Macro Monday Week 40: Impeachment Investigation Implications... Macro Monday Week 40: Impeachment Investigation Implications... Macro Monday Week 40: Impeachment Investigation Implications...

Macro Monday Week 40: Impeachment Investigation Implications...

Macro 3 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Week ahead is likely going to be focused on the 70 year anniversary celebration of China, as well as golden week holiday start. Key data out of the US from an ISM, PMIs, NFP and AHE perspective. As well as rate decisions out of the RBA and RBI. Wishing everyone an epic and profitable start to the 4Q19.

Macro Monday WK 40: Impeachment Investigation Implications…



A  replay of the call is available HERE

TGIM & Happy Macro Monday everyone, welcome to WK 40 – the end of 3Q = start of 4Q, we are almost there & bear in mind Dec is never a full month. So really just 10wks to take things to the next lever across the  board…

So this week’s focus is likely to be around: Impeachment Storm, China’s 70th Anniversary, Rate decisions out of India & Australia, Final PMIs & of course US ISM / NFP / AHE   

Wishing everyone a healthy, phenomenal, smooth, profitable & bell-curve setting start to the 4Q!




Summary of Prior Week:

  • Geo Politics: Pelosi, could hold back no longer – Dems, formally launched an impeachment investigation of Trump around the calls with Ukraine’s president & potential corruption linked to the Biden family

    Econ: Flash PMIs cont to show us, no respite coming out of the EZ – especially Ger. RBNZ & BoT left rates unchanged as per cons., whilst also in-line with cons we saw 25bp cuts out of the PH & MX
  • FI: Tighter for the wk (again), USTs, Bunds & JGBS at 1.68%, -0.57% & -0.24%
  • FX: DXY’s ascent cont, with highest weekly close since Jul 2017 at over 99.0 & +0.49% for the wk. The almighty dollar seems unstoppable
  • CMD: A week that belonged to the softs for the bulls, whilst the bears capitalized on pullbacks in energy, precious metals as well as iron ore, nickel & aluminum
  • EQ: Generally red across the global, with India being the one solid outperformer, still high off of recent stimulus measures. Peloton IPOed, yet closed down -13% at 25.24 from the 29.00 strike. Meanwhile AB Inbev priced at HKD 27.0 & should start trading today in HK under 1876
  • Vol: Back to back wk with vol tick higher as we do +12.4% to 17.22 on the VIX, interestingly seeing a slight pullback on the MOVE (a bond volatility indicator)


    COT Report: [@Ole_S_Hansen]

  • Back to back increases on USD Net-longs, this now taking into account the FOMC meeting, post a +22% two wks back we continued with a +13% increase to $17.5bn ($15.5bn)
  • The net-shorts continued on the kiwi cross, yet big reversal in yen net-longs -46% to c. 13K contracts, as well as CAD net-longs -77% to c. 5K contracts
  • Going on 3wks of continued exposure on  net-longs on commodities,


Week Ahead

Key Focus:

  • Final PMIs  | US ISM-NFP-AHE | End of 3Q | Impeachment Show | China 70th Anniversary
  • Central Banks (SGT):
  • RBA 0.75% e 1.00%p (1) RBI 4.00% e/p (4)
  • [Yet cuts expected across the repurchase rate & the reverse repo rate from the RBI] 

Fed Speakers (SGT):

  • Evans, Clarida, Bowmin, Barkin, Harker, Quarles, Mester, Kaplan, Rosengren (4), Bostic, Powell, George (7), Kashkari

Other (SGT):

  • Lowe (1) China out for Golden Week (Oct 1 to Oct 8), GER Hol (Thu 3)

Econ Data:

