Macro Dragon: WK # 46 = Joe Biden = 46th POTUS… Macro Dragon: WK # 46 = Joe Biden = 46th POTUS… Macro Dragon: WK # 46 = Joe Biden = 46th POTUS…

Macro Dragon: WK # 46 = Joe Biden = 46th POTUS…

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: WK # 46 = Joe Biden = 46th POTUS… 

 

Top of Mind…

  • Happy Monday Folks & Welcome to WK # 46

  • Hope the Macro Ladies & Gents got a much deserved restful wkd – after a wk, that was the epitome of needing to make decisions with dynamic, conflicting & never perfect information… the ability to navigate that is the paragon of being a consistently profitable money manager over time.

  • On the Dragon we got the Blue Tsunami Thesis dead wrong – yet, we moved on, trusting with the process (default MO), being as egoless as one can on the individual outcomes... & the process paid off on the correct pathway of price action.

    Reposting a segment from that Thu’s piece. Macro Dragon: Biden = 264, Trump = 214... POTUS = 270, + Fed Thu Watch, as I am sure “what’s likely next?” is the question on a lot of people’s minds.

    So from the Dragon’s perspective what can we say with a high degree of probability if the outcome is a Biden Victory (post contention) & Split Congress?

    • Geopolitics will be less volatile, more stable & constructive. We’ll likely see a big US pivot back to RoW, as well as firmer rules of engagement with China. Net-Net big positive for EM & in particular Asia - & in particular there, North Asia – only part of the world that is likely to keep growing unhindered from Covid-19 resurgence in 4Q, vs say Europe or the US

    • Energy likely to be an interesting space, as Biden Admin should still be able to enact quite a few environmental rules & regulations that curb future shale supply by raising environmental & enforcement standards, as well as potentially make things more optimal for the clean tech space

    • Obviously the whole $7trn Green Tech Infra dream, is dead in the water if we get to early Jan Senate outcome & Reps still in control. For now the Senate is tied at 48 / 48, with 4 seats left (North Carolina & Michigan – leaning towards each party. And two seats in Georgia leaning towards Reps).

    • The weight of any action will again move back to the Fed & whoever Biden appoints as Treasury. The delta of YCC & negative rates coming sooner & at greater magnitude has increased. This is why to KVP being short US duration from a medium to long-term perspective is suicide.

    • Either way, once things settle (post contention bubble) – relief rally for Equities, yay no taxes if Dems don’t control congress & also just mkt knows who they are dealing with. Plus big tech continue to be monopolies at least until 2022 or 2024. And we will see vol compression return, as well as the USD grind lower (KVP loving AUD, NZD, NOK, MXN, BRL, RUB, CAD, GBP to the upside for the Strategic book, yet think also near-term we could see a big pop).

    • Infra/Industrials & cyclicals in general should see quite a bit of shine come off – as should clean tech – before we get a better picture of what a Biden administration can still do there with a split congress. I.e. The US needs a relief-stability package first, before we can even talk infra. Clarity here may not fully come through until Jan.
  • Bitcoin: Worth noting we flagged the super critical technical break up through $14K last Thu & this Asia Mon morning we are sitting at c. $15,500, after getting close to $16,000 last wk. A 2nd consecutive weekly close above $14K, should open us up for the ATH $20K – get your lambo license plates ready folks.

  • Economics: Jolts, inflation & PPI data out of the US. EZ gets flash GDP, jobs data, trade balance & ZEW surveys. China gets inflation, PPI, Money Supply & New Loans. UK will get jobs data, initial quarter GDP 15.6% e vs. -19.8% p

  • Central Banks: RBNZ 0.25%e/p, MX 4.00%e 4.25%p

    Lagarde speaking Mon Nov 9 @ 1725 SGT & Fri Nov 13 @ 00:45 SGT

    Bailey set to speak 4x this wk: Mon @ 1835, Thu @ 1600, Fri @ 00:45 & Sat @ 1200 SGT

  • Fed Speak: Powell on Fri Nov 13 @ 00:45 SGT, earlier in the wk we will also hear from Mester, Kaplan, Quarles & Brainard.

  • Link to transcript from last wk’s Fed Meeting (yes, the Fed met on Thu Nov 5)

  • Holidays: Bank Holiday in the US & FR on Wed Nov 11.

  • Other: Don’t forget, Brexit negotiations are still on going. Folks are going to underestimate the move lower in the USD, volatility & the move higher in risk-assets (especially EM assets & Crypto).

    Plus folks will also underestimate the ability of a new Biden Admin to work with Rich Mitch – KVP can see a scenario where the dems surrender/dilute their calls for taxes & regulations, for say +$3-4trillion in fiscal packaging.

 

-

Start-to-End = Gratitude + Integrity + Vision + Tenacity | Process > Outcome | Sizing > Idea.

This is the way 

KVP

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 Markets
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 Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML 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 Markets 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