Saxo News & Research by Kay Van-Petersenhttp://www.home.saxo/Saxo News & Research by Kay Van-Petersenen-MenaSaxo Group 2018 ©Michael McKennaSaxo Grouphttp://www.home.saxo/60{306BA7A0-BB44-41E4-9845-4A51CD7C3A6A}https://www.home.saxo/en-mena/content/articles/macro/md-fri-5-nov-2021-05112021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon: Equities Divergence, Technical Check in on the divergence on AirBnB [ABNB], Compass Pathways [CMPS] & Beyond Meat [BYND]<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon: Technical Check-in on the Equities Divergences on AirBnB [ABNB], Compass Pathways [CMPS] &amp; Beyond Meat [BYND]</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li><span>As KVP gets back in the game, its been flagged by our world class Global Sales Trading Team - that we need more equity focus pieces for our clients... so we are just gonna check into three names that we've covered on the Macro Dragon before<br /> <br /> </span></li> <li><span>As always, be wary of any equity analyst talking about equites, let alone the Macro Dude talking about equities... :)<br /> <br /> </span></li> <li><span>Let&rsquo;s start with the underperformer, BYND &ndash; which the Dragon has been covering for a whilst, since it actually listed. The Macro Skew on this was covered in Aug 2020; <a href="https://www.home.saxo/en-sg/content/articles/equities/beyond-meat-04082020">Erns Watch: Beyond Meat, Alternative Protein Theme &amp; Macro Sins</a> - &nbsp;which touched on the Alternative Protein Space from a Meta Perspective.<br /> <br /> </span></li> <li><span>KVP still has to catch-up with the latest fundamentals &ndash; previous quarter saw them continuing to invest in R&amp;D &amp; rebooting their European strategy, shifting from a partnership to driving it themselves. Next scheduled earnings date is after market on the Nov 10<sup>th<br /> <br /> </sup></span></li> <li><span>The chart &amp; stock price has been ugly for the bulls &amp; a delight for the bears &ndash; the 1Q spike was the GameStop/WSB/SME squeeze, followed by a similar smaller wave in the end of 2Q.<br /> <br /> <img alt="BYND - 6m chart" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bynd---6m-chart.svg" /><br /> <br /> </span></li> <li><span>Low for the year is $91.55 lvls, with key resistance likely being in the $120-130 range, from these $102 lvls. Its worth noting the short-interest as a % of the float is c. 28%, with c. 8x to cover as of 14 days ago. So we could see some shorts being covered as we approach the earnings date &amp; a squeeze if there is an upbeat surprise. BYND has had 4 consecutive negative months where it has dropped from 157.49 to 98.98 for the close of Oct, that&rsquo;s a -37% fall.<br /> <br /> </span></li> <li><span>On the other hand, in just 1m alone Compass Pathways [CMPS] is up over +55%, in an example of where patience has paid off. We&rsquo;ve touched on CMPS since its listing last year; <a href="https://www.home.saxo/en-sg/content/articles/macro/md-tue-22-sep-2020-22092020">Macro Dragon: Putting Compass on the Map... Mycelium, Magic Mushrooms + Psychedelics for Medicine &amp; Treatment</a> - with the key catalyst always being 2H21 on the results of the clinical trials.<br /> <br /> <img alt="CMPS - 6m chart" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/cmps---6m-chart.svg" /><br /> <br /> </span></li> <li><span>The chart is breaking out big time past $40 previous resistance lvl. At $46.66, the next likely key lvls to test will be $50 &amp; the all time high of c. $62. This is not a chart that KVP would be short, unless there was a specific event-driven catalyst as a play. Its worth noting that CMPS is set to report on Nov 12.<br /> <br /> </span></li> <li><span>Lastly with at least no near-term earnings risk, we had AirBnB[ABNB] reporting yesterday, whilst it close dup +3.2% at 178.45, the results were post market &amp; its currently looking indicated at 184.60/185.00, a c. +3-4% uplift on yest.&rsquo;s close. </span></li> </ul> <p> <img alt="ABNB - 6m chart" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/abnb---6m-chart.svg" /><br /> &nbsp;</p> <ul > <li><span>The likely next key lvl to test on ABNB is $200, with support being offering at the $160 lvl. It will be interesting to see how it trades on this NFP Friday. Good wkd folks. </span></li> </ul> <br /> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Fri, 05 Nov 2021 08:00:00 Z2021-11-05T08:27:08Z{86D742FE-9A48-4C61-9AF0-ED9CA32417E7}https://www.home.saxo/en-mena/content/articles/macro/md-mon-1-nov-2021-01112021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon: The Return of Trump [DWAC], Diwali, FOMC, RBA, BoE & Final Countdown on 2021<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon: The Return of Trump [DWAC], Diwali, FOMC, RBA, BoE &amp; Final Countdown on 2021</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li><span>TGIM &amp; welcome to Nov!<br /> <br /> </span></li> <li><span>As KVP starts his trip back home to SG &ndash; was tough to source a vaccine route, yet super grateful for that &amp; just in time for Diwali!. Happy Diwali everyone!!! &ndash; its worth noting given that Dec is never quite a full month for the markets, this year is really now just down to 6wks, before the usual year-end wrap ups, fatigue &amp; Christmas/holiday parties set in.<br /> <br /> </span></li> <li><span>A lot can happen in 6 wks &ndash; be sure to keep a look out for our Flagship Outrageous Predictions, which are going into c. year 15 &amp; pioneered not just research into year-end/year-start (used to be a vacuum) but has spawned a copy-cat cabal of black, grey &amp; tail-risk type of publications. No doubt the Saxo Strats squad will come up with a few interesting scenarios.<br /> <br /> </span></li> <li><span>Worth noting, that historically what may seem outrageous one year, is down right consensus a few years later. You have been warned. The whole framework of low probability yet highly impactful events, is a great exercise to bring into practice into one&rsquo;s own life, family, career, business &amp; of course one&rsquo;s investment portfolio. People tend to find they are too concentrated on some aspects, to many bottle necks on others &amp; still at other times, find that overall they are not taking enough exposure for the upside.<br /> <br /> </span></li> <li><span>So watch out for our Outrageous Predictions &amp; as always, feel free to send in your suggestions &ndash; the word for inspiration is, revolution.</span></li> </ul> <p><strong><span><br /> Week Ahead</span></strong></p> <ul > <li><span>Worth noting the CH PMI data over the wkd missed across the board as the headwinds continue on growth: 49.2a 49.7e for Mfg PMI &amp; 52.4a 53.0e for Serv. PMI. There are potentially few things one can ever say in the Global Macro world with certainty, but does not look like China is going to be hiking anytime soon!<br /> <br /> </span></li> <li><span>The first wk of a new month is always full-court press, with Final PMIs, US ISMs, US NFP &amp; in a case of this time of the year, likely final push performance wise into year end &ndash; so watch out for those potential month-end/month-start flows.<br /> <br /> </span></li> <li><span>And if that was not enough, we have a Fed meeting this wk &ndash; so watch out for that FOMC statement (Wed). The Fed will likely overshadow the rate decision meetings out of the RBA (Tue) &amp; BoE (Thu)<br /> <br /> </span></li> <li><span>Daylight saving shift for Europe &ndash; Winter is coming.<br /> <br /> </span></li> <li><span>Hols: FRA &amp; IT out on Mon, JP out on Wed, SG out on Thu (Diwali)</span></li> </ul> <p><strong><span><br /> The Return of Trump&hellip; DWAC +$3.1B Mkt Cap</span></strong></p> <ul > <li><span>During the Trump regime, that Dragon gassed a lot about what was coming out of the then POTUS&rsquo;s office. One of the things we speculated on, was that he was going to tilt to media in one form or another. Either launching something akin to Trump TV, or being a presenter for 10s of millions a year or some sort of social media platform.<br /> <br /> </span></li> <li><span>Well, the law of unintended consequences has come full circle. The majority of the incumbents (&amp; elite) worked hard to block Trump, often for no other reason than disagreeing with his views that opposed theirs &amp; sometimes for very valid &amp; rational reasons that had to do with the safety of others &ndash; the capital riots come to mind. So the hatred &amp; extreme speed (from both left &amp; right side) continued to escalate throughout his term, with the final coup being Trump getting banned from Twitter &amp; some other social media platforms.<br /> <br /> </span></li> <li><span>Twitter was the stake in the heart &ndash; through it, Trump pioneered a direct line to American citizens &amp; the world that had never been seen since the dawn of radio &amp; TV (even those mediums &amp; presidents speaking on them, were deemed controversial at the time), which has seen been replicated by many leaders globally &ndash; for Trump, as the absolute worst thing that you can do to a megalomaniac is to starve them of oxygen, a channel into the world. The paradox of course was +74m Americans voted for Trump &amp; he had over 80m followers on twitter &ndash; now granted not all of those votes &amp; followers are fanatic fans. It&rsquo;s a relative world after all. Yet one would say 25m (1/3) of those votes are potentially big Trump fans. Enter the power of the network effect&hellip;<br /> <br /> </span></li> <li><span>Last week Trump launched a SPAC vehicle [Digital World Acquisition Corp, ticker DWAC] that will be focused on media &ndash; listing all major media platforms &amp; outlets as potential competitors. Trump is basically offering a counter voice to the very left controlled mediums of the New York Times, the Washington Post, etc.<br /> <br /> </span></li> <li><span>At one point last wk DWAC was up over 1200% before finally closing the wk at $67.75 &ndash; for those not familiar with SPACs &ndash; we covered them here before on Macro Dragon &ndash; the strike of the shares is $10. So whilst the highs of the wk were $175, where at one point it was worth over $8B, we are still c. 7X from a normal SPAC strike &amp; the mkt cap is $3.1B.<br /> <br /> </span></li> <li><span>The result of all this, is the incumbents who worked so hard to kick Trump off &ldquo;their&rdquo; stage, have done something for Trump that he could never do himself. They have made him a bona fide billionaire &ndash; assuming he executes correctly on this. The smartest &amp; simple thing would be to buy out a few established media sources, rather than try to build everything from scratch. It will be interesting to see how it plays out.<br /> <br /> </span></li> <li><span>There are a few lessons here from an investment perspective: 1. There are always opportunities, one needs to have a cultivated mind that is open to everything, yet attached to nothing. 2. Never underestimate the power of the network effect (Power law distribution), coupled with contrarianism against the established narrative &amp; the anti-fragile nature of what Trump represents (rightly or wrongly) to his flock &ndash; something different from the current establishment.<br /> <br /> </span></li> <li><span>All of that is currently worth $3B &ndash; which is likely what the NYT &amp; Post are combined. We will almost certainly see more SPACs in the works for The Donald. Move over MEME stocks, there is a new Sherriff in town.<br /> &nbsp;</span></li> </ul> <p><strong><span>Recent Works to Keep In Heavy Rotation</span></strong></p> <ul > <li><span><a href="https://www.home.saxo/en-sg/content/articles/macro/french-election-update--far-rights-battle-purchasing-power-and-pension-reform-31102021">French Election Update : Far Right&rsquo;s Battle, Purchasing Power and Pension Reform</a> &ndash; as Dembik checks in on the latest developments on France&rsquo;s election<br /> <br /> </span></li> <li><span><a href="https://www.home.saxo/en-sg/content/articles/podcast/podcast-oct-29-2021-29102021">Market challenges ECB. Facebook is now Meta. Huge week ahead for US.</a> &ndash; latest Market Call Podcast from our European Based strategist, that also touch on the busy wk ahead<br /> <br /> </span></li> <li><span>In case you missed our 4<sup>th</sup> quarter outlook: <a href="https://www.home.saxo/campaigns/pr/2021-h2/saxo-q4-outlook-this-time-is-different#:~:text=Saxo%20Q4%20Outlook%3A%20This%20Time%20is%20Different%20Saxo,of%20central%20macro%20themes%20impacting%20investors%20and%20markets.#:~:text=Saxo%20Q4%20Outlook%3A%20This%20Time%20is%20Different%20Saxo,of%20central%20macro%20themes%20impacting%20investors%20and%20markets.">Saxo Q4 Outlook: This Time is Different</a></span></li> </ul> <p><span>-</span></p> <p><span>Start &lt;&gt; End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p><span>This is The Way </span></p> <p><span>Namaste,<br /> <br /> KVP</span></p> <p><span>Dragon Interviews: <a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> </span></p> &nbsp; <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 31 Oct 2021 23:00:00 Z2021-11-05T08:27:45Z{9E4C0407-3D86-49BE-9317-F167917DBE1D}https://www.home.saxo/en-mena/content/articles/quarterly-outlook/in-a-world-of-negative-real-rates-05102021Kay Van-PetersenPrimary-Quarterly OutlookIn a world of negative real rates, EM Asia is a beacon of hope<div class="article-excerpt">It's time to take a step back from developed markets if you want to find positive yields</div><div class="article-rte"><div class="rte--output"><h4 class="heading--4">Inflation is no transitory joke &hellip;&nbsp;</h4> <p class="text--body">Take it from someone who&mdash;unlike my peers&mdash;was originally in the transitory camp of inflation; after all, the tri-factor meta-trends of ever-lower US yields since the 1980s, deflationary forces of technology, and ageing demographics in most western and developed markets were goliath factors that have been running for decades.&nbsp;</p> <p class="text--body">Now it&rsquo;s not so much that these meta-trends have been usurped overnight; it&rsquo;s more the recognition of the fact that we could well be entering a medium inflationary regime which could run for years.&nbsp;</p> <p class="text--body">For context here is a table of recent inflationary prints across the globe (September 16, 2021)*:</p></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=71145508"></iframe></div><div class="article-image"><img alt="" src="https://www.home.saxo/-/media/content-hub/images/2021/september/q4-2021/kvp-table.jpg"/></div><div class="article-additional-rte"><div class="rte--output"><p /> *Worth noting that Australia and New Zealand CPIs are quarterly, unlike the default monthly figures for other countries. Sources are Saxo Bank and Bloomberg. <br /><p /> <p>The fascinating thing you can see is that out of the major economies in the world, from both a DM and EM representation, the US is fourth in terms of having the highest inflation rate at 5.3%, but has a central bank rate of 0.0%&mdash;way lower than the +4.50% to +6.75% range across Russia, Brazil and Mexico.&nbsp;</p> <p>If someone had told you in December 2019 that in 2 years&rsquo; time the US would be showing higher inflation than places like South Africa, Indonesia and India, alongside a central bank that had not hiked or tapered yet, they would have been laughed out of the room.&nbsp;</p> <p>The other startling takeaway is the +3.2% to +3.8% range of inflation across the other DMs, with all of them having all-time low central bank rates. What is even more revealing of the inflection point, is when you compare the inflation and central bank rates pre-Covid (December 2019) and today (September 2021).