Macro Dragon: Who wants to be a millionaire?
Summary: Macro Dragon = Daily Cross-Asset + Global Views
Macro Dragon: Who wants to be a millionaire?
Before we get into it, for those that are back – or on the way back in – from what was hopefully a restful year-end holiday break, Happy New Years!
Let me sincerely (hand on liver) wish you, your families & teams the best of 2020. May your health, vigor & experiences be excellent & full of fun + laughter. May you continue to grow & develop yourself. May you be awash in gratitude & contribution plus fall [tail] backward into more money than Bezos.
We’ll be shaking things up from KVP’s side, so expect a lot more trade views going forward, as well as 20 long-term trades views for 2020 – which KVP will do a special piece & mini-series on.
Ok let’s get after it…
So we did a great piece & detailed thought piece yest on KVP’s take on the US / Iran escalation following the drone strike assassination of probably the de facto #2 most powerful person in Iran, the revered (& reviled) General Qassem. It been quite well received & as in all things, tried to take all parties into account for a balanced view.
One can look at the framework, points & risks associated with the view that KVP has that this is likely a tactical buy the dip situation in equities & fade the risk-off moves i.e. gold higher, yields lower, yen stronger, oil higher, vol higher.
Early days, but as we slowly get more people back on their desks this & next week – the ‘true’ price action & participation will dictate the lay of the land. This also has to be measured by whatever steps Iran takes & based on those steps, potential counter measures by the US. And as we flagged in the risks to the view – nothing else landing on the menu, a la Rocket Man or Putin.
We have already seen the Iranians say that in regards to Nucler development, all systems are a go – this should come as no real surprise, Trump sunk that boat when he broke the original US/EU/Iranian Nuclear Deal that his predecessor Obama had put together.
A state backed Iranian TV has run with one dollar being raised for the 80m Iranians to facilitate a contract for the assassination of Trump – so basically a $80m bounty.
Whilst this is not (yet?) an official Iranian government statement (yet obviously given the green light), it does show how this one unwritten rule of international diplomacy - no targeting of leaders by sovereign countries – could potentially be written off on the global political sphere.
Anyhow, S&P closed up +0.35% to 3246, oil is off its recent highs with Brent closing at 68.91 +0.45%, after getting as high as 70.74. Gold was +0.87% to 1565 after touching 1588! And this Tue Asia morning we got DollarYen heading towards 108.50, from 108.40, after being as low as 107.77 early yest morning.
Pretty much a sea of green on the Dec Final Service PMIs…
EZ beat 52.8a 52.4e, German retail sales also came in at +2.1%a +1.1%e & upward rev. to -1.3%r
UK beat 50.0a 49.1e
US beat 52.8a 52.2e
Key part will obviously be US ISM Non-Mfg. due out today, especially as last wk’s Mfg. was a big miss with 47.2a 49.0e 48.1p (A miss & not trending the right direction, sub 50 is contracting & we are into winter season)
Have a great, profitable start to the year everyone. Best of luck in 2020, may it be your best yet.
On The Radar Today:
It’s really all about US ISM Non-Mfg today…
- EZ: Flash CPI 1.3%e 1.0%p, CORE 1.3%e/p, Retail Sales
- NZ: Milk Auction
- CA: Ivey PMI 60.2e 60.0p, Trade Balance
- US: ISM Non-Mfg. 54.5e 53.9p, Trade Balance, Factory Orders
What We Are Reading From SaxoStrats:
- Jakobsen & SaxoStrats team with our 2020: Outrageous Predictions
- Ole on initial cut on the conflict: Middle East tensions drive oil & gold higher
- Peter-G on equities in the new year: What to expect in 2020?
- Eleanor’s latest on China: Patchy Activity Keeps Policy Makers in Easing Mode
- Hardy latest FX Breakout Monitor: Geopolitical concerns washing over currencies
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.