Macro Dragon: #20, EQ & CMD Up, BO & USD Down?

Macro Dragon: #20, EQ & CMD Up, BO & USD Down?

Macro 2 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.


(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

Macro Dragon: Week # 20 - Technicals Suggesting EQ & CMD Up, BO & USD Down...

  

Top of Mind…

  • Just sharing some quick notes purely from a technicals, price-action + chart basis over the wkd (i.e. zero fundamentals here)
  • EQ: Major Indices looking super bullish, particularly China A-50 Shares, Dax looking like it could be looking to break-out... & of course things like the Nasdaq already had the anti-bodies...
  • Interesting to see from a sector basis the incredible out-performance on the Consumer Discretionary etf in the US… XLY +4.5% vs. their Consumer staples cousin of XLP, +0.875
  • FX: Dollar is looking weaker against majority of crosses... and not just DM but also EM FX... MXN, NOK, RUB... a lot of these look like they have room to run... despite clocking decent strength over the last 1 to 2 wks… CNH in particular looks set for more strength than weakness despite the US vs. CH rhetoric
  • In a nutshell it feels like the risk-on that equities have enjoyed, is now starting to fully feed into the rest of the EM FX space
  • CMD: Gold consolidation continues... meanwhile silver looks like it could be trying to break out higher... and copper finished, close to last wk's high.... Oil still bid... yet worth noting highs were already in from last Tues
  • Worth noting that real interest rate expectations continues to move lower on the chart – signaling a disconnect (at least for now), with gold staying pinned around $1700 rather than catapulting up
  • KVP does not expect gold to stay consolidated here for long… note its not about nominal yields… but real yields & its in the Fed / Treasuries interest to keep real rates negative for multiple years if not another entire decade
  • Volatility? What volatility.... structural move lower... VIX is sub 30... -25% last wk... FX vol predominantly lower again the USD, with some exception on CAD & GBP yet even those not materially bucking the trend
  • BO: overall looking weaker which would imply lower bond prices, higher yields....
  • Economic data – Obviously a lot lighter than last weeks’ PMIs, ISMs, NFP & Unemployment Numbers… probably most key this wk will be inflation data out of the US & China, China monthly growth numbers for Apr & stale GDP flash figures for Germany & the Euro-Zone
  • Overall the sentiment in price action continues to be bullish, i.e. bad/poor economic data points are not really having a lasting effect on equity or bond pathways. So until that changes, keep that in mind…    
  • US: Inflation 0.4%e 1.5%p, Core 1.75%e 2.1%p, PPI, Jobless claims (note we are now +33m in 7wks), Retail Sales, Empire Mfg., Industrial Production, Capacity Utilization, JOLTS  
  • CH: Inflation 3.7%e 4.3%p, PPI -2.6%e -1.5%p, M2 Money Supply 10.3%e 10.1%p, New Loans 1300B e 2850B p, Monthly Growth Figures [FAI -9.5%e -16.15p, IP 1.5%e -1.1%p, RS -5.9%e -15.8%p, U/R 5.8%e 5.9%p]
  • EZ: Industrial Production, ECB Economic Bulletin, GER Flash GDP -2.35e 0.0%p, EZ Flash GDP -3.3%e/p, Trade Balance
  • JP: BoJ Summary of Opinions, Leading Indicators, bank Lending, Current Account, M2 Money Stock, Flash Machine Tool Orders, PPI
  • Central banks:
    • Rate decisions out of New Zealand & Mexico.
    • We also have a lot of Fed speakers on the docket including Powell on economic issues.
    • The BoC will release a review on their financial systems & we will also have Poloz speaking – note, that Poloz successor was picked last wk. Its Mark Carney former #2 back during the GFC, Tiff Macklem, who is set to take over as the new BoC governor on 3 Jun 20.

-

Start-End = Gratitude+Integrity+Vision. Create Luck. Process > Outcome. Sizing > Idea.


Namaste,

KVP

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