&nbsp;</p> <p>For instance, pre-Covid Norges bank&rsquo;s rate was +1.50% with inflation running at +1.40%. Today inflation has more than doubled to +3.40%, while the Norges bank rate as of early September was sitting at 0.00%. It&rsquo;s not hard to fathom a pathway where Norges bank returns to its +1.50% rate, if not higher, over the next 12 months.&nbsp;</p> <p>Meanwhile in China, Indonesia and India, inflation has actually been falling from pre-Covid levels to the present. And in the case of China&rsquo;s PBOC, they never cut rates during the Covid crisis.&nbsp;</p> <h4 class="heading--4">Negative real rates reign supreme in developed markets &hellip;</h4> <p>Negative real rates seem to be a function of developed markets that have lost the ability to have true price discovery, and are instead influenced by synthetic pricing as a result of extraordinary credit growth. A key inflection point was seen in 1971 when Nixon took the US off the Gold Standard and with it, accountability. Also after the 2008 financial crisis, the predominant response from the US and most of the world was one of monetary policy expansion but fiscal policy restraint. Obama was a Democrat president and Congress was controlled by Republicans who, now being out of the White House, had found faith again in being fiscally conservative.&nbsp;</p> <p>For additional context on the extent of this synthetic pricing that is prevalent in our markets, the Fed&rsquo;s BS/GDP ratio grew from around 6% prior to the sub-prime 2008 crisis to a high of 26%, in measures that were supposed to be &ldquo;temporary&rdquo;. &ldquo;Tapering&rdquo; brought us back to a low of 18%, and then post-Covid we&rsquo;ve seen that ratio spike to 38%. Now where could this number get to?</p> <p>When Abenomics kicked off in the back end of 2012, the BoJ BS/GDP was around 28%. Today, less than 20 years later, it&rsquo;s 133%, with no signs or indications of a reversal of policies to any kind of normalisation. The BoJ own the vast majority of the bond market in Japan and depending on whose data you trust, potentially up to 30% of equities. And this from the third biggest country that, unlike the US, is not even the global reserve currency of the world, with the deepest and most valuable equity, debt, real estate and intellectual property markets.</p> <p>If we normalise the quarterly growth of the Fed Balance Sheet versus the S&amp;P 500 from the end of 2007 to the end of August 2021, we can see that the Fed&rsquo;s Balance Sheet grew by +935% versus the S&amp;P 500&rsquo;s +308%.&nbsp; &nbsp;</p></div></div><div class="article-image"><img alt="" src="https://www.home.saxo/-/media/content-hub/images/2021/september/q4-2021/kvp-fed-balance-sheet.jpg"/></div><div class="article-additional-rte"><div class="rte--output"><p /> Source: Bloomberg and Saxo Group<br /><p /> <p>The net result of all this liquidity in the system is developed markets that cannot reverse course back to a world of positive real rates. The political capital, will and courage is not there. Perhaps most alarming, the zeitgeist and the societal imbalances would just not stand for it. In the DMs we&rsquo;ve just had the biggest wealth distribution from government balance sheets to its citizens and the vast majority are going to get used to this entitlement. And politicians being politicians, they will respond like monkeys, pushing the same button over and over all because it feels good and leads to their further entrenchment. The flawed incentives, vested interests of the elite, and lack of accountability and transparency from policymakers have DMs stuck in a vicious feedback loop that only compounds the house of cards that has been building since 2008.&nbsp;</p> <h4 class="heading--4">Emerging markets are the only place to find positive real yields.&nbsp;</h4> <p>EM Asia is host to some of the biggest real rates yielding bond markets in the world. These include Indonesia (+4.5%), China (+2.1%), and Malaysia (+1.1%); contrast this with the negative rates to be found in the USA (-4.0%) and the Eurozone (-3.7%).</p></div></div><div class="article-image"><img alt="" src="https://www.home.saxo/-/media/content-hub/images/2021/september/q4-2021/kvp-emerging-markets.jpg"/></div><div class="article-additional-rte"><div class="rte--output"><p /> Source: Bloomberg and Saxo Group<br /><p /> <a href="https://www.home.saxo/en-mena/products" class="v2-btn v2-btn-primary">Explore Saxo’s products</a></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/thought-leadership/quarterly-outlook">Quarterly Outlook</a></div>Tue, 05 Oct 2021 05:58:00 Z2024-01-20T00:06:49Z{40CAF59B-0C5E-45FB-82A2-AFBF97EBE5F5}https://www.home.saxo/en-mena/content/articles/macro/md-mon-20-sep-2021-20092021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK #39: Heavy Central Banks WK Ahead, From the Fed to the BCB to Norges Bank... plus the Asia Sell-Off continues<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #39: Heavy Central Banks WK Ahead, From the Fed to the BCB to Norges Bank... plus the Asia Sell-Off continues</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #39&hellip;</span></li> <li ><span >Hope everyone had a brilliant wkd in the case of Japan &ndash; back in on Tue - &amp; China &ndash; back in on Wed &ndash; enjoy the long wkd + well deserved downtime. </span></li> <li ><span >We covered a lot of what is Top of Mind in last wk&rsquo;s Macro Dragon #38: <a href="https://www.home.saxo/content/articles/macro/md-mon-13-sep-2021-13092021">US Inflation, US Infra Bill Discussions &amp; US Debt Ceiling are key for the pre-FOMC wk ahead</a></span></li> <li ><span >So not going to rehash what we covered around the Infra-bill, as well as potential tail-risks to getting the full $3.5T or a big fat $0, as those were all covered last wk. For now the most important thing from a Market&rsquo;s risk on or risk-off into year end, is around the US Infra Bill &ndash; with Sun Sep 26 being the key deadline. </span></li> <li ><span >For WK #39 &ndash; whilst we will also have flash PMIs across the board this wk, there are really only two additional key things that are front &amp; center for KVP. </span></li> <li ><strong><span >ONE - Central Bank Rate Decisions:</span></strong><span > Super busy central bank docket, that should likely see a wash from the Fed meeting (miss in core last wk 4.0%a 4.2%e 4.3%p, headline was 5.3%a/e 5.4%p, plus epic miss in NFPs at the start of the month 235k a 725k e 1053k r) will give Snowflake Powell all the imaginary wiggle room he needs to dodge tapering. Yes would be a surprise to KVP if they used this Sep 22 mtg to signal the start &ndash; think they are waiting to see where things fall on the Infra bill.</span></li> <li ><span >A few additional thoughts on some of the banks meeting this wk which will see rate decisions out of: Indonesia, </span><span >USA 0.25% e/p, Brazil +6.25% e +5.25%p,</span><span > Switzerland -0.75% e/p, </span><span >Norway +0.25%e 0.00%e, </span><span >Philippines 2.00% e/p, United Kingdom 0.10%e/p, </span><span >Turkey 19.00% e/p, </span><span >South Africa 3.50%e/p</span></li> </ul> <p ><span ><br /> -The Fed is likely to be a wash, with the press conference focused on tapering structure &amp; whether it&rsquo;s still a 2021 affair (hint it will be clearer for the Fed post knowing where we sit on the $3.5T infra bill). <br /> <br /> -Norges bank should be up for what the RBNZ could not, set the bell-curve by being the first G10 central bank to hike rates. KVP still loving the long NOKSEK 0.9969 +0.17% close last wk, continuing to set higher highs. The &lsquo;easy&rsquo; move is to 1.03/1.04. We were 1.05/6 lvls pre Covid &amp; the thesis is simply NO &gt; SW in hawkishness &amp; inflation. &nbsp;</span></p> <p ><span><img height="231" alt="WK 38 NOKSEK" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/wk-38--noksek.png" /></span></p> &nbsp;&nbsp;<span ></span> <p ><span >For context in Dec 2019 Norway has inflation at 1.4% &amp; Norges bank rate was at 0.0%. Today Norway&rsquo;s inflation is at +3.4% &amp; the Norges bank rate is at 0.0%. Also the Norwegian&rsquo;s funded their covid-shock from their sovereign wealth fund, they did not play the debt/leverage game, so no tapering shuffle here. Plus it&rsquo;s a structural proxy play to energy &amp; the world re-opening. <br /> <br /> -To KVP, Turkey&rsquo;s CBRT as always has tail-risk to a cut, despite rampant inflation, Core readings came in better than expected. And some comments from the central bank governor (the 3<sup>rd</sup> in sub 3yrs &amp; an Erdogan man), may suggest that they could be looking to ease in 4Q from the current 19.0%</span></p> <p ><span >-In Brazil, the BCB should continue their hiking regime to 6.38%e 5.25%p, as inflation is still rampant at +9.7% &amp; elections are due next year. Recent econ data from Retail Sales, to economic activity to industrial production have beat strongly. PMIs for Aug are firmly above 50 at 55.1a 54.4p for services &amp; 53.6a 56.7p for mfg. The 2Q GDP figure was a downside surprise QoQ -0.1%a 0.2%e 1.2%p, YoY 12.4%a 12.7%e 1.0%p. Its worth noting BCB&rsquo;s year-end forecast for GDP +5.2%, CPI +7.2%, Policy Rate +7.45% (+220bp from the current 5.25%).&nbsp; &nbsp;&nbsp;</span></p> <p ><span > <br /> The stunning thing &ndash; to KVP at least &ndash; is despite all these rate hikes, the real has only gained +0.86% in total returns against the USD &amp; last year was the worst performing EM currency vs. the USD at c. -22%. Is this a situation where we only see the BRL appreciate when the banking is cutting, as money floods into the Brazilian bond market? Not sure&hellip; need to go back to the drawing board on this puppy. <br /> <br /> </span><br /> <img height="231" alt="WK 38 USDBRL" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/wk-38--usdbrl.png" /></p> <ul > <li ><strong><span >Two &ndash; Asia Risk Off, from selective China tech liquidation to cross-sector liquidations:</span></strong><span > We are starting off the new wk with continued sell-off in Asia equities, more particularly HK equity names. With the HSI currently down over -3.3% at 24100, making new lows in the process. Whilst we have been used to see predominantly China Tech names &amp; selective names such as Evergrande being in the hot seat over the last few months. </span></li> <li ><span >Last wk was pivotal from the context of that selective sector &amp; name specific liquidation, now seems to have spilled across everything. The charts &amp; price action are noting significant reversals in the bank &amp; property names. </span></li> <li ><span >And the Macau names in particular has a spectacular sell-off last wk, as gambling in Macau (the one legal place to do so in China) has now also come under regulatory review. Sands China was down -43% last wk to close at HK$ 15.06</span></li> </ul> <p > <img height="231" alt="WK 38 Sands China" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/wk-38--sands-china.png?h=231&amp;w=469" /><br /> &nbsp;</p> <ul > <li ><span >Even blue chip pure plays &amp; darlings such as AIA Group (1299) that focuses on life insurance in the vastly unpenetrated Asia Pacific dropped c. -8% last wk to HK$ 88.10</span></li> <li ><span >Front &amp; center we have the goliath in the room that is Evergrande, the huge headwind of a known unknown &ndash; whereby the market needs to find out how all that debt, leverage &amp; obligations will be dealt with. Today should mark some expected default of bank loans from the company. </span></li> <li ><span >HK being open whilst the mainland does not get back in until Wed, is likely only exacerbating the sell-off situation. When it rains it pours &amp; for now, it keeps pouring. </span></li> <li ><span >KVP continues to just focus on the price action, as the narrative, headlines &amp; end-game on regulatory strategy are still anyone&rsquo;s guess for now. If there is one clear takeaway from all of this, bottoming out is a process &amp; the trade construction is always superior to the investment thesis (i.e. selectively taking time to build up one&rsquo;s exposure, in case one is wrong-footed on timing). </span></li> <li ><span >At these 24000 lvls the Heng Seng is down -23% from the Feb highs of 26,480 &amp; would need to fall another c. 12% to equal the 21,139 lows set during the 1Q21 covid-sell-off. You know the price action is pretty dire, when you are looking at the Covid-Sell off lows!</span></li> </ul> <p > <img height="440" alt="39 HSI" width="610" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/39--hsi.png" /><br /> &nbsp;</p> <ul > <li ><span >At this point given the sentiment, price action &amp; what seems to be continued wk-in &amp; wk-out of increasing uncertainty, fundamentals are clearly out the window, we are oversold. Yet the only thing that can turn this market in the short-term is a policy response from the government. Otherwise the Macro Dragon&rsquo;s thesis that 6-12M from now, one of the most obvious things to do was to buy the dip in China equities, is looking super questionable. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/equities/is-it-time-to-buy-chinese-technology-stocks-25082021">The house view as from Peter Garny continues to advocate caution &amp; avoid stance for now on China Equities. He&rsquo;s been dead right so far</a>. </span></li> <li ><span >Oh &amp; if you are looking for a few outliers in CH names, Weibo &ndash; the sole China Tech bull that mysteriously operates in a vacuum &ndash; is still +24% YTD whilst Mengniu Dairy is +7% YTD.&nbsp;&nbsp;</span></li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 19 Sep 2021 23:00:00 Z2021-09-21T10:53:41Z{F0F07B8B-558D-43FB-B198-0B08CB7E4720}https://www.home.saxo/en-mena/content/articles/macro/md-mon-13-sep-2021-13092021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK #38: US Inflation, US Infra Bill Discussions & US Debt Ceiling are key for the pre-FOMC wk ahead<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #38: US Inflation, US Infra Bill Discussions &amp; US Debt Ceiling are key for the pre-FOMC wk ahead</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #3</span><span>8 &ndash; Hope everyone had a brilliant wkd</span></li> <li ><span>Risk off in the US last wk was most likely linked to debt ceiling concerns, <a href="https://www.bloomberg.com/news/articles/2021-09-09/yellen-warns-of-financial-system-risk-if-debt-ceiling-not-raised?sref=WtZ2aql3">with a warning from US Treasurer Yellen that the treasury would run out of money by Oct if the debt ceiling was not raised</a>.</span></li> <ol > <li ><span>Its worth noting the deadline passed wks ago &amp; the US Treasury has been operating under extraordinary measures<br /> <br /> </span></li> <li ><span>Whilst the US debt ceiling debate tends to be cyclically &amp; always ends up with an eventual extension &ndash; it once again shows the tribalism between the democrats &amp; republicans<br /> <br /> </span></li> <ul > <li ><span><a href="https://en.wikipedia.org/wiki/United_States_debt-ceiling_crisis_of_2013">Back in 2013 with Obama in office, the debt ceiling debate went on for so long, that the US government had to shut down parts of its operations (National Parks, Museums, etc)<br /> <br /> </a></span></li> <li ><span>This was basically the date that the republicans turned what was a signature bipartisan process, to rolling the dice with the credit rating, faith, clarity of US government debt<br /> <br /> </span></li> <li ><span>The US government eventually got downgrade from a ratings agency, which ended up marking the low of the stress in the bond market<br /> <br /> </span></li> <li ><span>Its worth noting that the debt ceiling crisis of 2013 lasted from c. Jan to Oct 17 2013, yet republican approval got decimated.