Macro Dragon: Window Dressing Deal Signing Day

Macro 1 minute to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Daily Cross-Asset Global Views


(Note that these are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations.)

 

2020-Jan-15

Macro Dragon: Window Dressing Deal Signing Day 


Before we get into it, for those that are back – or on the way back in – from what was hopefully a restful year-end holiday break, Happy New Years!

Let me sincerely (hand on liver) wish you, your families & teams the best of 2020. May your health, vigor & experiences be excellent & full of fun + laughter. May you continue to grow & develop yourself. May you be awash in gratitude & contribution plus fall [tail] backward into more money than Bezos.

We’ll be shaking things up from KVP’s side, so expect a lot more trade views going forward, as well as 20 long-term trades views for 2020 – which KVP will do a special piece & mini-series on.

Ok let’s get after it…


The Overnight Noise…

May sound like a quip, but generally that exactly what most things are on a day to day  –noise.

Hence in a lot of KVP’s discussion with clients & peers, it almost always leads to him pointing out, that if you really want edge you need to get farther from today on your trade/investment horizon… paradox is of course, everyone’s mandate is moving ever closer to mark to market on a micro second to micro second horizon.

End of the day, do you want to fish in crowded waters or uncrowded waters. May seem straight forward, yet guess where most of the capital allocation is on the HF/prop side? That’s right crowded waters.

Sometimes to play the game you want to play, you have to play a sub-game. Think of it as an entrance or proof to the universe that you are deserving to play the game you want to play. Other times you just have to break the rules, have so much faith & self-believe that it hurts & just pave your own pioneering way.

So the rhetoric is that stocks were off in the US o/n due to the fact that the next round of tariff reviews from the US on China are going to be post the US election – i.e. 10months for the micro second ground is like 10 light years (not quite mathematically but you get the gram).


So looks like risk-off star to the Asia morning.

Macro Dragaon is not picking up, what the rhetoric is putting down – its worth noting JPM & Citi crushed it erns wise overnight. We should be getting erns reports from BoA, GS & MS within the next 24-48hrs.

We already touched on thoughts around Phase One signing on a special Sat piece - caveat is have a tactical contingency playbook when (not if) we get a deal break later in the year. 

  

The Monitor: DollarYen & Volcanoes Check In…


We covered the fact that we seem to be in the midst of trying to break higher in DollarYen yest: DollarYen Technicals Screaming “Buy, Buy, Buy, Buy…”  – as well as the accompanying skews if you were skeptical of this, or thought that 112 – 114 are in the making.

The cross still sitting at these crucial 110 lvls. It will be interesting to see the weekly close & how the rest of Jan plays out. Meanwhile the swiss franc continues to do the opposite & strengthen against the USD – this seems more linked to local factors, than general risk-on/off barometers that the currency has been known to operate under.

Meanwhile the volcano eruption just 40miles south of the 30m people of greater Manila, is still in alert zone 4 of 5 – where one can expect eruptions from a few hours to a few days. We covered this on Mon with the view that we could see a weaker USDPHP from Fri’s 50.57.

So far that has not worked out (actually strengthened on Mon), yet interestingly enough, the peso weakened o/n as USDPHP popped up +0.38% to 50.605 – Which technically puts the original trade view ITM (Ahem! On a spot basis at least
😊). Still early days to be fair.

Still we are sitting at one year low lvls on USDPHP. It worth noting that whilst the alert signal has not been altered there are signs of some people around the area moving back to check on things, signs of things going back to “normal” – which to KVP is just incredible when there is talks of bubbling lava.

Yet if your entire net worth & lively hood is in the affected area, what else can you do?

Few of us really appreciate the level of optionality & ‘good problems’ that we have in our lives.

Gratitude is the gateway to success.


-

Good luck out there today & for the rest of the wk ahead

Wishing everyone a great, profitable start to the year. Best of luck in 2020, may it be your most magnificent yet  
 

Namaste,

-KVP



**

On The Radar Today:

(Times would be SGT)

  • JP: Kuroda @ 08:30, M2 Money Stock, Machine Tool Orders
  • US: PPI, Empire State Mfg. Index, Crude Oil Inventories

    •  FOMC’s Harker & Kaplan at 00:00 & 01:00

     

  • EZ: Industrial Production, Trade Balance
  • UK: Inflation 1.5%e/p CORE 1.7%e/p, House Prices   

Anchor Pieces #SaxoStrats:

Quarterly Outlook 2024 Q4

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • 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

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Head of FX Strategy

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Head of FX Strategy

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer

The Saxo 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 is not intended to and does not change or expand on this. 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 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 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 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 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 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-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.