Global Macro Strategist
Summary: Morning APAC Global Macro & Cross-Asset Snapshot
Happy Macro Thus 26 Sep 2019
APAC Global Macro Morning Call
O/N, Levels & Thoughts:
So it looks like the US markets could not care about the impeachment investigation launch by the democrats, as equities jumped yesterday alongside the release of the Trump/Zelensky transcript of their call.
We touched on KVP’s initial thoughts on what is going to be a massive campaign by the Democrats & potential strategic blunder, on yesterday’s Macro brief.
Trump talked up a trade agreement with China, which the markets potentially bought – worth bearing in mind, we are also bouncing back from three days of pullbacks.
The S&P closed up to 2985 +0.62% whilst the Nasdaq100 doubled that with a +1.21% lift to 7804. The US dollar continues be bid & the DXY closed at 99.04 continuing to make newer highs for the year.
Yields also saw a lift higher, as we saw UST get to 1.74%, the 2/10s is sitting at around +5bp. Bunds & JGBs are at c. -58bp & -26bp respectively.
Gold & silver had a bearish session sat -1.8% & -3.8% to 1506 & 17.97. Brent Crude closed at 62.39 down -1.1% for the session, US Crude inventories surprised to the upside +2.4m a vs. -0.3m e
We also had central bank rate decisions out of New Zealand & the Thailand, where both boards left rates unchanged at 1.00% & 1.50%, in-line with expectations.
Today:
Other:
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