<br /> <br /> </span></li> <li ><span>KVP&rsquo;s view is this time, its different. The zeitgeist of the average voter is of entitlement &amp; for the government to do more. MMT has left the loonie house. And the average American voter, just has many other priorities than the US deficit in an economy that is still tackling Covid </span></li> </ul> <li ><span>The probability of it not being resolved &amp; the US defaulting on its debt is probably 0.01% I.e. not very high, its all politics &amp; posturing around the other discussions on the plate<br /> <br /> </span></li> <li ><span>The risk-off at S&amp;P down -1.7% for the wk to 4458, is pretty mild considering we are still up +19% YTD. It worth noting the divergence in CH, HK &amp; JP equities. With the Nikkei now up over 13% in the last 3wks alone <br /> </span></li> </ol> <li ><span><a href="https://www.theguardian.com/us-news/2021/sep/11/biden-vaccine-mandates-praise-pushback">Biden&rsquo;s move to make vaccines mandatory for government agencies &amp; employees, as well as introducing fines &amp; friction for business that have not taken up vaccination has caused the usual expected uproar.</a> People have to understand, that you are entitled to your own ideology, as long as it does not negatively impact the rest of society. KVP did a Macro Dragon Reflections piece on this months ago, on the end-game of covid. People need to be protected from themselves. <br /> <br /> <a href="https://www.home.saxo/content/articles/macro/macro-reflections-thu-15-jul-2021-15072021">Macro Dragon Reflections: Is it enough of the Hammer &amp; Dance Strategy &amp; time to just step through the imperfect Covid-Gateway?</a><br /> <br /> </span></li> <li ><span>Biden&rsquo;s initiative is actually very bullish &amp; one can expect this to ripple across globally, as politicians &amp; country leaders come to realize what a lot of their constituents already know &ndash; <strong><span class="underline; ">we have to learn to live with covid, its endemic, its not a pandemic whereby we will ever get the virus to zero.</span></strong> The 2<sup>nd</sup>, 3<sup>rd</sup> &amp; 4<sup>th</sup> order consequences are way bigger, than a small minority of the population dying. This is not to dilute or discount families &amp; people who have lost loved ones to the virus &ndash; but to point out, almost all doctors &amp; epidemiologists out there, are only trained to think about saving lives (The very linear 1<sup>st</sup> order consequence). <br /> <br /> </span></li> <li ><span>A lot more people will die, as well as structurally underperform - from the restrictions &amp; lockdowns &ndash; for years to come, than covid will ever kill (depression, suicide, lost years in education, business, work options). And yes, that will continue to be a structural drag &amp; unintended consequence of a lot of governmental actions. The result? Even more fiscal &amp; government support to come for decades &ndash; they will not be able to turn off the taps&hellip; not for long anyway. <br /> <br /> </span></li> <li ><span>So what&rsquo;s the eventual pathway to the other side of Covid look like? It&rsquo;s a pathway of everyone getting vaccinated to a +80% hurdle in society (in rich countries at least, EMs have to take it on the chin &amp; move on &ndash; the masks actually delay the eventual herd immunity needed by most EMs), then we start measuring the deaths instead of the infections&hellip; i.e. it made sense to measure the infections pre-vaccine, yet post vaccinations, the true measure for concern is deaths, which have been proven to be magnificently reduced to sub 2%. <a href="https://www.washingtonpost.com/health/2021/09/10/moderna-most-effective-covid-vaccine-studies/">Or to frame it differently someone unvaccinated is +10x more likely to be hospitalized &amp; +11x more likely to die of Covid-19, than someone who is vaccinated</a>. <br /> <br /> </span></li> <li ><span>This is not ideology, but simple risk-reward on a cost-benefit analysis folks (Western countries &amp; western frameworks tend to confuse ideology from reality &ndash; i.e. America the home of the free? Tell that to a Texan woman who got raped &amp; now cannot get an abortion). <br /> <br /> </span></li> <li ><span>Again &ndash; this is cost-benefit skew folks, not ideology. Just how we get to play in society by paying taxes &amp; respecting the rule of law (all these are costs or investments), the benefits are (or should be) safety, health, shelter, freedom to work, live, study, play &amp; move where you can in that society. <br /> <br /> </span></li> <li ><strong><span >Week ahead is really all about US Inflation, US debt ceiling &amp; cont. focus on the $3.5T US Infrastructure bill that has been kicking around in congress for several weeks now</span></strong></li> <ol > <li ><span >There should be a soft Sep 15 deadline to getting the terms of the bill squared off, with a hard deadline that the already agreed $500B needs to be greenlighted no later than Sep 29<br /> <br /> </span></li> <li ><span >There is a debate about how much of the potential $3.5T is priced in, KVP&rsquo;s view is not much&hellip; it looks like the mkt is potentially expecting at least +$2T&hellip; yet it&rsquo;s also worth noting US earnings continue to be very strong<br /> <br /> </span></li> <li ><span >So a passing of +$2T would be very bullish for risks (new highs in S&amp;P, Tech &amp; Cyclical names, as well as crypto), the fully $3.5T being passed is likely a small probability of 10% &amp; would be mega bullish for stocks &amp; bearish for bonds<br /> <br /> </span></li> <ul > <li ><span >In a case of the $3.5T, the SPX is almost certainly to get to 5,000 from the 4,458 -1.7% of last wk </span></li> </ul> <li ><span >If for some reason none of the infra. Bill gets through, i.e. $0&hellip; that would likely shave anything from a min -3% to -5% on the S&amp;P taking us to a potential -10% to -15% pullback&hellip; yet this is also likely a low probability 10%<br /> <br /> </span></li> <li ><span >Key point here is the zeitgeist of the US population is the government should do more&hellip; &amp; I think the smarter republicans will also realize that<br /> <br /> </span></li> </ol> <li ><span></span><strong><span>US CPI for Aug is out on Tue &amp; expected at 5.3%e 5.4%p YoY, +0.4%e +0.5%p MoM</span></strong><span>. </span></li> <ol > <li ><span>Its worth noting the chart below that shows a high positive correlation between US PPI &amp; CPI. US PPI came in last wk at +8.3%, this is ATH since the survey data from Nov 2010 (c. 11yrs)<br /> <br /> </span></li> <li ><span>Its also worth noting that similar to Average Hourly Wages, we&rsquo;ve had 5 consecutive months of inflation beats in the US <br /> <br /> </span></li> </ol> <li ><strong><span>Other Things of Note</span></strong><span>:</span></li> <ol > <li ><span>We also have inflation figures out of the UK-CA-EZ, as well as RS out of the US &amp; UK<br /> <br /> </span></li> <li ><span>Monthly growth numbers out of China are due, given that the Caixin PMIs are both in contraction, the deceleration of the<br /> Chinese economy is likely continuing. This is actually potentially bullish for CH &amp; HK stocks, as it likely raises the probability &amp; magnitude of accommodative&nbsp;policies from the government into year end&nbsp;<br /> <br /> </span></li> <li ><span>2Q GDP figures out of NZ on Thu 1.1%e 1.6%p. RBNZ swear that they will be hiking at the next mtg on Oct 6, yet they blinked at the last Aug 18 meeting when they were expected to hike. <br /> <br /> <a href="https://www.home.saxo/content/articles/forex/md-post-rbnz-wed-18-aug-2021-18082021">Macro Dragon: RBNZ blinks as it keeps rates on hold at 0.25%, following the nation-wide lock-down announced on Tue over one covid-case in NZ</a><br /> <br /> </span></li> <li ><span>Aussie jobs data also due on Thu, with a big contraction expected (-80.0k e +2.2k a) given the lock-down &amp; restrictions around the delta variant that have been a big theme in their 3Q<br /> <br /> </span></li> <li ><span>Apple lost the case again EPIC games, on keeping people out of its app store &amp; taking a default +30% of revenue &ndash; According to our equity strategist Peter Garnry, this is likely going to be taken as a warning shot against all US tech platforms<br /> <br /> </span></li> <ul > <li ><span>Its worth noting the Apple monopoly app business model, is also probably one of the easiest cases to make against big tech (i.e. Amazon is going to be a lot trickier than say Google or Facebook)</span></li> </ul> <li ><span>Inflation continue to spike &amp; beat across the Emerging Markets, causing a lot of their central banks to surprise with hikes or better than expected hikes. Yet even in places like Norway or Germany, its running at +3.4% &amp; +3.9%<br /> <br /> </span></li> <li ><span>Whilst we are selling off aggressively on some of the China Tech names &amp; the Hang Seng in general &ndash; its worth noting we have had 3 consecutive up wks across most China tech names (even with the brutal Thu sell-off, that saw names like Tencent down close to -9%), the HSI &amp; the CSI-300<br /> <br /> </span></li> <ul > <li ><span>KVP would focus on the prices doing the talking, rather than bother with the ambiguous task of seeing if we&rsquo;ve hit peak regulatory concern &amp; uncertainty. One thing is for sure, the sentiment is still super bearish, poor &amp; feels like maximum uncertainty<br /> <br /> </span></li> <li ><span>Its worth remembering that making a bottom or a top is a process&hellip; </span></li> </ul> <li ><span>The Fed should be in blackout given next wk&rsquo;s FOMC meeting<br /> <br /> </span></li> <li ><span>RBA Lowe is set to speak on Tues 1045am (SGT/HKT)<br /> <br /> </span></li> <li ><span>There are tons of elections in Sep, including:<br /> <br /> </span></li> <ul > <li ><span>Sep 20: <a href="https://www.bbc.com/news/world-us-canada-58495746">Canada Federal Elections</a><br /> <br /> </span></li> <li ><span>Sep 26: <a href="https://www.dw.com/en/german-election-armin-laschet-summons-bavarian-loyalty-on-final-stretch/a-59151972">Germany Federal Elections</a><br /> <br /> </span></li> <li ><span>Sep 29: <a href="https://www.reuters.com/world/asia-pacific/five-facts-about-japan-prime-minister-hopeful-taro-kono-2021-09-10/">Japan LDP Leadership Election</a> (eventual general elections likely in October) </span></li> </ul> <li ><span>There are host of central banks for WK #39: With decisions out of the US, ID, BZ, TU, SA, NO, SW, PH, UK. A few notes from the meetings from next wk.</span></li> </ol> </ul> <p ><span> -The Fed is likely to be a wash, with the press conference focused on tapering structure &amp; whether it&rsquo;s still a 2021 affair (hint it will be clearer for the Fed post knowing where we sit on the $3.5T infra bill). <br /> <br /> -Norges bank should be up for what the RBNZ could not, set the bell-curve by being the first G10 CB to hike rates. KVP still loving the long NOKSEK 0.9952 +0.98% &ndash; the easy move is to 1.03/1.04. We were 1.05/6 lvls pre Covid &amp; the thesis is simply NO &gt; SW in hawkishness &amp; inflation. <br /> <br /> -Turkey as always has tail-risk to a cut, despite rampant inflation, Core readings came in better than expected. And some comments from the central bank governor (the 3<sup>rd</sup> in sub 3yrs &amp; an Erdogan man), may suggest that they could be looking to ease in 4Q from the current 19.0%</span></p> <p ><span>-Brazil should continue their hiking regime to 6.38%e 5.25%p, as inflation is still rampant at +9.7% &amp; elections are due next year. </span></p> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 12 Sep 2021 23:00:00 Z2021-09-21T10:41:32Z{8C299B7A-0BB9-427A-8EE6-9231549C4F7E}https://www.home.saxo/en-mena/content/articles/macro/md-mon-6-sep-2021-06092021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK #37: Mixed Jobs likely leave Gold overbought, the USD oversold & real-yields with upside. Its now really all about the US $3.5T infrastructure bill that is being kicked around in Congress<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #37: Mixed Jobs likely leave Gold overbought, the USD oversold &amp; real-yields with upside. Its now really all about the US $3.5T infrastructure bill that is being kicked around in Congress</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #3</span><span>7<span >&hellip;</span></span></li> <li ><span>In case you missed the latest Steen Chronicles that dropped over the wkd, have no fear, we got you. <a href="https://www.home.saxo/content/articles/macro/steens-chronicle-pax-americana---beginning-of-the-end-or-the-end-03092021">Steen's Chronicle: Pax Americana - beginning of the end or The End?</a> </span></li> <li ><span>A special happy labor day wkd to our Canadian &amp; Americans loved ones, friends, frenemies, clients &amp; even family! Enjoy the long-wkd &amp; the milestone signal that summer is at a close in the Northern Hemisphere. Is Winter Coming?</span></li> <li ><span>Folks will be getting back to their desks on Tue in North America &amp; note that YTD the SPX is +21, the NDQ is +22% &amp; China Tech ETF KWEB is -32% YTD.</span></li> </ul> <p > <img height="229" alt="37 KWEB" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/37--kweb.png?h=229&amp;w=469" /><br /> &nbsp;</p> <ul > <li ><span>KVP starts of the wk with the skews of wanting to be short gold (1827 +0.56% last wk), long the USD (DXY 92.035 -0.70%, except maybe on BRL + CLP) &amp;&hellip; </span></li> </ul> <p ><span ><img height="231" alt="37 GOLD" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/37--gold.png?h=231&amp;w=469" /></span></p> <ul > <li ><span>&hellip;looking for continued price confirmation on China tech (our VIPs can expect a detailed cut of this contrarian high conviction view that has been bubbling in the Macro Dragon kitchen) &ndash; worth noting the formal <a href="https://www.home.saxo/content/articles/equities/is-it-time-to-buy-chinese-technology-stocks-25082021">Saxo House view from Peter Garnry is to wait &amp; if you have to pick something, do so in the consumer side given the lack of certainty</a>. </span></li> <li ><span>The Macro Dragon will do a piece on two significant events from last wk, that <span class="underline; ">potentially</span> bode to the start of a bottoming out in China Tech &amp; the HK equity space - &amp; yes, KVP also thought we were bottoming out in Jul &amp; we kept getting hosed. </span></li> </ul> <p > <img height="229" alt="37 9988 HK Alibaba" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/37--9988-hk-alibaba.png?h=229&amp;w=469" /><br /> &nbsp;</p> <ul > <li ><span>Yet just like our Macro Reflections piece on Afghanistan, <a href="https://www.home.saxo/content/articles/macro/reflections-afghan-1-sep-2021-01092021">Macro Dragon Reflections: Afghanistan - The Return of the Taliban. What if, This Time Its Different?</a> &ndash; sometimes one goes in against the crowd &amp; consensus view that is screaming in despair to get out, &ldquo;the sky is falling&rdquo;, &ldquo;it&rsquo;s the end of the world&rdquo;, etc. </span></li> <li ><span>One thing about the consensus view, is it is actually right overtime &ndash; after all, that is what momentum is, consensus views &amp; more importantly consensus positioning. Yet a consensus view from positions of extreme emotion, is almost never right. Remember Mar/Apr in 2020? Buying the pullback was the most insane thing to do, given what seemed likes maximum uncertainty &amp; peak-bearish sentiment &ndash; for the record, at the time the Dragon still felt there was another -30% to -50% to come on the S&amp;P 500, despite the dichotomy on being comfortable that credit had put in a floor (Yes, yes&hellip; don&rsquo;t get KVP started&hellip; billions were left on the floor, to be made later no doubt) &ndash; yet under the right trade construction it was the exact right thing to do, in hindsight. </span></li> <li ><span >Remember folks, the top &amp; bottom are only known by looking back, yet now &amp; then you need to take a step back, hoover up to 100,000 feet &amp; ask; <br /> <br /> </span><span>&ldquo;What is likely going to be super obvious in 6-9-12 months&rsquo; time when one looks back?