APAC Global Macro Morning Brief – Happy Macro Tue 3 Dec 2019: Is this really risk-off, or a speed bump during Santa Rally?

Macro 1 minute to read

Summary:  Morning APAC Global Macro & Cross-Asset Snapshot

(Note that these are solely the views & opinions, they do not constitute any trade or investment advice of any kind.)

To see this wk’s Macro Monday click here

APAC Global Macro Morning Brief


Happy Macro Tue 3 Dec 2019: Is this really risk-off, or a speed bump during Santa Rally?

So KVP turned tactically bearish on Thu Asia morning, post Trump signing the HK bill – as we awaited a response from China. Which to be fair, if this is it… it’s a bit of a yawn… looks like some NGOs will be under sanctions & US Warships cannot park in HK… not forceful measures imho

When the news came out, the bullish moves that we initially saw during the day were broadly unchecked, i.e. equities were still well bid as Europe got in, bond yields had big moves with UST getting to 1.8570 before reversing to 1.8189 – above the key pivotal point of 1.80%... this was post a c. 1.77 close last wk…

Gold & silver still closed down, yet off the initial lows of the session yest.

So is this really the start of risk-off or this a speed bump during the Santa Rally? As always… very hard to know… we do know momentum is to the upside & if this is the only response coming out of Beijing, then we are likely to lift up further from here – as it likely means that Phase One is still on the table

Now if Beijing were to top this “Symbolic” move with some more potency, then we could get Santa losing a limb or two

Still lets see, as we start Asia Tues mrn, we are dwn c. -14bp to -22bp on US equity futures, ASX futures are down -1.7% (as Asia catches up with the positive close yest.). KVP would expect gold & silver to be a bit more bid today as they closed down c. -0.11% & -0.69%

Oil also had a rollercoaster session, after Friday sell-off, we initially rallied hard on Monday, before reversing & closing lower on Brent 60.87 -2.5%. Yet WTI which was dwn more than -5% on Fri, still mnged to hold onto gains for a +1.43% lift

Still interesting to see DollarYen already poking it head back above 109 this Tue Asia Mrn, after a -0.47% to 108.98 o/n

Look out for the RBA rate decision later today, which is likely going to be a wash

The market is expecting rates to be on hold, yet the risk is to the downside for a surprise cut… with that said, there is a lot of expectations in the market, so we could get a bid AUDUSD 0.6819 +0.83% o/n, if they are not as dovish in their statement as expected


Econ Data O/N:

Pretty big misses in the key Aussie building approvals -8.1%a -1.0%e 7.2%p & Company Operating Profits -0.8%a 1.0%e 4.8%r

We then continued to get the mfg. PMI beats - post the big beats that we had gotten out of China over weekend – as Japan came in at 48.9a 48.6e/p. China Caixin Mfg. PMI beat at 51.8a 51.5e 51.7p

Then GER mfg. rose for 2nd month at 44.1a 43.8e, whilst overall EZ mfg. came in stronger at 46.9a 46.6e. UK figures also had a bounce on the final (had missed on flash) at 48.9a 48.3e

Then the focus yesterday was the US ISM manufacturing miss at 48.1a 49.2e 48.3p. This likely makes the ISM Non-Manufacturing numbers due on Weds, that more key – especially as the service economy of the US is +70% of the economy

Interesting thing is we continue to see this divergence between US ISM mfg. & Markit Mfg., with the latter beating at 52.6a 52.2e.

Lets see how the services data come out tomorrow


Wishing everyone a brilliant day ahead




  • JP: Monetary Base Y/Y, 10yr bond auction
  • NZ: Milk auction
  • AU: RBA rate decision, AU Current Account
  • UK: Construction PMI, 10yr bond auction, BRC Retail Sales Monitor
  • US: Wards Total Vehicle Sales
  • EZ: PPI, French Gov. Budget Balance, Spanish Unemployment Change



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