Macro Dragon WK # 36: Post Jackson Hole, US NFP Fri, Final PMIs Month-End, Afghanistan-End? Macro Dragon WK # 36: Post Jackson Hole, US NFP Fri, Final PMIs Month-End, Afghanistan-End? Macro Dragon WK # 36: Post Jackson Hole, US NFP Fri, Final PMIs Month-End, Afghanistan-End?

Macro Dragon WK # 36: Post Jackson Hole, US NFP Fri, Final PMIs Month-End, Afghanistan-End?

Macro 8 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Cross-Asset Quasi-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 WK # 36: Post Jackson Hole, US NFP Fri, Final PMIs Month-End, Afghanistan-End?


Top of Mind…

  • TGIM & welcome to WK #36…
  • First up, Afghanistan remains top of mind, not just due to Kabul Blast last wk, Macro Strike: Afghanistan Airport blast kills over 70 people, including 12 US Service Members, Biden on the tape... yet the sub 2 days deadline for US to exit the country based upon their agreement with the Taliban.
  • KVP will not weigh in on the finger pointing, linear analysis & generally arm-chair expert / keyboard warriors posturing around this… he will flag two key things to watch out for this wk.
  • One: Wed, Sep 1 - Please join us next week when we set up a one of a kind webinar on Afghanistan: Return of the Taliban with Former US Ambassador to Afghanistan, Mr. Hugo Llorens, alongside our always excellent CIO & Chief Strategist Steen Jakobsen, who will be hosted by Lester Chan, Greater China Head of Wealth Management.
  • So do please sign up, we’ve pulled the stops to make this as global as possible across our many clients, offices & time-zones: It will be 2000 SGT, 1400 CET, 0800 ET.
  • Two: Macro Reflections & thought piece on the entire set of events & parameters.
  • Month-end wk, means things could get noisy from a flow perspective across asset classes – so full settlement of Jackson Hole will likely not be clear until next wk Tues – as both the US & CA are out on Mon for Labor day.
  • And of course, if that was not enough, we got final PMIs on Fri & more importantly for Macro & thoughts around the Fed, NFPs. 750K is was is currently expected, if we get a banger of a number, read +1M… we could once again see a tidy reversal of the moves we saw last Fri. If we get in-line, probably not much of an effect… if we get a big miss, sub 500K… then we could see quite a healthy extension of where we closed last wk.
  • It worth noting the big moves last wk from +13% on Brent, to +4.4% on silver, +5% on the Russell, etc… were a big reversal from the previous wk. So once again, unless your US Big Cap equities (S&P, Nas-100)… you’ve just been range bound for months.  
  • Jackson Hole - rightly or wrongly - was taken as Risk-On Disco Party by markets, with EQ & CMDs up, volatility/yields/USD down - a big chunk which was reversing the previous wks move that saw risk-off across assets. Powell is still in the transitory inflation camp. The previous link is to the actual recorded speech, the transcript can be found here
  • With the next Fed meeting on Sep 22, now likely seen as just a set-up for Nov 3 – post this wk, attention will fully get back to this $3.5T infra bill.
  • From the Asia Pacific, CH & HK equities are still far from our of the clear & the monthly + wkly closes are going to be key to see if we continue to consolidate around the bottom here, break out to new highs, or go from oversold to another -5% to -10% lower. Sentiments continues to be super poor, bearish, with no bull in sight.
  • SG has hit +80% of the population being fully vaccinated, which makes us on the Dragon continue to like upside in SGD especially vs. EUR, SEK, JPY & even tactically vs. AUD, USD & NZD. Sydney continues to make new record highs in Covid cases, which likely means the restrictions are not coming off anytime soon (RS & GDP due this wk for AU).
  • Oh & our long NOKSEK 0.9915 continues to do well – loving the price confirmation.

  • The "easy" move is to 1.02/1.03… this puppy was +1.05 pre-Covid. From these 99c lvls (initially flagged this at 97c), KVP would have a wide stop to at least 96c (its a volatility cross with NOK getting a beating on risk-off market moves), with tgts set at 1.02, 1.04 & +1.06. Would have the usual dynamic risk-management of the rubber band stop (i.e. first tgt hit, stop moved to entry, 2nd tgt hit, stop moved to 1st tgt, etc). In addition to chart & price confirmation, the key rationale here is divergence in both inflation & monetary policy in Norway vs. Sweden with Norges bank set to hike in their Sep 23 mtg, whilst the Riksbank is likely on hold for years to come - with inflation in Sweden continuing to lag their Norwegian neighbors.  Key risks are; obviously Norges Bank pulling at RBNZ & blinking before an anticipated hike, falling inflation & growth in Norway, more hawkish Riksbank & spike in PCI in Sweden, general big risk-off in mkts & in particular energy which would weigh heavy on the NOK. 


     

Recent Works to Keep In Heavy Rotation

  • Peter Garnry, Equity Strategy: Is it time to buy Chinese technology stocks?

    Summary:
    “Our Chinese Consumer & Technology basket is the worst performing basket this year due to the ongoing technology crackdown in China.

    Many investors are asking us whether it is time to buy Chinese technology stocks?

    The short answer is no.

    Chinese technology stocks are currently trading at a discount to US technology stocks for good reasons and as long as this discount persists we think investors should focus on Chinese consumer stocks and get exposure to technology in the US. Finally, we take a look at Facebook and Tencent as both companies are pivotal for technology sentiment in the US and China.”
  • KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate & less effective EU. As well as highlighting China Tech’s underperformance in the 1H21,  vs their Global Counterparts especially in the US.  

-

Start<>End = Gratitude + Integrity + Vision + Tenacity | Process > Outcome | Sizing > Position.

This is The Way

Namaste,
KVP

Dragon Interviews:
Dragon Interviews U-Tube Channel for easier play-ability…

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

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)

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