&rdquo;&nbsp;</span></li> <li ><span>So US data last wk showed solid holding up of the economy with healthy beat on ISM mfg. 59.9a 58.5e 59.5p &amp; a slight beat on the more important ISM Serv. 61.7a 61.6e 64.1p. </span></li> <li ><span>The Fri-Yay! jobs data was mixed, yet to a very much non-transitory camp. </span></li> <li ><span>Yes epic miss on NFP at 235k a 725k e 1053k r (+110K from last months beat), yet big beat on Avg. Hourly Earnings (AHE) with a +0.60%a +0.30%e/p MoM &amp; +4.3%a +3.9%e +4.0%p. This now takes us to 5 consecutive beats on AHE both on a MoM &amp; YoY basis. The U/R also came in line at 5.2%a/e down from previous 5.4%. </span></li> <li ><span>So what does this mean for Macro? Well it gives the Fed a delay taper to next year card &amp; it almost definitely crushes any chance of an announcement in Sep 22. It also fully turns the focus for the most important factor now being around the $3.5T Infra bill in Congress &ndash; that is basically going to be the fulcrum for just how much risk-on / risk-off we get from now into year end. </span></li> <li ><span>Also worth noting last wk surprise as &ldquo;Suga Suga&rdquo; a.k.a. Yoshihide Suga, resigned as the Japanese PM , igniting a bullish rally in JP equities. The Nikkei&nbsp;did +5.4% last wk to close at c. 29,130 &amp; is already off to a big start this wk, +500 points on Asia Mon morning at +1.72% to 29625. </span></li> <li ><span>Narrative is folks are underweight, new leadership will unleash more fiscal spending &amp; there is really only upside on the progress on the vaccine front (c. 40% of country vaccinated, expecting it to get to 80% by Oct/Nov). Its going to be hard to replace a once-in a generation leader like Abe (who stepped down end of last year) &amp; the risk is we go back to what was the norm of the rotating door of Japanese PMs. What could be super interesting is if the popular &amp; controversial (to a heavily male dominated society) <a href="https://en.wikipedia.org/wiki/Yuriko_Koike">Governor of Tokyo, Yuriko Koike</a>, throw her hat into the PM race.&nbsp;&nbsp;&nbsp;</span></li> <li ><span>There is a lot of key election risks into yearend folks from Japan, to France &amp; likely most importantly, German &ndash; as the latter will see a new regime after 16yrs of one of the all-time GOATs of leadership, Angela Merkel.&nbsp;<br /> <br /> </span></li> </ul> <p ><strong><span>Rest of the Week</span></strong></p> <ul > <li ><span>US &amp; CA back in on Tue, following the long labor day wkd &ndash; interestingly enough, volumes are generally higher on the shorter wk following labor day that the wk before. Which makes sense, as early Sep is when most folks are back on the desk. </span></li> <li ><strong><span>Econ Data:</span></strong><span> Much lighter overall, we got ZEW surveys out of Germany &amp; EZ block. There is a PPI theme with figs due out of China &amp; US, plus inflation from China &ndash; for context 9.1%e 9.0% is PPI skew from China (inflationary to RoW!). For CA, Fri will be key gives jobs data due &amp; also have BoC Gov Macklem speaking on Thu (post Wed BoC mtg) </span></li> <li ><strong><span>Central Banks:</span></strong><span> All are likely tail-risks to the hawkish side, meaning that is the lower probability event. We got RBA on Tue, BoC on Wed &amp; ECB + BNM on Thu. </span></li> <li ><span>The later is a little more spicey, given the EZ inflation beat last wk (MoM 0.4%a 0.2%e -0.1%p, YoY 1.6%a 1.5%e 0.7%p) &amp; calls from the hawkish camp (read Bundesbank &amp; Northern Europe) to need to start tapering &amp; raising rates at some point. </span></li> <li ><span>Taper will be the focus on the RBA &nbsp;- will they not delay it, worth noting Sydney (23% of AU pop.) has been pretty much in lock-down since their last mtg in Aug 3 - &amp; on the BoC - Who have tapered twice &amp; may be on the fence on current further reductions in bond purchases, given some recent weak data, GDP miss, etc. </span></li> <li ><span>Bank Negara Malaysia will likely stay put at 1.75%, whilst CBR on Fri will continue on their hiking campaign to 7.00% from current 6.50%. </span></li> <li ><span>The Russian Central Bank governor, Elvira Nabiullina &ndash; one of the best in the world in KVP&rsquo;s view &ndash; <a href="https://www.themoscowtimes.com/2021/06/03/russias-inflation-surge-is-not-temporary-will-hurt-economy-central-bank-warns-a74092">has been very adamant about inflation being real &amp; far from transitory, she has not been mixing up her words here</a>. </span></li> <li ><span>Perhaps Snowflake Powell should take a page out of her book. And yes, on the Macro Dragon we&rsquo;ve been bullish RUB fans pretty much since Sep/Nov 2020 (when we got contrarian long on fossil fuels). If they do hike to 7.00%, they should be taking the crown for the highest yielding liquid EM FX out there (not counting TRY for obvious reasons). </span></li> </ul> <p > <img height="229" alt="37 RUB" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/37--rub.png" /><br /> &nbsp;</p> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 05 Sep 2021 23:00:00 Z2021-09-21T11:02:40Z{5E2555ED-0978-4B09-98AD-CEDEA1A31244}https://www.home.saxo/en-mena/content/articles/macro/reflections-afghan-1-sep-2021-01092021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon Reflections: Afghanistan - The Return of the Taliban. What if, This Time Its Different?<div class="article-excerpt">Our latest Macro Dragon Reflections think piece highlights Afghanistan & the Return of the Taliban, with the most contrarian of pathways. This is a country of +33M people, with one of the lowest GDP per capitas figures in the world. The market cap of Apple is +34x larger than Afghanistan's $73B GDP. This is a country that almost "everyone" has given up on & written off. And that's almost likely why, it will eventually end up surprising to the upside. This is a potential pathway.</div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3" >Macro Dragon Reflections: Afghanistan - The Return of the Taliban. What if, This Time Its Different?</h3> <h4 class="heading--4" ><strong><span >Reflections</span></strong><strong><span>&hellip;</span></strong></h4> <p class="Default" ><strong><span > </span></strong></p> <ul > <li ><span>In case you missed yesterday&rsquo;s piece on Snowflake Powell, the Hong Kong Stock market, Shorting US Duration &amp; waiting to short gold - don&rsquo;t panic, we got you here: <a href="https://www.home.saxo/content/articles/macro/md-tue-31-aug-2021-31082021">Macro Dragon: Snowflake Powell, +$2T US Taxpayers Flushed Dollars &amp; Exit Afghanistan, HK Equities, US Duration, Gold</a></span></li> <li ><span>As in all Macro Dragon Reflections, these are think pieces around different scenarios be they possible, highly or lowly probable pathways. There are many pathways, this is potentially one of them&hellip;</span></li> <li ><span>Let&rsquo;s slice this up in three parts: <br /> <br /> Firstly - lets flag the <a href="https://www.home.saxo/campaigns/webinars/2021/09/01/taliban-return---former-us-ambassador-interview">Global Webinar that we&rsquo;ll be doing today (Wed Sep 1: 2000 SGT/HKD | 1400 CET | 0800 ET) on this very topic, with the former US Ambassador to Afghanistan, Hugo Llorens as well as our CIO &amp; Global Strategist Steen Jakobsen. Both of w<span>hom</span> will be hosted by our Greater China Head of Wealth Management, Lester Chan. </a></span></li> <li ><span>Please sign-up, break out the popcorn, sit back &amp; enjoy as US foreign policy &amp; its implications post Afghanistan will be heavy on people&rsquo;s minds.</span></li> <li ><span>Goes without saying the pathway on this Macro Dragon Reflections think piece from the above webinar is completely uncorrelated in its essence. </span></li> <li ><span>Secondly - we&rsquo;ll touch on the current noise &amp; heavily misplaced &lsquo;analysis&rsquo; around Afghanistan. </span></li> <li ><span>Lastly: We&rsquo;ll introduce a pathway, that may seem the paragon of contrarian to most folks &ndash; especially if you have a Western skewed filter in the form of education, upbringing &amp; content consumption. <br /> <br /> </span></li> </ul> <h4 class="heading--4" ><strong><span >Noise Around US Exit &amp; Afghanistan Imminent Explosion</span></strong><strong><span>&hellip;</span></strong></h4> <p class="Default" ><strong><span > </span></strong></p> <ul > <li class="Default" ><span >The US exited Afghanistan earlier this wk; after 20yrs, over $2T dollars of unaudited tax payers money, over 2400 dead American military members, another +3800 US contractors &amp; likely well over 100,000 Afghanistan Civilians &amp; Service members, including of course Allied States like NATO. </span></li> <li class="Default" ><span >And these are just the first order consequences that can be clearly seen, the 2<sup>nd</sup> &amp; 3<sup>rd</sup> order costs &ndash; ranging from post-traumatic stress &amp; disabilities for the service members that made it back, Afghan Allies &amp; family members who have been torn apart from all this, bloated &amp; systematic corruption of the previous government, the vested interest groups in all of this military contracting, etc&hellip; All of these are systemic issues that will run for years &amp; in some cases decades. </span></li> <li class="Default" ><span >Instead of the press &amp; political opponents taking crack shots at a cluster-fudge of an exit, to try &amp; score points (ignoring that it was a republican president that got the US in this mess), we should agree at the very least on a few things. </span></li> <li class="Default" ><strong><span >One:</span></strong><span > Kudos to for Trump to get the ball rolling on this &amp; for Biden to also have the courage to see it through. Spending close to 10% of your country&rsquo;s GDP on an unnecessary war that was destined to end in defeat (<a href="https://www.youtube.com/watch?v=_m7uL4Q44ws">Check the Documentary Afghanistan: The Great Game from 10yrs ago, that clearly covers how the British Failed, the Soviets [Russia] &amp; eventually the Americans</a>), when at home you have systemic issues around infrastructure, healthcare, education, inequality &amp; society, is the paragon of stupidity, gross mismanagement &amp; to a certain extent just downright evil. This is why AI needs to be part of the decision making in governments, at the very least, a grey box that says, actually we could accomplish the same objectives at 10-20% of those costs under these 3-4 pathways. </span></li> <li class="Default" ><span >This is tax payers money, that has been largely transferred from average hard working American citizens to vested interests in the form of military contractors, consultants, lobbyists &amp; no doubt crony politicians (both in the US, Afghanistan, Pakistan, etc). All under the masquerade of bringing democracy to a neighbourhood near you &amp; getting the terrorists that orchestrated Sep 11. </span></li> <li class="Default" ><span ><a href="https://en.wikipedia.org/wiki/Osama_bin_Laden">Bin Laden (former figure head of Al-Qaeda &amp; Master Mind behind the attacks) was killed in May 2011</a>, in, wait for it, not Afghanistan but Pakistan &ndash; i.e. The US did not need an extensive campaign with boots on the ground &amp; +$2T to snuff out Bin Laden &amp; defeat Al-Qaeda, that was done over a decade ago. But wars (like politics) are big business &amp; incentives drive the outcomes. A general or military contractor is never going to say, you know what think we could do with some peace here, let wrap up &amp; go home &ndash; they are not going to advance in their careers for much longer. The money must keep flowing, at all costs. </span></li> <li class="Default" ><strong><span >Two</span></strong><span >: No-one should be surprised at the level of unaudited &amp; unaccountable spending by the US in Afghanistan, $2T is no big deal if its not your money. <strong><a href="https://www.rollingstone.com/politics/politics-features/pentagon-budget-mystery-807276/">The Rolling Stones did a phenomenal expose on the Pentagon back in 2019 entitled: The Pentagon&rsquo;s Bottomless Money Pit.</a></strong> Have a spin through it, it makes House of Cards look like a Disney movie. </span></li> <li class="Default" ><span >We should not be pointing fingers at the execution on exiting the country, that is mickey mouse stuff, from keyboard basement warriors, snowflakes &amp; virtue&nbsp;</span><span >signalers</span><span >. </span></li> <li class="Default" ><span>We should be asking how was +$2 trillion dollars spent? </span></li> <li class="Default" ><span>What are the links to that spending between lobbyists, contractors (including aid organizations), institutions &amp; politicians? </span></li> <li class="Default" ><span>Who is to be held accountable (hint it will be like Wall Street in the GFC, free passes all around &amp; collect your 7-9 figures pay-out)? </span></li> <li class="Default" ><span>How do we create a systematic framework &amp; process that makes sure this never happens again?</span></li> <li class="Default" ><span >The latter point literally will need a complete overhaul of how spending, accounting, transparency, </span><strong ><span class="underline; ">incentives &amp; accountability</span></strong><span > are conducted by the entire US military structure (both Department of </span><span >Defense</span><span >&nbsp;&amp; Department of Homeland Security). It will be very hard to pull off, as the incumbents have the Teflon cards of Patriotism &amp; Veterans. </span><span ></span><span ></span></li> <li class="Default" ><strong><span>Three</span></strong><span>: Everyone talks about how Afghanistan defeated the great empires of Great Britain, Soviets &amp; now the USA &ndash; but the highest cost, has always been &amp; continues to be paid by the people of Afghanistan. </span></li> <li class="Default" ><strong><span>Four</span></strong><span>: There is no doubt that US foreign policy will be altered &ndash; potentially for decades to come, at the very least 3-4 administration (12-16yrs) &ndash; with any foreign incursions really needing a high bar to justify US involvement. But if dictators &amp; so called strongmen of the world think that the US needs to put boots on the ground to kick their butt, they best think again. <a href="https://en.wikipedia.org/wiki/Iraq_War">The Iraq &ldquo;Defend Qatar =&gt; Look for smoking guns =&gt; bring democracy to the Middle East because clearly they cannot figure it out themselves&rdquo; War kicked off in 2003</a> (by the way <a href="https://www.youtube.com/watch?v=aSGFt6w0wok">VICE is a must watch</a>) its been almost 20yrs since then &ndash; the lvl of technology &amp; weapons development since then has been exponential. If you think its just some sophisticated AI drones, you are going to be in for a rude surprise. </span></li> <li class="Default" ><span>Military tech that focuses on AI, drones, autonomous vehicles, robotics, strike forces &amp; generally anything to do without mass boots &amp; American soldiers on the ground is going to go bunkers. And one of the sweetest spots will be Cyber security &amp; life sciences. </span></li> <li class="Default" ><strong><span>Five</span></strong><span>: There is such as thing as too much money &ndash; it corrupted the very foundation of the Afghanistan government &amp; institutions within. </span></li> <li class="Default" ><span><a href="https://www.washingtonpost.com/graphics/2019/investigations/afghanistan-papers/afghanistan-war-corruption-government/">Dec 2019 - CONSUMED BY CORRUPTION - The U.S. flooded the country with money &mdash; then turned a blind eye to the graft it fueled</a> as an example&hellip;</span></li> <li class="Default" ><span>And if you really want the juice on people, including a <a href="https://www.sigar.mil/">Special Inspector General for Afghanistan Reconstruction</a> check out the twitter handles of @SIGARHQ &amp; @MTRACEY &ndash; the latter journalist <a href="https://t.co/3spRcEIXhl?amp=1">Michael Tracey also has a substack here</a>. </span></li> <li class="Default" ><span>No one is talking about how for years, the Afghan people&rsquo;s concerns about corruption with their government have been steadily rising &ndash; this is a big function to how the Taliban came into power previously, at the very least there was a law &amp; order. Harsh by all means &amp; downright hellish if you happened to be born with no Y chromosomes. But the entire Afghanistan experiment was set-up for failure way before the US pulled out earlier this wk.