Macro Dragon: Top of Mind... BRL, RUB, MXN, EEM, XLE, XLI, NKY, ASX-200

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: Top of Mind... BRL, RUB, MXN, EEM, XLE, XLI, NKY, ASX-200

 

Top of Mind…

  • Touched on this wk in the Dragon’s Welcome to WK # 42 - 3Q Earnings, Brexit, EU Council, NZ Elections, US Stimulus?

  • Just a house keeping note folks, for 4Q there are a number of new internal initiatives for our VIPs that KVP is running point on and/or deeply involved, the other side of that skew implies that apart from the Monday Pieces, the daily Macro Dragon’s may be more sporadic.

  • At the end of the day, we have a finite amount of high quality bandwidth with the preference on this side being always for less yet higher quality, than more & lower quality

  • HK out this morning on Typhoon 8 Warning, there is a chance trading could be off for the entire day.

  • Today on the economic data front, really about UK jobs data, German inflation & ZEW survey, as well as US Inflation & Federal Budget Balance.

  • Overnight session continued to see risk-on in US equities, +1.6% 3477 on the S&P, +3.1% 11726 on the Nasdaq-100, yet there was divergence from a cross-asset basis in regards to the equity risk-on theme.

  • Dollar as a whole unchanged, with DXY 93.10 flat as were 10yr treasury futures. Brent & Crude pulled back by c. -3%, given the c. +9-10% pop last wk.

  • Silver & Gold were also a touch on the back food at -0.40% & -0.20% to $1926 & $25.06 – next big catalyst here again is all about the stimulus announcement, failing that we could consolidate or more than likely go back to test $1900 / $1880 on gold & $24.00 on silver.

  • Tactically & Strategically the Dragon being long selective EM FX names such as RUB, MXN, BRL & CLP vs. the USD (granted those folks long EURUSD, may also consider being short EURMXN to potentially dampen port vol & still have a macro overlay theme)...

  • ...the likes of EEM, XLE (2-3x Long on Trump win for potential tactical squeeze), XLI (reverse to short on Trump for potential tactical crash). Nikkei looks interesting top-side & for the reflation global play, as does ASX-200 which is still more than a 1000 points (more than 10%) lower that pre-covid lvls [not many major indices can say that]

  • FTSE-100 & Sterling in general worth keeping on the radar given how underweight the world is on UK assets & of course the latest (& final??) Oct 15 Brexit deadline. Sterling continues to trade well & feels like most folks have forgotten about Brexit, as the combination of a C19 world & US elections sucks up all the oxygen out of the room!

  • Again its not a question of do you want to be long sterling & UK related assets imho (don’t forget FTSE-100 is heavy on commodities), it’s a question of magnitude & construction of your long exposure plus more importantly timing around that. One has to naturally measure that vs. continued C19 world & BoE on negative rates.

     

-

Not Caught Enough of KVP?…

  • From c. 52min in KVP talking on DollarYen on Bloomberg’s Daybreak This will resonate with the 4Q20 piece, where a high conviction structural trade view from KVP’s camp is being short DollarYen, seeing 85 – 95 range by back-end of 2021 & potentially 100 to high 90s by end of 2020. Naturally this gels with the multi-year dollar bearish regime view & also note how strong the North Asia Currencies have been of late, USDCNH, USDKRW, USDTWD

  • Country 1.0 And How to Edit Inequality Out of the Equation with Kay Van-Petersen Could have gone on for days here! :) Bottom line AI, ML & Tech integration is literally the highest probability pathway for a sustainable earth with humans as a species continuing to be part of the eco system

-

Dragon’s Must Reads… #SaxoStrats

  • Podcast Special Edition: Q4 2020 Outlook - The US election & everything gone all K-shaped

    In this special edition podcast, the Saxo Strats team takes you through the key points of our Q4 Outlook, including a particular focus on the US election and what is at stake for global markets over this election and as we peer into 2021. The focus is on portfolio allocation, the risk of a secular shift in inflation to the upside, and the implications of the K-shaped narrative on policy and markets. On the podcast are Saxo CIO Steen Jakobsen, Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.

  • John Hardy dropping a roadmap US Election Primer: The Final Sprint to November 3rd

    We sort through important dates in this final sprint phase of the absurdly long US presidential election cycle. Historically, we have seen significant shifts in the polling in the final weeks leading up to the election. As well, we consider factors that can change the odds between now and Election Day on November 3rd.

  • Saxo’s US Election Cheat Sheet Which cuts into the three potential pathways into the elections, probabilities around them, as well as short & long-term positions across equities, bonds, commodities & currencies.  
 -

 

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

This is the way 

KVP

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 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.