  • US: Chicago PMI, Mfg. PMI 51.0e/p, ISM mfg. 50.4e 49.1p, Serv. PMI 50.9e/p, ISM Non-Mfg. 55.1e 56.4p, ADP, Factory Orders, NFP 140k e 130k p, AHE 3.2%e/p
  • CH: Mfg. PMI 49.6e 49.5p, Non-Mfg. 53.9e 53.8p, Caixin Mfg. PMI 50.2e 50.4p
  • EZ: Mfg. PMI 45.6e/p, GER Mfg. PMI 41.4e/p, Serv. PMI 52.0e/p, GER Serv. PMI 52.5e/p, PPI RS, Flash CPI
  • JP: RS, BoJ Mins, Tankan Index, Mfg. PMI 49.3e 48.9p
  • UK: Final GDP, CA, Mfg. PMI 47.0e 47.4p. Serv. PMI 50.3e 50.6p
  • NZ: Building Consents, Business Confidence., Milk Auction
  • AU: Building Approvals, TB, RS
  • CA: House Prices, GDP, Mfg. PMI 49.1p, TB, Ivey PMI 62.6e 60.6p


Global Macro Reflections | Manifestations: Potential implications of impeachment investigations

No clear near-term market impact (to KVP at least), yes it creates more noise & uncertainty… yet not too surprising given it is Trump

It’s worth noting that Pelosi has been hesitant about the democrats pursuing an impeachment investigation of Trump

Yet, her hand & voice were finally forced last week

We now have increased probability that Trump will get more erratic (more pressure on him) & volatile – this likely increases the probability of:

  • Trump running a Tariffs Campaign for his 2020 Election Strategy
    • Trump is not likely to seek a lasting deal with China. With a ‘Tariff Man’ & a ‘strong patriotic “USA” image’ he will likely control more of the political airwaves & headlines


  • There will be an increased likelihood of military conflict abroad…
    • Depending on how under pressure he gets, & how much focus he needs to divert from the domestic & election agenda, as well as how the underlying US economy is doing in early 2020
    • It worth noting very much to Trump’s credit, that he is a lot more reticent about getting the US even more entangled in foreign conflicts


  • The impeachment investigation, whilst potentially catapulting Joe Biden back as the sole real democratic nominee, will suck the air out of the room overall on the Dems 2020 campaign
    • i.e. one more big distraction & Trump gets way more clicks than “sleepy joe”


  • This likely averts what would have been a potential -20% to -30% pullback in US Equities if there was a chance of Warren or Sanders sitting in the White House
    • Biden is considered way more pro-business than MMT advocates Sander & Warren. It should be noted that Warren has been climbing the polls of late


  • This new “witch hunt” as Trump calls it, is only going to motivate & empower his base more. At the end of the day, it’s the most motivated electoral base that gets out there to vote. And this likely ups the ante on the motivation behind Trumps’ base. The key risk to the Dems is that Biden’s base may not be as motivated as Warren’s or Sanders’


  • An impeachment investigation & proceedings will take months, & in the event that Trump is found guilty of impeachment, the republicans control the senate (53 / 100) – so they could sweep it under the rug & choose to do nothing. This is a big part of the reason why a lot of the democrats have been so reluctant to go down this path
    • You need 2/3 majority in the Senate to be convicted on the grounds of impeachment
    • Just to give you context of how rare this is, there has only been three previous instances of US presidents coming under impeachment proceedings:

     Andrew Johnson who was impeached in 1868, Richard Nixon who resigned during the process & Bill Clinton (the original Teflon Don) in 1998 who was acquitted by the, then Democrat-controlled Senate.

  • News flows from this will be Trump, Trump, Trump, BidenTrump, Trump, Trump, Biden


  • Still a long way to the Mid Jul 2020, democratic nomination for their presidential candidate. One flipside of all this to be wary of, if Hunter Biden is found to be clearly linked to corruption (which we know was rampant in the previous Ukrainian regime) it could force Joe Biden out of the race, in which case Warren takes nomination & US EQ markets tank


Greater China Focus  – Focus again on Oct 1st 70th National Day & Summary of Recent Measures Taken by China over last few quarters. Also focuses on recent rhetoric by US officials to potentially restrict CH companies from listing in the US. US listed Chinese company have been under pressure lately

Chartography & Price Action

  • We take a look at the DXY making ever new highs, as we had our first weekly close above 99.00 since mid-2017
  • At the same time the pullback bond yields in the last two wks has not been fully reflected in precious metals
  • Meanwhile despite the news flow & concerns on global growth decelerating, almost all major global equity indices are up in double digits YTD in USD terms!!!

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 (
- Full 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 is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited 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

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

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

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.