</span></li> <li class="Default" ><strong><span>Six</span></strong><span>: And this is more of a rant &ndash; but it highlights the linear postulating. Folks were up in arms that the US military had shared with the Taliban a list of Afghan allies to be let through the check-points so they could get to the airport. </span></li> <li class="Default" ><span>The take from the outcries were, this was now going to be an assassination &amp; execution list. Hold up a second. These Afghan allies have literally been working for the US Military/NATO/Contractors/Aid Agencies for years, in some cases 20yrs, ranging on everything from cooks, to drivers, to translators, to couriers, etc&hellip; You don&rsquo;t think the Taliban did not already know who these folks were all this time? This is not a list of 007 spies man. Just take a step back &amp; extrapolate on the data points for crying out loud. <br /> <br /> </span></li> </ul> <h4 class="heading--4" ><strong><span >The Return of the Taliban. What if, This Time It&rsquo;s Different?</span></strong></h4> <p class="Default" ><strong><span > </span></strong></p> <ul > <li ><span>So the outright blaring consensus mega horn is that Afghanistan is doomed. After all, three &lsquo;great&rsquo; power could not help them change their ways for the better, what can anyone do?</span></li> <li ><span>It also worth noting that the vast majority of the analysis, media &amp; generally content we tend to consume (especially folks in finance) is 80-90% traditional western media influenced (US|CA, Europe, AU|NZ) -&nbsp; its small part of the overall globe that punches &amp; influences well above its weight. Kinda&rsquo; like those trolls on twitter, that makes you wonder if everyone in the world has gone bat-#&amp;% crazy&hellip; then you realize its actually a tiny representative of the overall globe.</span></li> <li ><span>Point here is Afghanistan looks like a disaster, we are sitting at maximum uncertainty, the US have pulled out, the Taliban have Returned (if they ever truly left), refugees are flooding out of the country, the last president apparently flew out with a plan stuffed full of cash, etc. </span></li> <li ><span>But what if, for once, it&rsquo;s the four most dangerous words in finance, investing &amp; life: This Time Its Different? </span></li> <li ><span>What if this is actually the best time to GO INTO Afghanistan, to talk to the new leadership of the Taliban, to potential Afghan entrepreneurs, investors, clients?</span></li> <li ><span>20yrs is a long time &amp; whilst the great powers had failed in the past, the last 10yrs have seen the most powerful of all forces in the form of social media &amp; two tips of the spears from that tidal wave: Tik Tok &amp; Instagram. </span></li> <li ><span>The Taliban &amp; Afghan people are not rampant barbarians who only believe in death &amp; honor&nbsp;above everything, eager to get back into their caves now that the imperialists are gone. </span></li> <li ><span>They laugh, love, cry, bleed like you &amp; I. They have families, friend, loved ones like you &amp; I. They have dreams, highs, lows, victories &amp; failures like you &amp; I. They may have a different culture, ethos, history, religion &amp; views &ndash; but the principles of safety, health, family, growth, prosperity ripple across all people. </span></li> <li >And for the last 5-10-20yrs as social media &amp; the connectivity of the world has accelerated, they have also tasted, seen, heard &amp; felt what kind of lives they could be living. </li> <li >If someone had asked the average analyst or military specialist a 6m ago, what do you think would happen if the Taliban took over the country in a mere few wks. You would have seen estimates of thousands of US soldiers killed, mass massacres including public beheadings, etc. </li> <li >Now this is not to say that we are not going to see more chaos or there is going to be anything smooth in Kabul &amp; the country for a while, but it could have been way, way worse than what we have seen. And so far, generally speaking the rhetoric from the Taliban is net-constructive &ndash; they want to build. </li> <li >And there will be people who will go in there &amp; help them build, making an absolute fortune in the process. In the net-flow of things, its likely an asymmetrical opportunity with very low hanging fruit &ndash; i.e. we are not talking state of the art semiconductor chips here, we are talking first basic utilities, consumer staples, consumer discretionary goods, banking &amp; wealth management, trade, etc. </li> <li >This is a country of <span>&nbsp;</span>33M people, with one of the lowest GDP per capita in the world at $2021. The country&rsquo;s GDP is $73B, basically Apple &lsquo;s mkt cap is +34x larger. </li> <li >This is a country that almost &ldquo;everyone&rdquo; has given up on &amp; written off. And that&rsquo;s almost likely why, it will eventually end up surprising to the upside. This is a potential pathway.</li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP<br /> </span><span ><br /> Dragon Interviews: </span><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos" >Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a><span ><br /> </span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Wed, 01 Sep 2021 11:00:00 Z2021-09-21T11:16:12Z{95BBF2C1-BA44-4BFC-81DC-66324C2CD4F2}https://www.home.saxo/en-mena/content/articles/macro/md-tue-31-aug-2021-31082021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon: Snowflake Powell, +$2T US Taxpayers Flushed Dollars & Exit Afghanistan, HK Equities, US Duration, Gold<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3" >Macro Dragon: Snowflake Powell, +$2T US Taxpayers Flushed Dollars &amp; Exit Afghanistan, HK Equities, US Duration, Gold</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >In case you missed the wk ahead piece <a href="https://www.home.saxo/content/articles/macro/md-mon-30-aug-2021-30082021">Macro Dragon WK # 36: Post Jackson Hole, US NFP Fri, Final PMIs Month-End, Afghanistan-End?</a></span></li> <li ><span >So its month end as we get into the afternoon session out here in the Asia Pacific &ndash; KVP&rsquo;s concerns around the price action in China Hong Kong Equities continue. I.e. we are still just a string of bad back to back session to retesting the lows, we have not hit escape velocity &amp; a lot of the price action continues to scream &ldquo;bear market&rdquo; with harsh brutal rallies, followed by more consistent lower lows&hellip;<br /> <br /> <br /> <img height="225" alt="Snowflake HSI" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/snowflake--hsi.png" /></span></li> </ul> &nbsp; <ul > <li ><span >With that said, as we get into the end of Aug (caveat there), price action has turned around &amp; we are well of the lows of the morning session. Now likely we are getting some classic month &amp; quarter end window dressing, rebalancing &amp; overall noise that the calendar brings.</span></li> <li ><span >So the true test will really be how we close for the wk &amp; given that its NFP Fri, could be really a case of next wk (remember US also out on Mon on Labor day wkd </span></li> <li ><span >We are clearly oversold with some names like JD Health International (6618 HK) &amp; Alibaba Health (241 HK) down c. 50% YTD alone, &nbsp;whilst the household names like Alibaba(9988 HK, BABA) &amp; Tencent (700 HK) are down anything from -31% to -16%. </span></li> <li ><span >And yes, KVP&rsquo;s &ldquo;favourite&rdquo; obsession&hellip; the lone bull in the China bear market, Weibo (WB $49.01 +0.68%) is still up c. +20% - granted they blew out the water with some stellar quarterly figures (after also a good 1Q) but c&rsquo;mon man +20% YTD vs. Alibaba -31%, that&rsquo;s a +50% relative outperformance that is not likely to last &nbsp;- it has been closing since we flagged this &lsquo;anomaly&rsquo;, most recent piece was <a href="https://www.home.saxo/content/articles/equities/reflections-weibo-tue-17-aug-2021-17082021">Weibo Erns due pre-mkt Wed, we chk-in with &lsquo;the lone bull&rsquo; in a China Tech Bear Mkt. WB $50.76 -3.6% o/n +24 YTD </a>&nbsp;<br /> <br /> <br /> <img height="443" alt="Snowflake - Relative Tech" width="705" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/snowflake----relative-tech.png" /></span></li> </ul> &nbsp; <ul > <li ><span >Lastly just because we are &ldquo;clearly oversold&rdquo; does not a floor make. Worth checking out Garnry&rsquo;s note on China tech below.</span></li> <li ><span >From KVP&rsquo;s side he&rsquo;s looking for price confirmation that takes things above their Aug high, to suggest that we are trying to make a bottom. For instance Tencent 475.20 +2% getting back above $500.<br /> <br /> <br /> <img height="229" alt="Snowflake - Tencent" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/snowflake---tencent.png" /> </span></li> </ul> &nbsp; <ul > <li ><span >The HSI 25,767 +0.89% clearing above 27,000. Alibaba 163.20 +3.2% above 173.<br /> <br /> <img height="225" alt="Snowflake HSI 2" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/snowflake--hsi-2.png" /><br /> <br /> </span></li> <li ><span >And investors likely need continued regulatory clarity (which we&rsquo;ve been getting more of), more policy support at some point (Hence KVP like China govies based on the simple yet very high probability thesis that the PBOC is not going to hike), as well as some sectors or even companies being given the good to go. </span></li> <li ><span >And yes, there is a trillion dollar opportunity to the group of people that can create a regulatory clean &amp; compliant index of China names. At the end of the day, China is 1.4B people, 2<sup>nd</sup> largest economy on the way to being the first, 2<sup>nd</sup> largest equity &amp; bond markets on the way to being the first. There is not question that it warrants a place in a long term portfolio &ndash; but the timing for going aggressively in, is still suspect. &nbsp;</span></li> </ul> <h4 class="heading--4"><span >&nbsp;US Afghanistan Exit: Waste +$2T of Taxpayers money over 20yrs, Kudos to Biden for stopping the Mad Circus</span></h4> <ul > <li ><span ><a href="https://www.washingtonpost.com/world/2021/08/30/afghanistan-kabul-taliban-live-updates/">Afghanistan Exit</a> &ndash; So looks like the US are out ahead of schedule getting the last US citizens that wanted to leave at least. Yet likely still thousands of Afghani allies who could not make it to the airport, or let alone onto the plan.</span></li> <li ><span ><a href="https://www.home.saxo/campaigns/webinars/2021/09/01/taliban-return---former-us-ambassador-interview">We&rsquo;ll do a Macro Reflections think piece on this tmr, as a warm-up to what is going to be an excellent webinar tomorrow (Sep 1 Wed, 2000 SGT / 1400 CET / 0800 ET) featuring the former US Ambassador to Afghanistan, our CIO &amp; Chief Strategist plus our Head of Great China Wealth Management. </a>&nbsp;</span></li> <li ><span >One thing is for sure, if KVP was a US military top brass &ndash; especially in the &lsquo;boots&rsquo; on the ground side for things&hellip; your budget is going to be massacred for years to come. The skeleton closet that is +$2T of squandered US tax payer money is going to be play for months if not years in the American voter&rsquo;s mind &ndash; think documentaries, series, movies, etc. \</span></li> <li ><span >And this is post the Rolling Stone's expose&nbsp;<a href="https://www.rollingstone.com/politics/politics-features/pentagon-budget-mystery-807276/">"The Pentagon's Bottomless Money Pit" </a>that detailed how completely </span><span >unaccountable</span><span >&nbsp;US military spending is. This is an amazing piece. What is likely even more amazing will be the stories coming from Afghanistan... i.e. 10 hummers (+USD 2.2m) get to the country yet only 2 end up making it to their intended destination.&nbsp; &nbsp;</span></li> <li ><span >The Global Militarization theme (long ITA etf ex. Boeing anybody?) that actually came about from Trump&rsquo;s Nationalism &amp; America withdrawing from the rest of the world, is likely to get some jet fuel from all this. Stay tuned to see what our Equity Strategist Peter Garnry &amp; CIO Steen Jakobsen are cooking up on this. &nbsp;</span></li> </ul> <h4 class="heading--4"><span >Fed&rsquo;s Dovish Gambit &ndash; Will NFP come in at above +1M, or sub 400K on the 750K expectations?</span></h4> <ul > <li ><span >Snowflake Powell &ndash; KVP was chatting to one of the most experienced &amp; profitable currency traders out there earlier on today (lets call him/her Redemption). So Redemption says (paraphrasing here), Powell is shuffling around like he&rsquo;s walking on egg shells. And this is just around the damn taper (taking out QE that was put in from a black swan shock, that is no longer in place), it&rsquo;s not even about a +25bp hike. The guy has the backbone &amp; foundation of a Snowflake. And you know what, Redemption is not wrong. </span></li> <li ><span >Jun 5<sup>th</sup> saw an obviously very dovish Powell, forced to acknowledge that inflation was an issue as the Fed shifted slightly to the hawkish side &ndash; i.e. he did not wait for jobs data to come in higher, rising inflation in the US forced his hand. </span></li> <li ><span >This time around, it looks like he is once again banking on the time decay saving him, i.e. signs of inflation reversing. It&rsquo;s a dangerous gambit &ndash; especially if we get NFP numbers coming in at +900K or even +1m &amp; ISMs holding up. We may end up getting a reversal of the risk-on ripple that cascaded from Friday&rsquo;s Jackson Hole. </span></li> </ul> <p ><span >Time to be shorting US Duration?... as Gold ignores collapsing Real Yields</span></p> <ul > <li ><span >KVP wants to be short duration all across the US curve&hellip; where is the sweet spot? </span></li> <li ><span >Hmmm&hellip; 5s could be getting set-up for the break to 1.5% from these 0.76% lvls for a more tactical move, naturally for a strategic horizon got to be 10s&hellip; if they ain&rsquo;t buying, they are adding to supply baby&hellip; &amp; that synthetic pull on QE, should be a synthetic push on QT<br /> <br /> <img height="229" alt="Snowflake 5s" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/snowflake-5s.png" /><br /> </span></li> <li ><span >Lastly on gold 1816 +0.31%, despite real yields crashing by c. 10bp to -1.84% post JH, the yellow stuff is struggling to break out higher. &nbsp;</span></li> </ul> <p ><strong><span >Recent Works to Keep In Heavy Rotation</span></strong></p> <ul > <li ><span >Peter Garnry, Equity Strategy: <a href="https://www.home.saxo/content/articles/equities/is-it-time-to-buy-chinese-technology-stocks-25082021">Is it time to buy Chinese technology stocks?</a> <br /> <br /> &ldquo;Our Chinese Consumer &amp; Technology basket is the worst performing basket this year due to the ongoing technology crackdown in China. Many investors are asking us whether it is time to buy Chinese technology stocks? The short answer is no. Chinese technology stocks are currently trading at a discount to US technology stocks for good reasons and as long as this discount persists we think investors should focus on Chinese consumer stocks and get exposure to technology in the US. Finally, we take a look at Facebook and Tencent as both companies are pivotal for technology sentiment in the US and China.