Macro Dragon: SNOW's +112% debut, Fed In-line + Japan's "Sugar" Macro Dragon: SNOW's +112% debut, Fed In-line + Japan's "Sugar" Macro Dragon: SNOW's +112% debut, Fed In-line + Japan's "Sugar"

Macro Dragon: SNOW's +112% debut, Fed In-line + Japan's "Sugar"

Macro 4 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.

(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

Macro Dragon: SNOW +112% debut, Fed In-line, + Japan's "Sugar" 


Top of Mind…

  • Alright quite a few things on this Asia Thu morning….


  • So we got the Fed o/n, which in addition to the press conference also included updates on economic projections plus as we flagged as the base case in yest’s Dragon:Fed - No more TELL Powell, time for some SHOW & SNOW... the upgrade on the dot plots to now not rates hikes being expected through 2023 (that 3yrs & 1.5 quarters to be exact folks)

  • It seemed to have been perfectly priced in by the bond market, given the sharply unchanged moves when the statement dropped

  • Here is the link to the Fed Press Conference kicks of c. 27:16min in… somethings that stood out to KVP:

    • Powell flagged over the last 60days, the economy has done much better than expected. Its worth noting big upgrade in 2020 GDP to -3.7% from -6.5%, yet they downgrade 2021 to 4% (5%) & 2022 to 3% (3.5%).

    • He mentioned also being surprise at how well the economy had held up, despite no new deal coming out of congress. And noted a concern that some of the money that was potentially saved by Americans who got support in the first package, may now be spent & we could see that in things like evictions & jobs data.

    • Their assumptions around growth (& hence inflation) are also a function of fiscal spending expectations, this is likely to be the biggest lever in determining the steps, as well as delta in Fed strategy going forward. Bear in mind, KVP would expect a Harris, I mean Biden Administration to do way more spending than a Trump’s 2nd term, especially if we get a blue wave.

    • It makes sense that there are no inflation expectations going back to 2% until after 2023 – think market would have been confused otherwise. Also is it just KVP, or the more we here about 2% from the Fed, the more we think about the BoJ & Abenomics?

    • Really does not look like we can expect much from the Fed for 2020, especially with elections in Nov 3. Markets (& in particular duration) would really have to crap themselves (yes technical term) for the Fed to get back on their Mar & Apr horses.

    • Really seems to be a consensus globally at the moment, on much better than expected economic bounce – which is putting YCC on the backburner for the Fed… this may be getting pushed back into 2021 or the in a glass box labelled “break in case of more insanity in keeping this synthetic markets & game going”.

    • We only have one last scheduled Fed meeting for 2020 & its on Thu Nov 5 (US time), right after the Tue Nov 3 elections (US time).

  • Our Chief Economist, Christopher Dembik also weighs in here: FOMC Summary: A first look at the required conditions to raising rates

  • Summary:The FOMC meeting confirmed without any surprise that accommodative monetary policy will remain in place for the coming years, with no interest rate hike in sight through 2023 given the current economic uncertainty. The new Fed Fund Dots and economic projections, with a first look at 2023, have been released. What was of interest for investors is that the Federal Reserve has moved closer towards explicitly tying future hikes with three objective-based metrics - in this case maximum employment as defined by the FOMC, inflation at 2% and on track to moderately exceed 2% for some time.

SNOW $253.93, +112%, Mkt Cap $70.4bn, pure play in the cloud computing

  • Well we went from red hot to searing supernova white, as the shares priced at $120 (way above the initial $75-85 range, as well as the revised $100-110 range), yet closed up +112% at c. $254, giving the new listed company a mkt cap of $70bn. Range on the day was 319.00 to 231.11.
  • Could this be like Beyond Meat [BYND], which post the first day c. +170% pop, never looked back? Hard to say. What is easy to say though, is that Amazon, Alphabet (Google) & Alibaba shareholders will be pushing for a spin-off of their in-house cloud computing businesses.

  • Can see the last two doing it, for the first – Bezos has to weigh that option, vs. being able to keep a long-term strategic campaign at Amazon… i.e. AWS is so profitable, they can continue to play the retail platform game in a way that no one else can. Spin that out & they may lose that flexibility & cushion.

MISC: Econ Data, Japan’s Suga & Aussie Jobs Data

  • Econ Data: Looks like we are getting some really good econ data around the globe. We had better than expected Kiwi GDP data this morning at -12.4%a -12.8%e for 2Q, plus a revision on 1Q figures.
  • We also had a big beat on ZEW numbers earlier this wk out of Germany, with big implications for the rest of the EU (watch Sweden!). Peter touches on it further here: Strong ZEW number suggests significant upside in European equities

  • Lets see how Aussie data look later this Asia Thu Morning…

  • Suga oh honey honey: So this was a consensus confirmation, as no one was expecting an upset on Abe’s designated successor, Yoshihide Suga. Real question on LDP & future longevity of Japan's PMs will come to light in 2021.

  • Abe stepping down is an epic deal though, one that KVP will cover in our 4Q outlook (small teaser, the structural highs are in, in __________ . Guess you’ll have to wait for the quarterly).


Start-to-End = Gratitude + Integrity + Vision + Tenacity. Process > Outcome. Sizing > Idea.

This is the way 



The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (
- Full disclaimer (

Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region


Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.