Summary: Morning APAC Global Macro & Cross-Asset Snapshot
(Note that these are solely the views & opinions of KVP, they do not constitute any trade or investment recommendations of any kind.)
To see this wk’s Macro Monday click here
APAC Global Macro Morning Brief
Happy Macro Thu 7 Nov 2019: Master of Ceremonies…
KVP always thought MC gave one viewpoint to a title, a Master of Ceremonies definitely ups the ante…
I.e. if you are an MC, your like… no biggie… If you are a Master of Ceremonies… your like… this is the Olympics! Tokyo 2020 Baby
Letters, numbers, words & phrases have the potential for great power… use them wisely. Very few people appreciate this, someone who did & still does, is Trump
Speaking of numbers, seeing a lot more chatter on the significance of USDCNH 7.00 handle break lower from earlier this wk. This morning Asia Thu we are sitting at 7.0125, after a +0.15% reversal o/n… this was post the big -0.43% move lower on Tues
The paradox is if the yuan is set to strengthen due to a potential solid & wrapped up trade deal (i.e. tariffs are taken off), it does so when we are still seeing continued signs of a slowdown in China. I.e. the stronger currency is not going to do them any favors
Still in a global world of investing & trade, almost everything comes with its set of pros & cons. There is quite a bit of divergence among analysts on the street on the direction of the currency, with a median forecast conducted by Bloomberg showing analysts at 7.15 by year end
That likely signals that most people continue to be skeptical about a deal. Think a successful deal (with tariffs eliminated – this is a key concern that Beijing has been adamant about from the very beginning) likely takes USDCNH to the 6.80 – 6.90 range, where a deal break would get us back to testing the c. 7.20 lvls we got close to previously
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When we’re right, we are right. So those that attended the exclusive vip lunch that we host in Singapore will recall that we were bears to infinity on Uber just prior to its IPO debut. The stock has continues to make new lows, as we approach the end of its lock-up period
The stock closed yest at $26.94, that’s -40% from its IPO strike of $45. Lyft has pretty much fared the same down c. -40% to 42.92, from its IPO strike of $72. Zero view from KVP on the names, think from a business model perspective they need to do possibly one of two things – or hybrid of the two
1. Raise prices – which will crush revenue, lead to less drivers, yet finally to profitability
2. Go Autonomous as soon as possible – talk about consistent 5-star ratings…
3. Combination of the two…
Lastly KVP’s rocks Under Armour boxers & gym bag, but not their potential dodgy accounting – this is one to keep on the radar for the value players… end of the day, its still a global & uniquely placed brand…
Not sure at what point the name has value, yet we are c. -33% from the Jul highs with a good portion of that happening over the last few trading days, worth putting on the investigation list. Names & brands like this are always potential take-over targets
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On the trade noise, looks like things may be delayed… and venues are being considered ruled out & then considered again. Again a lot of moving parts, but this looks like a Dec play at best… Trump = Santa Rally?
for those attending the SG conference this afternoon, rumor has it there is going to be one hell of speaker line-up, awesome panel and a world-class master of ceremonies…
Have an epic day everyone, do something extraordinary for someone. Like drop a massive tip to your friendly coffee maker… plus ask them to give a free coffee/tea to someone later in the day – trust KVP it feels great, he loves free coffee hats off to One-Shot
Namaste
-KVP
Today:
Other:
The market is trying to get back to the pre-Covid and pre-war times, but that model is broken. A new dawn is here and the financial world needs to adapt.
Steen Jakobsen,
Chief Investment Officer
A political switch in China towards less tough control of its people and companies may kick things back into gear.
Redmond Wong,
Market Strategist
While the economic situation in Europe may not be as bad as feared, there's still a plethora of things to fix.
Chris Dembik,
Head of Macroeconomic Research
As the world turns increasingly bipolar, equity markets face harsh times as they transition into the new reality.
Peter Garnry,
Head of Equity Strategy
New alliances and collaborations outside of China may lead to prosperous times in Asia.
Charu Chanana,
Market Strategist
For years, it was thought that the balanced portfolio was a thing of the past. But recent developments may have changed that.
Peter Siks,
Investment Coach
Following a dramatic and volatile 2022 with good returns, a lot of this year's commodity performance may be driven by Chinese politics.
Ole S. Hansen,
Head of Commodity Strategy
2023 could be a tough year for currencies but EUR and JPY may have some upside.
John J. Hardy,
Head of FX Strategy
The commodity-heavy Australian market may have a good start to 2023, as the Chinese focus on growth signals demand for Aussie resources.
Jessica Amir,
Market Strategist
From a near-perfect environment for speculative assets before 2022 to the opposite, crypto faces fundamental challenges.
Mads Eberhardt,
Cryptocurrency Analyst