&rdquo;</span></li> <li ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21,&nbsp; vs their Global Counterparts especially in &lsquo;Merica.</span></li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP<br /> </span><span ><br /> Dragon Interviews: </span><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos" >Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a><span ><br /> </span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Tue, 31 Aug 2021 09:00:00 Z2021-09-21T10:55:16Z{2A6F7EA4-CA9D-48D4-9F1E-DB974A64A413}https://www.home.saxo/en-mena/content/articles/macro/md-mon-30-aug-2021-30082021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 36: Post Jackson Hole, US NFP Fri, Final PMIs Month-End, Afghanistan-End?<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3" >Macro Dragon WK # 36: Post Jackson Hole, US NFP Fri, Final PMIs Month-End, Afghanistan-End?</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #36&hellip;</span></li> <li ><span >First up, Afghanistan remains top of mind, not just due to Kabul Blast last wk, <a href="https://www.home.saxo/content/articles/macro/md-fri-27-aug-2021-27082021">Macro Strike: Afghanistan Airport blast kills over 70 people, including 12 US Service Members, Biden on the tape...</a> yet the sub 2 days deadline for US to exit the country based upon their agreement with the Taliban. </span></li> <li ><span >KVP will not weigh in on the finger pointing, linear analysis &amp; generally arm-chair expert / keyboard warriors posturing around this&hellip; he will flag two key things to watch out for this wk. </span></li> <li ><strong><span >One:</span></strong><span > <a href="https://www.home.saxo/campaigns/webinars/2021/09/01/taliban-return---former-us-ambassador-interview">Wed, Sep 1 - Please join us next week when we set up a one of a kind webinar on Afghanistan: Return of the Taliban</a> with <a href="https://en.wikipedia.org/wiki/Hugo_Llorens">Former US Ambassador to Afghanistan, Mr. Hugo Llorens,</a> alongside our always excellent CIO &amp; Chief Strategist Steen Jakobsen, who will be hosted by Lester Chan, Greater China Head of Wealth Management. </span></li> <li ><span ><a href="https://www.home.saxo/campaigns/webinars/2021/09/01/taliban-return---former-us-ambassador-interview">So do please sign up</a>, we&rsquo;ve pulled the stops to make this as global as possible across our many clients, offices &amp; time-zones: It will be 2000 SGT, 1400 CET, 0800 ET.</span></li> <li ><strong><span >Two:</span></strong><span > Macro Reflections &amp; thought piece on the entire set of events &amp; parameters.</span></li> <li ><span >Month-end wk, means things could get noisy from a flow perspective across asset classes &ndash; so full settlement of Jackson Hole will likely not be clear until next wk Tues &ndash; as both the US &amp; CA are out on Mon for Labor day. </span></li> <li ><span >And of course, if that was not enough, we got final PMIs on Fri &amp; more importantly for Macro &amp; thoughts around the Fed, NFPs. 750K is was is currently expected, if we get a banger of a number, read +1M&hellip; we could once again see a tidy reversal of the moves we saw last Fri. If we get in-line, probably not much of an effect&hellip; if we get a big miss, sub 500K&hellip; then we could see quite a healthy extension of where we closed last wk.</span></li> <li ><span >It worth noting the big moves last wk from +13% on Brent, to +4.4% on silver, +5% on the Russell, etc&hellip; were a big reversal from the previous wk. So once again, unless your US Big Cap equities (S&amp;P, Nas-100)&hellip; you&rsquo;ve just been range bound for months. &nbsp;</span></li> <li ><span ><a href="https://www.youtube.com/user/KansasCityFed/featured">Jackson Hole - rightly or wrongly</a> - was taken as Risk-On Disco Party by markets, with EQ &amp; CMDs up, volatility/yields/USD down - a big chunk which was reversing the previous wks move that saw risk-off across assets. Powell is still in the transitory inflation camp. The previous link is to the actual recorded speech, <a href="https://www.federalreserve.gov/newsevents/speech/powell20210827a.htm">the transcript can be found here</a>.&nbsp;</span></li> <li ><span >With the next Fed meeting on Sep 22, now likely seen as just a set-up for Nov 3 &ndash; post this wk, attention will fully get back to this $3.5T infra bill. </span></li> <li ><span >From the Asia Pacific, CH &amp; HK equities are still far from our of the clear &amp; the monthly + wkly closes are going to be key to see if we continue to consolidate around the bottom here, break out to new highs, or go from oversold to another -5% to -10% lower. Sentiments continues to be super poor, bearish, with no bull in sight. </span></li> <li ><span >SG has hit +80% of the population being fully vaccinated, which makes us on the Dragon continue to like upside in SGD especially vs. EUR, SEK, JPY &amp; even tactically vs. AUD, USD &amp; NZD. Sydney continues to make new record highs in Covid cases, which likely means the restrictions are not coming off anytime soon (RS &amp; GDP due this wk for AU). </span></li> <li ><span >Oh &amp; our long NOKSEK 0.9915 continues to do well &ndash; loving the price confirmation. </span><br /> <br /> <img alt="" /></li> <li ><span >The "easy" move is to 1.02/1.03&hellip; this puppy was +1.05 pre-Covid. From these 99c lvls (initially flagged this at 97c), KVP would have a wide stop to at least 96c (its a volatility cross with NOK getting a beating on risk-off market moves), with tgts set at 1.02, 1.04 &amp; +1.06. Would have the usual dynamic risk-management of the rubber band stop (i.e. first tgt hit, stop moved to entry, 2nd tgt hit, stop moved to 1st tgt, etc). In addition to chart &amp; price confirmation, the key rationale here is divergence in both inflation &amp; monetary policy in Norway vs. Sweden with Norges bank set to hike in their Sep 23 mtg, whilst the Riksbank is likely on hold for years to come - with inflation in Sweden continuing to lag their Norwegian </span><span >neighbors</span><span >.&nbsp; Key risks are; obviously Norges Bank pulling at RBNZ &amp; blinking before an anticipated hike, falling inflation &amp; growth in Norway, more hawkish Riksbank &amp; spike in PCI in Sweden, general big risk-off in mkts &amp; in particular energy which would weigh heavy on the NOK.&nbsp;</span><br /> <span ><br /> <br /> &nbsp;</span></li> </ul> <h4 class="heading--4"><strong><span >Recent Works to Keep In Heavy Rotation</span></strong></h4> <ul > <li ><span >Peter Garnry, Equity Strategy: <a href="https://www.home.saxo/content/articles/equities/is-it-time-to-buy-chinese-technology-stocks-25082021">Is it time to buy Chinese technology stocks?</a> <br /> <strong><br /> Summary:<br /> </strong> &ldquo;Our Chinese Consumer &amp; Technology basket is the worst performing basket this year due to the ongoing technology crackdown in China. <br /> <br /> Many investors are asking us whether it is time to buy Chinese technology stocks? <br /> <br /> The short answer is no. <br /> <br /> Chinese technology stocks are currently trading at a discount to US technology stocks for good reasons and as long as this discount persists we think investors should focus on Chinese consumer stocks and get exposure to technology in the US. Finally, we take a look at Facebook and Tencent as both companies are pivotal for technology sentiment in the US and China.&rdquo;</span></li> <li ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21,&nbsp; vs their Global Counterparts especially in the US.&nbsp;&nbsp;</span></li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP<br /> </span><span ><br /> Dragon Interviews: </span><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos" >Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a><span ><br /> </span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 29 Aug 2021 23:00:00 Z2021-09-21T11:19:52Z{7E1C1B62-070D-400A-A10E-5A698950CAAD}https://www.home.saxo/en-mena/content/articles/macro/macro-reflections-jh-fri-27-aug-2021-27082021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubproduct-equitiesproduct-forex optionsproduct-forexMacro Dragon Reflections: Potential Trading Pathways Around The Fed's Jackson Hole<div class="article-excerpt">Macro Dragon Reflections - In the latest reflections think piece, KVP takes a look at a few potential pathways & scenarios around the Fed's Jackson Hole event. Including the base case consensus scenario of a conservative & docile Powell, alongside the more interesting tail-side risks to the upside, as well as downside. Which pathways may see the VIX 18.84 jump by +50% to 30, or Gold $1795 crater lower by $100 to retest the recent $1690 lows. Plus there is also a pathway that could set us up for the S&P 500 rising +12% to finish the year above 5,000. </div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon Reflections: Jackson Hole - Potential Trading Pathways </h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Reflections&hellip;</h4> <ul > <li ><span>For those of you that may have missed it, our In-house Economist Christopher Dembik has given a preview of Jackson Hole: <a href="https://www.home.saxo/content/articles/macro/jackson-hole-if-you-dont-expect-much-you-wont-be-disappointed-25082021">If you don&rsquo;t expect much, you won&rsquo;t be disappointed!</a></span></li> </ul> <p ><span >This week's symposium could offer hints on how the Federal Reserve is looking to start tapering its bond purchase programme. But it is unlikely Fed Chair Jerome Powell will give much details on exact taper timing and composition. There is still a debate among officials regarding the macroeconomic impact of the Delta variant and how it could temporarily postpone the start of the taper. Our baseline is that taper could start from November onwards if the pandemic situation evolves favourably in the United States.</span></p> <ul > <li ><span>The event should kick off 10am ET (10pm SG/HK/CST) <a href="https://www.youtube.com/user/KansasCityFed/featured">via the Kansas City Fed&rsquo;s YouTube channel</a> &amp; here is a <a href="https://www.kansascityfed.org/research/jackson-hole-economic-symposium/macroeconomic-policy-in-an-uneven-economy/">link to the program&rsquo;s schedule</a>. </span></li> <li ><span>This highly anticipated event, warrants some Macro Dragon Reflections &ndash; always begun from the principle that there are many pathways, full of all walks of randomness &amp; these are but a few&hellip; <br /> <br /> </span></li> </ul> <h4 class="heading--4" ><strong><span >What is the Consensus View &amp; Feel Around Jackson Hole?</span></strong></h4> <ul > <li ><span>Always tough to say, as consensus view &amp; feel in essence should tell us what is &ldquo;priced in&rdquo; going into the event. And you only whether things are priced in correctly, post the event. Consensus view is also a function of data points, some of which may be very anecdotal or biased given on location (for instance SG crypto holders favour ETH over BTC) &amp; view is not equal to positioning. <br /> <br /> </span></li> <li ><span>When KVP Is bullish, he is long. When he is bearish, he is short. Most of the world will give you 99 views but not one position. So there is views &amp; there is positioning, they are not the same thing. With all that said&hellip; <br /> <br /> </span></li> <li ><span>KVP gets the sense that there is 70% chance, we get a conservative to dovish tone from Powell&rsquo;s Jackson Hole speech later today. Where he will talk up recent delta &amp; growth concerns, likely urging for more time before adjusting monetary policy. <br /> <br /> <br /> </span></li> <li ><span>It also seems to be the case that most folks are expecting Taper to be either a Nov or Dec affair. This leaves us with two broad tail-risk pathways, to the upside &amp; downside for risk-assets. <br /> <br /> <br /> </span><img height="229" alt="Fri VIX" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/fri-vix.png" /><span><br /> <br /> <br /> </span></li> <li ><span>With the VIX at 18.84, with a +12% uplift from last night&rsquo;s sessions &ndash; no doubt linked to the blasts in Afghanistan&rsquo;s Kabul Airport, see our early Fri Asia morning piece: <a href="https://www.home.saxo/content/articles/macro/md-fri-27-aug-2021-27082021">Macro Strike: Afghanistan Airport blast kills over 70 people, including 12 US Service Members, Biden on the tape...</a><br /> <br /> </span></li> <li ><span>So in the base case consensus pathway - We&rsquo;d likely see yields fall back in, the USD lower, real yields lower, volatility lower, equities &amp; commodities higher.<br /> </span></li> </ul> <h4 class="heading--4"><strong><span >Upside Tail Risk?</span></strong></h4> <ul > <li ><span >Lets call its 20% chance, that we get Powell not even mentioning tapering or even better for those with risk-on expressions, he flat-out pushes taper to 2022. <br /> <br /> </span></li> <li ><span >Powell could cite concerns around the delta variant, uncertainty around the economy with Winter in the Northern Hemisphere being in 3-4m (which will be challenging for fighting the virus), not to mention things still being murky around the $3.5T infra bill, debt ceiling &amp; of course the gov budget for the new fiscal year. <br /> <br /> </span></li> <li ><span >He may also want to cite the need to see even more inflation prints &amp; jobs data, citing the fall in retail sales, as well as consumer sentiment. <br /> <br /> </span></li> <li ><span>This &ldquo;Taper pushed to 2022&rdquo; pathway would be super bullish for risk &ndash; we&rsquo;d see equities fly, potentially clocking +3% to +5% on US main indices over the next 1-2wks. <br /> <br /> </span></li> <li ><span>In the scenario where we also later get the $3.5T passed, the S&amp;P 500 would almost certainly be closing above 5,000 from these 4,470 lvls. I.e. +12% uplift. <br /> <br /> </span></li> <li ><span>US dollar would be sold &amp; the DXY could break from these 93.08 lvls through 92.50 to probably test the 92.00 lvl.</span></li> </ul> <p ><span><img height="231" alt="FRI - DXY" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/fri---dxy.png" /></span></p> <ul > <li ><span>Which would almost certainly mean EURUSD 1.1749 getting back above 1.1800, GBPUSD 1.3691 getting to +1.3800 &amp; USDJPY 110.01 to test 109.40 before trying for the 109 lvls. <br /> <br /> </span></li> <li ><span>EM FX complex would rally strongly, as US yields would probably also tighten big time off of this. UST 1.34 getting back to sub 1.25/1.20, 2s at 24bp getting back to sub 20bp, etc. Probably biggest pop potential on FX side are the CMD currencies, in particular NOK, RUB &amp; BRL. <br /> <br /> </span></li> <li ><span>CMDs would have a field day if we got the double fall of the US Dollar &amp; yields, with the likes of Oil &amp; Copper likely leading the pack. Gold will likely be a function of real rates, which should fall.<br /> <br /> </span></li> </ul> <h4 class="heading--4"><strong><span >Downside Tail Risk?</span></strong></h4> <ul > <li ><span >Let&rsquo;s call this 10%, this is the KVP favoured skew despite it being the lower probability path, it likely has the biggest magnitude of potential near-term moves &amp; surprises. There are people who fanatically swear over their dead body, that there is no way in Hell Powell could surprise to the hawkish side. Lets see&hellip; <br /> <br /> </span></li> <li ><span>In this Pathway Powell kicks up that Jackson Hole Zoom session guns blazing&hellip; in the left hand he&rsquo;s got inflation, in the right hand jobs growth&hellip; <br /> <br /> </span></li> <li ><span>&hellip;it&rsquo;s the path of least embarrassment, given that he has been forced to pivot (Jun 5<sup>th</sup>) from being King Dove to wearing a few hawk feathers. He will not flip flop back at the risk of making it that much harder when they have to start to really tighten things . <br /> <br /> </span></li> <li ><span>Powell&rsquo;s stance is tapering is an operational exercise, that should have no impact on the underlying liquidity out there (Reverse Repo is sitting at +$1T) &amp; its not monetary tightening. So lets get this party started with Sep 22 being a live meeting for the Taper to kick off! <br /> <br /> </span></li> <li ><span>He is tired of being underestimated so rather than the $10-15B that folks are expecting the tapering to be, he drops the deuces&hellip; doubling us to $20-30B&hellip; &ldquo;How you like JP now baby?