the wk, given cont. confusion from last two wk’s of decisions from the ECB & Fed
  • FX: DXY higher for the wk to 98.51 +0.26%. ZAR, NZD, AUD & CNH sank the most vs. the USD – whilst the Yen & Rub were notable to the upside
  • CMD: With yields lower for the wk, gold & silver regained their footing. Energy obviously higher given the epic open (+15% to +19%)  from Mon
  • Looks like our initial instincts to fade the oil pop, as well as buy the sold-off US EQ futures that Mon Asia mrn were on point & very profitable. Kudos to those that monetized
  • EQ: EZ over Asia over the US performance wise for the bulls. The YTD numbers cont to be very strong
  • Vol: +11.5% pop to 15.32

 

COT Report: [@Ole_S_Hansen]

 

  • Again reversal on last wk’s reversal, this time we see USD net-longs move higher by a large +22% to $15.5bn ($12.7bn)
  • Note the min 1yr extremes in NZD & BRL positioning, plus according to the CoT report the market is still heavily shortly sterling at c. -86K contracts
  • Same trend as previously on Commodities, after the previous wk’s +3x increase in Net-Long exposure… we saw another large increase by +80% in the latest CoT reports. Quite impressive given the joint increase in USD net-longs..

Week Ahead

Key Focus:

  • Flash PMIs  | US GDP & PCE | RBNZ| ME / Energy | Countdown to Oct 1st | Repo Rate & Liquidity Funding

Central Banks (SGT):

  • RBNZ 1.00% e/p (25) BoT 1.50% e/p (25) PH 4.00%e 4.25%p (26) MX 7.75%e 8.00%p (27)

Fed Speakers (SGT):

  • Williams, Daly, Bullard (24/26), Evans, George (25), Kaplan, Clarida

 

Other (SGT):

  • JP Bank Hol (23) Draghi (23/26) Kuroda (24) Lowe (24) Carney (26)

Econ Data:

  • US: Flash mfg. 50.3e/p Serv. 51.5e 50.7p, Richmond Mfg. Index, House Data, Final GDP 2.0%e/p, TB, Durable Goods, Personal Spending & Income
  • CH: CB Leading Index
  • EZ: Mfg. 47.6e 47.0p, Serv. 53.1e 53.5p, GER mfg. 44.6e 43.5p Serv. 54.3e 54.8p, GER Ifo Survey, M3 Money Supply, Private Loans
  • JP: Flash mfg. 49.5e 49.3p, BoJ Mins, BoJ Core CPI, Tokyo CPI
  • UK: Public Sector Net Borrowing, High Street Lending
  • NZ: TB, RBZ, Daylight Savings Time Shift (28)
  • AU: Flash mfg. 50.9p Serv. 49.1p
  • CA: Wholesale Sales

Greater China Focus (GST: slides 10 to 12) – Focus on Oct 1st 70th National Day & Summary of Recent Measures Taken by China over last few quarters


Chartography & Price Action

No charts this wk

Don’t forget to bookmark & check our Daily SaxoStrats calls from the European morning session c. 09:00 CET

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