Global Macro APAC Morning Brief

TGIF & Happy Macro Fri 27 Sep 2019

APAC Global Macro Morning Call

O/N, Levels & Thoughts:

Nothing new & material standing out to me overnight… expected steam around the whistle blower & the dem's move to start an impeachment investigation 

Asset Class Overview:

Continuing to see the grind up in the US Dollar Continue, DXY above 99 into the end of the wk is technically very bullish – it could mark the first wkly close on the DXY since May 2017, giving Trump & the Fed one more headache into the wkd

Spot gold 1505 was basically flat o/n, yet spot Silver 17.82 continued on the retreat with a -0.49% move. Brent Crude revered it previous day’s move with a +0.34% climb to 62.60. Copper 257.75 & Palladium 1643, went separate ways at -1.35% & +1.93% respectively

US equities closed down, despite a positive close across the board from their European cousins. We have the Dax up +0.44% at 12288 whilst the S&P 2977 & the Nasdaq100, 7772 were down -0.24% & -0.40%. VIX whilst up c. +14% over the last 4 trading days, was up +0.69% o/n to 16.07

Bond yields were a touch tighter, yet we are not too far off of the ranges we have been: USTs 1.69%, Bunds -58bp & JGBs -25bp

Central Banks:

As per consensus views, we saw 25bp cuts o/n from central banks out of Mexico & the Philippines, bringing those respecting rates to 7.75% & 4.00%

ECON:

The EZ saw an expansion in Money Supply at 5.7%a 5.1%e, private loans meanwhile were in-line at 3.4%. US final 2Q GDP reading was also in-line at 2.0%

Wholesale inventories missed climbed to 0.4%a vs. 0.1%e & the unemployment claims at 213K were not far off from the 210k that was expected

Today:

• JP: Tokyo CORE CPI
• EZ: German Import Prices, French Consumer Spending & Flash CPI
• US: Durable Goods, Personal Spending, Personal Income, CORE PCE Price Index, UoM
  • Plus FOMC member Quarles @ 20:30 (SGT/HKT)

Next Week:

• Key focus will be all about Oct 1^st, China’s 70yr National anniversary. They will be looking to flex their muscle. Key thing is will we potentially see ripples out of trump (tariffs on Oct 1^st) and/or renewed escalation from the protest movement in Hong Kong?

• China will be out for Golden Week from Tue Oct 1^st & will not be back in until Tue Oct 8^th, so things will quiet down in North Asia

• RBA rate decision on Tue Oct 1^st – currently market is expecting them to remain on hold at 1.0%

• We also have the RBI due next wk, hard to know which way they will do given the massive stimulus efforts from the government last Friday – yet one thing for sure is, they likely have a dovish skew from a policy perspective to be support of the governments efforts

• Data wise it will be all about Final PMIs, US ISM / NFP / AHE, Aussie Retail Sales & Japan’s Tankan Survey, as well as UK’s GDP

Other:

• To catch this wk’s Macro Monday Click here…

   

• Don’t forget to bookmark & check our Daily SaxoStrats calls from the European morning session c. 09:00 CET