&rdquo; <br /> <br /> </span></li> <li ><span>He&rsquo;ll cite inflation being real &amp; here to stay, jobs are coming back as structural subsidies have dissipated, plus house prices &amp; asset inflation is at ATHs&hellip;. <br /> <br /> </span></li> <li ><span>We need to start letting some air out of this synthetically prices economy that we have inflated since the 2008 GFC. Afterall, the G4 Central Bank balance sheet growth has been growing at a CAGR of +15% since 2008. <br /> <br /> </span></li> <li ><span>For context $1m in 2007 at +15% CAGR is $7m today&hellip; or you know how VCs &amp; start-up founders are going on about their company is a unicorn (+1bn), well $1B today, discounted back 14yrs at 15% CAGR is $141M. Or to put it differently, if you were a $1B unicorn in 2007, the equivalent today at +15% CAGR is $7B&hellip; a unicorn just ain&rsquo;t a unicorn anymore man! <br /> <br /> </span></li> <li ><span>In this &lsquo;Downside Tail Risk&rsquo; pathway, the market will hit the bathroom fast &amp; it ain&rsquo;t for number one. <br /> <br /> </span></li> <li ><span>The US dollar will be Celestial, as its bid up in the risk-off, with DXY jumping from these 93.08 lvls to taking out the recent 93.73 highs &amp; breaking out past the 94 goal posts, to new highs for the year. <br /> <br /> </span></li> <li ><span>This throws EURUSD 1.1750 to well sub of 1.1600 with a screaming test of 1.1500. All currencies will fall against the USD, with the likely exceptions of the CHF &amp; JPY. The likes of AUDJPY, NZDJPY &amp; USDJPY could see -2% to -5% moves in just a handful of trading sessions.<br /> <br /> </span></li> <li ><span>EM FX would be spanked even harder, making for some beautiful carry basket set-ups post the event, say long BRL, RUB, NOK, MXN, USD vs. SEK, CNY, CHF, EUR. <br /> <br /> </span></li> <li ><span>Yields would spike so hard, folks would be hitting refresh on their charts thinking it&rsquo;s a glitch&hellip; so USTs getting to +1.50-1.75%% from these 1.35% lvls. 2S going from current 24bp, taking out the c. 28-29bp YTD highs before breaking into 35-45bp &ndash; massive jump for that part of the curve. The interpretation would be, this is a Fed that is now likely to hike in 2022, instead of say 2023 or 2024 &ndash; they are done messing around. <br /> <br /> </span></li> <li ><span>Real yields would likely scream higher, meaning gold $1793 would be thrown of the Burj Khalifa &amp; shot all the way down to the sidewalk taking out the recent $1690 low. Bitcoin would be beat back through the $40K lvl from these $48-50K range, likely taking us back to the previous $28-40K trading range. <br /> <br /> <img height="231" alt="FRI - Gold" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/fri---gold.png" /><br /> </span><span><br /> <br /> </span></li> <li ><span>Volatility would spike with the VIX 18.84, eclipsing the previous wk&rsquo;s high of c. 25 (yes, do not mistake the mean with variances) with a +50% move to over 30. The volatility in the bond + credit market would be on a whole different stratosphere - it would get REAL. <br /> <br /> </span></li> <li ><span>The weak points in the markets would be at particular risk, with KVP&rsquo;s key concerns (if he was long) being &nbsp;around China &amp; Hong Kong equities (which technically still look very bad &amp; fragile), small &amp; midcap stocks, selective EM markets. The Hang Seng in particular needs to hold above last wk&rsquo;s lower low of 24,581. <br /> <br /> </span><img height="231" alt="FRI HSI" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/fri-hsi.png" /><span><br /> <br /> </span></li> <li ><span>The S&amp;P &amp; Nasdaq could easily come off by -3% to -5% initially before undertaking a full -10% drawdown, which to be frank is nothing considering they are up c. 20% YTD &amp; sitting at ATHs. </span></li> </ul> <p><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex-options">Forex Options</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a></div>Fri, 27 Aug 2021 01:30:00 Z2021-09-21T10:53:10Z{27D1B54B-1022-41AB-915F-59988F4BAC20}https://www.home.saxo/en-mena/content/articles/macro/md-fri-27-aug-2021-27082021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubproduct-equitiesproduct-forex optionsproduct-forexMacro Strike: Afghanistan Airport blast kills over 70 people, including 12 US Service Members, Biden on the tape...<div class="article-excerpt">Macro Strike - We check-in on the breaking news of the blasts in Afghanistan's Kabul airport, which has left over 70 dead including at least 12 US military personnel. The pentagon & Biden have flagged the attacks come from ISIS-K, an Afghanistan faction of the Islamic Terrorist group, who are also enemies of the Taliban. With 5days to the US's Aug 31 exit, this may be a one-off attack or the start of escalating attacks aimed at sparking chaos & conflict between the US & the Taliban. Not Wed Sep 1, will see us host GeoPolitical webinar around the return of the Taliban to Afghanistan, as well as the consequences of this to US foreign policy.</div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Strike: Afghanistan Airport blast kills over 70 people, including 12 US Service Members, Biden on the tape...</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Strike&hellip;</h4> <ul > <li ><span >So super fluid Asia Friday morning start, so story &amp; overview still in progress, but we may be off to a risk-off start to the day&hellip;</span></li> <li ><span >which would leave the Macro Dragon looking for a potential lower USDJPY 110.08&hellip;</span></li> </ul> <p > <img height="227" alt="Flash USDJPY 11008" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/flash-usdjpy-11008.png?h=227&amp;w=469" /><br /> &nbsp;</p> <ul > <li ><span >&hellip; as well as the likes of AUDJPY 79.70 from their current levels. Its also worth noting that whilst USDJPY was basically flat overnight at +6bp, AUDJPY came off by 45bp. </span></li> </ul> <p ><img height="227" alt="Flash AUDJPY 79702" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/flash-audjpy-79702.png" /></p> <ul > <li ><span >Its worth noting that S&amp;P Futures are up +0.12% at 4471.75 in the very early Asia session (0622 SGT/HKT). Whilst Asia Equity futures are looking a little soft pre-market, so by no means screaming risk-off. Likely the real test (of this potential risk-off Asia start skew) will come with the Tokyo &amp; Hong Kong respective opens over the next 1hrs &amp; 3hrs </span></li> <li ><span >The thorn in the Biden administration side that will not go away, just got pushed in deeper, with a blast talking place in Kabul Airport hours ago. In addition to dozens being injured, there are over 70 dead, 12 of whom are US Service Members. The attack seems to have been carried out by ISIS-K, an Afghan faction of the Islamic State terrorist group. </span></li> <li ><span >We&rsquo;ve already seen <a href="https://www.youtube.com/watch?v=yNKUCdaeREc">Biden on TV post the event</a> (34min in), sticking with the 31 of Aug exit day &amp; dropping a few other things: </span></li> <li ><span ><a href="https://www.cbsnews.com/live-updates/afghanistan-kabul-airport-explosion-pentagon-confirms/">"To those who carried out this attack, as well as anyone who wishes America harm, know this: We will not forgive. We will not forget. We will hunt you down and make you pay,"</a> </span></li> <li ><span >Naturally the US is still in exodus mode with thousands of US citizens &amp; Afghan Allies (over 100K taken out in last 2wks), still on the ground. </span></li> <li ><span >So an outright harsh response is almost off the cards, as the potential collateral damage of turning a botched &amp; poorly executed exit strategy, could go from Quasimodo to ground zero</span></li> <li ><span >Its also worth noting there is nothing to suggest Taliban involvement, there are a lot of different factions in Afghanistan &ndash; if not a lot of fragmented factions within the Taliban Umbrella itself. Yet ISIS views the Taliban as an enemy &amp; vice versa. </span></li> <li ><span >It&rsquo;s a very smart strategy of ISIS if their goal is to incite conflict &amp; a kick-off between the Taliban &amp; the remaining US forces, citizens &amp; Afghan Allies. </span></li> <li ><span >Now this could simply be a one-off incident &amp; things calm back down, or it could on the other extreme be the start of a string of more &amp; escalating attacks to coincide with the 5 days left that the US has set to get the hell out of dodge. </span></li> <li ><span >Naturally security &amp; control will be ratcheted up to 11, by both the Taliban &amp; the US forces, yet you don&rsquo;t need suicide bombers to cause havoc, just a few rocket launchers in a country filled with weapons of war, could easily force airplanes to stay grounded &ndash; thereby challenging the Aug 31 exit (which is also my understanding a hard deadline from the Taliban) </span></li> <li ><span >From a longer term horizon, there are likely no long-term effects on cross-assets prices, yet where there is likely huge implications is in regards to US foreign policy in the future, i.e. the probability of American military involvement on foreign shores is likely structurally lower for administrations to come. At the very least, it is going to be very controversial &amp; divisive. </span></li> <li ><span >Wed, Sep 1 -&nbsp;<a href="https://www.home.saxo/campaigns/webinars/2021/09/01/taliban-return---former-us-ambassador-interview">Please join us next week when we set up a one of a kind webinar on Afghanistan: Return of the Taliban</a> with <a href="https://en.wikipedia.org/wiki/Hugo_Llorens">Former US Ambassador to Afghanistan, Mr. Hugo Llorens</a>, alongside our CIO &amp; Chief Strategist Steen Jakobsen, who will be hosted by the always interesting Lester Chan, Greater China Head of Wealth Management. </span></li> <li ><span >And all this on the cusp of Jackson Hole &ndash; which we&rsquo;ll do a separate Macro Dragon piece on. In case you missed our in-house Economist Dembik take, he expects it to be boring<a href="https://www.home.saxo/content/articles/macro/jackson-hole-if-you-dont-expect-much-you-wont-be-disappointed-25082021">: If you don&rsquo;t expect much, you won&rsquo;t be disappointed!</a> &nbsp;&nbsp;</span></li> </ul> &nbsp; <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex-options">Forex Options</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a></div>Thu, 26 Aug 2021 23:00:00 Z2021-09-21T10:56:50Z{FD246549-B9C7-4211-9A9B-C742B796FE2F}https://www.home.saxo/en-mena/content/articles/macro/md-mon-23-aug-2021-23082021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubproduct-equitiesMacro Dragon WK # 35: Does Jackson Hole = Short Gold, Short Bonds, Short CMDs & Short Equities, Long USD & Long Volatility?<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 35: Does Jackson Hole = Short Gold, Short Bonds, Short CMDs &amp; Short Equities, Long USD &amp; Long Volatility?</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #35&hellip;</span></li> <li ><span >Hope everyone had an excellent, restful &amp; productive wkd &ndash; here in SG, where we continue to reopen &amp; are now knocking on hitting +80% of the population being fully vaccinated, it was perk just to be able to be out grabbing some great food &amp; drinks with some inspiring people. Almost felt like a mini-vacation&hellip; </span></li> <li ><span >Before we go into why KVP is short gold above $1780 as we kick off the wk or try to answer </span><span >&ldquo;Does Jackson Hole = Short Gold &amp; Bonds &amp; Commodities, whilst being long the US Dollar &amp; Volatility?&rdquo; </span><span >lets just lay out the wk ahead. (&amp; yes, we will also check-in on Equities, in relation to JH) </span></li> </ul> <h4 class="heading--4"><span ><strong>Week #35: What&rsquo;s likely in store?</strong></span></h4> <ul > <li ><span >Whilst the tailwind themes of the Delta variant, Afghanistan &amp; China assets (Equities, Credit &amp; max uncertainty around regulatory overhang) continue into the last wk of the month, the clear focus from a Macro &amp; Markets perspective will be Jackson Hole. Which kicks off Thu US &amp; extends into the wkd. </span></li> <li ><strong><span >Central Banks:</span></strong><span > BoK 0.63%e 0.50%p</span></li> <li ><span >There are also minutes out this wk on Thu from the ECB (EUR) &amp; Banxico (MXN) &ndash; cons. view there are likely ECB on hold for a while &amp; Banxico turned more neutral post the last two hikes (first of which was a surprise). So any directional skews there could be surprises, yet highly unlikely. &nbsp;</span></li> <li ><strong><span >Small Comment on CBs:</span></strong><span > <a href="https://www.norges-bank.no/en/topics/Monetary-policy/Monetary-policy-meetings/2021/august-2021/">Worth noting that Norges Bank meeting last wk</a>, indicated that they are still on for Sep, which would make them the first G10 CB to hike. </span></li> </ul> <p ><span >&ldquo;The Committee judges that there is still a need for an expansionary monetary policy stance. At the same time, economic conditions are starting to normalise. This suggests that it will soon be appropriate to raise the policy rate from today&rsquo;s level&rdquo;</span></p> <ul > <li ><span ><a href="https://www.home.saxo/content/articles/forex/md-post-rbnz-wed-18-aug-2021-18082021">Yet RNBZ blinking last wk (told you Kiwi skews were looking soft),</a> is likely going to make a lot of market participants hesitant for any positioning going into a potential hike from say Norges Bank, BoE or BoC. Meanwhile you got places like Brazil, where the CB has hiked by +350bp this year &amp; the currency is breaking to ever weaker levels. <br /> <br /> <img height="231" alt="34 BRL" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/34--brl.png" /><br /> </span></li> <li ><span >At 5.3807 we are now above the 100D &amp; 200D moving averages. Worth noting BZ inflation was last in at +9% &amp; this is a CB that is still hiking &amp; wants to get its policy lifting in before national elections in 2022. </span></li> <li ><strong><span >GeoPolitics &amp; Policies:</span></strong><span > US VP Kamala Harris is in Singapore today with a trip to Vietnam later this wk, South East Asia very much the focus on this US state visit. Cont. media &amp; political party posturing around Afghanistan click bate, as well as signal being sort over the noise in regards to China policy (So far equities &amp; credit are firmly in a bear market). </span></li> <li ><strong><span >Econ data</span></strong><span >: Flash PMIs across the board will be key this Monday. Later in the wk we will have US durable goods, 2<sup>nd</sup> take on 2Q US GDP 6.7%e 6.5%p &amp; on Fri, the Fed fav. PCE index (core 0.3%e 0.4%p, 3.6%e 3.5%p) </span></li> <li ><span >We&rsquo;ll have final GDP out of the EZ 1.5%e/p, GER IFO sentiment, as well as money supply &amp; private loan data. </span></li> <li ><strong><span >Holidays: </span></strong><span >No major bank holidays out there.<strong> </strong></span></li> </ul> <p >&nbsp;</p> <h4 class="heading--4"><span ><strong>So Does Jackson Hole = Short Gold, Short Bonds, Short CMDs, Long the USD &amp; Volatility?