Global Macro Strategist
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
So the US gets fully back in today, post Monday’s Veterans day. Overnight sessions was dominated by risk-off sentiment, which was likely a combination of profit taking from last wk, US/CH trade jitters & escalations on the streets of HK
With all that said, US equity futures bounced from the lows, c. -0.50% at one point before finishing -0.10% for the sessions – neither here nor there
Early days this Tues Asia Morning but we are a touch lower at -0.10% on US equity futures, and up to -0.35% on ASX futures, however the Nikkei & Hang Seng are looking up at +0.26% & +0.70% - the latter, likely a technical bounce after pulling back -2.6% yesterday
And just for context, people were being sent home from work across businesses in HK for their safety – so going c. + 5months of protests, the level of conflict is increasing. Its tough to see things changing for the better anytime soon
At the end of the day, this is a structural social imbalance problem, a massive concentration of wealth in the hands of the few – which is by itself is not necessarily bad – yet at the expense of where the many, have little to no options available to them from a housing, working & living perspective – which is obviously unacceptable for a long-term functioning society
The extradition bill, was just the proverbial straw on the camel’s back on what has been brewing for years
And the fascinating (& sad… yet perhaps long-term good) thing is we are seeing this across the globe, Trump, Brexit, Argentina, Chile, Europe… not trying to say all these places are the same, nor justifying violence by any means... yet its this breaking down of the "social contract" – where its quite clear that whilst there was a lot of growth & low fruit in the system, policy makers & officials could coast along, yet it’s a very different world we live in today
The countries & societies that will thrive, will be those that will be proactive on these structural challenges
As very successful & wealthy individual once told me, what’s the point of being rich if you need an armoured car to take you from one heavily guarded location to another heavily guarded location - you may as well live in a jail
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New overnight that Nigel Farage will focus on labor instead of Tories (& not contest seats in the election for the Brexit Party), puts some fuel in cable's rockets, as we jumped +0.63% to 1.2855. To be honest these are likely crosses that see a lot more sterling strength.
Have a brilliant day & watch out for FOMC’s Clarida today 18:30 SGT (05:30 ET) as he may give some hints on Powell’s testimony on the economy later this wk
Namaste
-KVP
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.