</strong></span></h4> <ul > <li ><span >Well so far, let us use the technical term, kinda&rsquo;! </span></li> <li ><span >Last wk saw another mammoth gain for the DXY, as the broader dollar index lifted by +1.1% to 93.50. With AUD -3.2%, NZD -2.9%, NOK -2.5% &amp; CAD -2.4% &ndash; the CMD currencies &ndash; pulled back the most. With JPY -0.2% &amp; CHF -0.2% being the best in the G10 complex. </span></li> <li ><span >EM complex through up some confusion with TRY being the best vs. the USD last wk with TR of +0.8%, whilst MXN -2.3%, BRL -2.4% &amp; ZAR -3.6% secured the bottom of the pack. CNY -0.31% continues to be stable vs. the USD, despite decelerating economy, the zero-covid policy &amp; lockdowns in China, regulatory overhang &amp; at some point a likely accommodative response needs on both the monetary &amp; fiscal policy side. Overall the broader USD EM basket jumped +1.3% to 1158.</span></li> <li ><span >Gold was actually basically flat from a spot perspective at $1781, with silver 23.03 pulling back -3.1% for the wk. </span></li> <li ><span >Oil saw much heavier dent with brent Crude down c. -9% to 62.32. That takes us down about -20% from the c. $77 high set in early Jul. And the chart is look pretty construcive with 200MA at $60.40 &amp; 200WMA at $55.78.<br /> <br /> <br /> <img height="229" alt="34 Oil" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/34--oil.png" /> </span></li> </ul> &nbsp; <ul > <li ><span >Naturally the energy equity &amp; credit names have also gotten a beating, the likes of Petrobras $10.10 [PBR] &amp; PetroChina $2.98 [857 HK] &nbsp;were down -7% to -12% last wk alone. Even the XLE $45.89 energy etf closed down -7.1% for the wk. Blue Chip names such as BP 287.85 -5.7%, Shell 1392.4 -4.6% &amp; Exxon 52.74 -7.1% did not fair much better. </span></li> <li ><span >Narrative right here is likely blend between slower China &amp; more challenging delta variant/covid strategy, is pushing back the reopening trade. </span></li> <li ><span >KVP has been a mega bull since pre-elections last year on energy &amp; no doubt about it, the &lsquo;easy&rsquo; part of the leg has played out. So whilst still structurally bullish, factors such as JH, debt ceiling, the passing/failing of the $3.5T infra bill &amp; how soon do we get a China policy response will really dictate signal over current noise &amp; sentiment. </span></li> <li ><span >Its worth also noting as we get closer into year end 2021, we get the reverse of winter encroaching on the Northern Hemisphere vs Summer coming into the Southern Hemisphere (Advantage NZ &amp; AU). For now, unless one has a long-only &amp; strategic horizon mandate, stick to the technicals &amp; charts, as fundamentals are being ignored. </span></li> <li ><span >Volatility has clearly been in the party, with the VIX jumping +20% last wk to close at 18.56, yet we did make a wkly high of 24.74 &ndash; so do not mistake the mean for the variance, its choppy beneath the surface. </span></li> <li ><span >Particularly with CH &amp; HK equities&hellip;. For instance this Mon morning JD Health International (pharmacy chains) is up +11% at c. 64.25, yet the name is down -57% YTD &amp; just -36% in last month alone.<br /> <br /> <br /> <img height="231" alt="34 HSI" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/34--hsi.png" /> </span></li> </ul> &nbsp; <ul > <li ><span >HSI $24,950 closed last wk down -5.84% we are making new lows &ndash; and this after a rare -10% pullback last month (which has only occurred 4% of the time since the start of 2009). So yes we are oversold, there are a lot of cheap, one of a kind businesses out there, likely with excellent yield, but that does not mean the lows are in yet. </span></li> <li ><span >We are almost certainly going to be getting a signal from Powell on when we can expect the taper program to be announced &amp; started, i.e. an indication of whether Sep 22 is live, or its on the consensus Nov 3 meeting. It&rsquo;s a path of least embarrassment now for the Fed, if they don&rsquo;t talk about the taper at JH, then we could see a big crash lower in yields (reversal in the real rates spike we have seen), spike in gold &amp; risk assets in general &ndash; all things that could make any tapering announcements that much more volatile later. </span></li> <li ><span >KVP likes to start this wk with a short gold skew, its lagging the big spike in real rates which he feels should be well held going into JH. Would keep this simple short from these $1780/1790 lvl, with a stop at above 1806 / 1812, targeting 1/3 at 1725, 1/3 south of 1700 &amp; let the balance run on a trailing stop of $20-30. Would also adjust the stop loss to entry on tgt one being hit, then to a trailing stop loss of 20-30 on tgt 2 being hit.<br /> <br /> <br /> <img height="464" alt="34 Gold" width="468" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/34--gold.png?h=464&amp;w=468" /> </span></li> </ul> <ul > <li ><span >Any massive reversal &amp; breakdown in real rates, i.e. from these -1.70% lvs back to say -1.90%/-2.00% lvls would also result in the closing of the trade. End of the day, this is a play on the gold price needing to move lower to catch up with the spike in higher real rates. </span></li> <li ><span >He also continues to like being long SGD (re-opening play, vaccination almost +80%, upgraded strategy on operating in a covid-world) vs. the likes of EUR, SEK &amp; on the other side of JH, vs. CHF &amp; JPY. </span></li> </ul> <h4 class="heading--4"><strong><span >Recent Works to Keep In Heavy Rotation</span></strong></h4> <ul > <li ><span >Hardy weighs in with a <a href="https://www.home.saxo/content/articles/macro/warning-brief-as-market-selloff-risks-may-be-at-highest-since-pandemic-outbreak-19082021">Warning brief: market sell-off risks may be at highest since pandemic outbreak</a>. &ldquo;We are at the end of the post-pandemic policy cycle and this brings with it the potential for a period of significant transitional volatility. This article is an abridged set of points looking at the evidence that the broader market is at risk of rolling over significantly in coming days and weeks and what investors can do to generally risk market exposure.&rdquo;</span></li> <li ><span ><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook">Viva la Revolucion! Saxo 3Q Outlook is out</a> &ndash; make some time for it, we touch on the green revolution that is here to stay &amp; having a structural impact on European Politics. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21,&nbsp; vs their Global Counterparts especially in &lsquo;Merica. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/macro/reflections-thu-24-jun-2021-25062021">Macro Dragon Reflections: Brazil, Commodity Rich, +210M pop, +$1.4T GDP, Hawkish BCB, 2022 Political Elections &amp; Consistently Punching Below its Weight. Love it!</a> </span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></span></li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a></div>Sun, 22 Aug 2021 23:00:00 Z2021-09-21T11:13:40Z{922EB8A6-6826-483D-837F-BA4A642CFEC1}https://www.home.saxo/en-mena/content/articles/forex/md-post-rbnz-wed-18-aug-2021-18082021Kay Van-Petersenproduct-forexcurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX Technicalforex-usdrubproduct-macroFX PositioningFX CarryMacro-FXforex-audnzdMacro Dragon: RBNZ blinks as it keeps rates on hold at 0.25%, following the nation-wide lock-down announced on Tue over one covid-case in NZ<div class="article-excerpt">Macro Dragon checks back in on the RBNZ rate decision to leave rates unchanged at 0.25%, which is a big difference from the hikes expectations from just earlier this wk - with the key caveat being the covid-case that has taken NZ to a country wide shutdown. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon:&nbsp;RBNZ blinks as it keeps rates on hold at 0.25%, following the nation-wide lock-down announced on Tue over one covid-case in NZ</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> </h4> <h4 class="heading--4" ><strong><span>Top of Mind&hellip;</span></strong></h4> <p class="Default" ><strong><span > </span></strong></p> <ul > <li ><span ></span> <ul > <li ><span ><a href="https://www.home.saxo/content/articles/forex/md-wed-18-aug-2021-18082021">So KVP's view that the RBNZ was going to hike was wrong</a>, looks like the RBNZ has blinked &amp; folded on what was previously signaled&nbsp;as a potential series of hikes&hellip; which would have made them the first G10 central bank to hike on the other side of the Covid pandemic. So looks like that honor may have to fall on Norges Bank or perhaps the BoE or BoC.</span></li> <li ><span >The Covid-shuffle continues&hellip; remember.. &ldquo;3 steps fwd, 2 steps, shuffle to the left, the shuffle to right&hellip;&rdquo;</span></li> <li ><span >Its astounding to the Macro Dragon, that somehow the RBNZ was &nbsp;expecting to never have to encounter a covid outbreak again, let alone lockdown&hellip; for a measly +25bp hike, yet pretty much clearly point out themselves that employment is running at a maximum sustainable lvl, house prices are up (talk to any kiwis about property prices let alone trying to get builders &amp; handypersons), yet somehow they extrapolate on a lot of inflationary pressures being one-offs&hellip; hmmm&hellip; </span></li> <li ><span >This is likely another clear signal that NZ is massively behind where it needs to get to opening up its economy, ramping up its vaccine penetration (sub 20% for fully vaccinated) &amp; learning that the hammer + dance strategy is not a long-term viable solution&hellip; </span></li> <li ><span >It may also be interpreted as the RBNZ know something else that the rest of the mkt does not, perhaps we have a longer lock down on the cards in NZ than planned... its looking like now we have 6 cases, but potentially also traces to social areas like pubs &amp; clubs which intuitively may already have us in the 50 - 150 range once the tracing ins complete.&nbsp;</span></li> <li ><span >The RBNZ press conference is being interpreted as a hawkish hold&hellip; which KVP has zero idea, of what that actually means. If you are hawkish your are hiking, if your dovish your cutting. If your bullish your long, if your bearish your short.&nbsp;<br /> <br /> <img height="255" alt="Kwi 18 1" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/kwi--18-1.png" /> </span></li> </ul> <ul > <li ><span >Asia morning NZDUSD 0.6747 +0.40% looks set to try to grind up intraday&hellip; whilst AUDNZD 1.0459 -0.26% looks set to go back lower&hellip; <br /> <br /> <img height="255" alt="Kwi 18 2" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/kwi--18-2.png" /><br /> <br /> </span></li> </ul> <ul> <li ><span >From the Macro Dragon side, currently its hard to get back on those bandwagons of being long kiwi&hellip; especially as next RBNZ is not until 6 Oct. And hard to see them raising in between meetings given just how behind the country is on modernizing&nbsp;its strategy to understanding that they have to live with Covid&hellip; the zero-policy response is pure fiction &amp; stale. </span></li> <li ><span >This virus is going to be part of every country&rsquo;s modern day life &amp; annual vaccination run &ndash; one&rsquo;s again big pharma wins.</span></li> <li ><span >Its worth noting we got the key Aussie jobs data on this Thu &amp; the risk is to AU data &amp; policy response overall surprising to the hawkish side vs. their NZ cousins. So far Australia's Sydney&nbsp;(23% of pop) has been in lock-down for close to 8wks &amp; continues to struggle with a surge. Yet as we get towards year end we start to tick towards summer returning to the Southern Hemisphere (&amp; winter in the Northern Hemisphere), which should help in curbing the Covid surge.&nbsp;&nbsp;</span></li> <li >Here is the <a href="https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Monetary%20policy%20statements/2021/mpsaug21.pdf?revision=3627c6fa-6462-453a-af85-06e62f47705c" >link to the RBNZ statement</a></li> </ul> </li> </ul> <p >-</p> <h4 class="heading--4">Dragon Interviews</h4> <ul > <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></span>&nbsp;&nbsp;</li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Usdrub</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>FX Positioning</span> <span>FX Carry</span> <span>Macro FX</span> <span>AUDNZD</span></div>Wed, 18 Aug 2021 07:00:00 Z2021-09-21T11:09:41Z{5F86E9BA-E7E6-4160-BAD6-1F6DCFCBA2D5}https://www.home.saxo/en-mena/content/articles/forex/md-wed-18-aug-2021-18082021Kay Van-Petersenproduct-forexcurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdcommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX Technicalforex-usdrubproduct-macroFX PositioningFX CarryMacro-FXforex-audnzdMacro Dragon Strike Piece: RBNZ expected rate hike on Wed has now picked up noise, as NZ goes into a 3day (initial?) lock-down on one covid case. NZD 0.6917 -1.47% (Tue 17 Aug Piece)<div class="article-excerpt">This Macro Dragon Strike piece was sent yest, yet still very pivotal given RBNZ expected rate hike decision to 0.50% from 0.25%, which would make them the first G10 central bank to hike. For a lot of currency traders its been a tough year, and being long kiwi crosses looked (until the Covid case & shutdown news on Tue) like one of the few signals in an ocean of noise. We could be in for some binary moves in NZDUSD, NZDJPY & AUDNZD based on both RBNZ decision, outlook & of course NZ government on the covid front.<br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon Strike:&nbsp;RBNZ expected rate hike on Wed has now picked up noise, as NZ goes into a 3day (initial?) lock-down on one covid case. NZD 0.6917 -1.47% <em>[Tue 17 Aug <strong>Piece</strong>]</em></h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> </h4> <h4 class="heading--4" ><strong><span>Strike Piece&hellip;</span></strong></h4> <p class="Default" ><strong><span > </span></strong></p> <ul > <li ><span >Please note this piece was originally mailed out yest to our VIPs, due to some technical server issues out of Asia the publishing was delayed to Wed Asia Morning (yet kiwi &amp; factors still around same parameters). Fascinating that we can launch all kinds of rockets &amp; vehicles all the way to Mars, solve all kinds of biological &amp; medicinal challenges, yet connectivity between our different gadgets here on Planet earth, are still suspect. RBNZ will be meeting at 1000 SGT/HKT, 1900 PST, 2200 EST</span></li> <li ><span >Well thank god for lunches, as KVP was going to drop a plain vanilla &ldquo;RBNZ set to be first G10 central bank to hike by at least 25bp on Wed, back the truck up &amp; get long Kiwi&rdquo;&hellip; what a difference a few hours makes</span></li> <li ><span ><a href="https://www.reuters.com/world/asia-pacific/virus-free-new-zealand-investigating-new-community-covid-19-case-2021-08-17/">New Zealand&rsquo;s PM Jacinda Arden has announced a 3-day lockdown after the confirmation of one case of Covid-19 in the community</a> &ndash; so far the strain is unknown&hellip; naturally mkt would fear the delta variant or a new strain. &nbsp;</span></li> <li ><span >But clearly this is the Covid-Shuffle, repeat &amp; sing after KVP&hellip; &ldquo;we take three steps fwd, two steps back, shuffle to the left, then shuffle to the right&hellip;&rdquo; </span></li> <li ><span >Immediate reaction has been some clearing of the Kiwi longs, with NZDUSD &amp; NZDJPY down -1.50% (likely oversold for today&rsquo;s session), AUDNZD 1.0531 up +0.75% (for now reversing what seemed to be a run to test 1.04. You have to understand trading currencies in the 21, has been tough&hellip; &amp; this was supposed to be one of the fewer clearer signals out there. </span></li> <li ><span >In between starting to write this piece &amp; two conference calls, we are already back off the 0.6907 lows to 0.6930 -1.27%</span></li> </ul> <p><img alt="Kiwi 10" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/kiwi-10.png?h=429&amp;w=742" /></p> <p>&nbsp;</p> <h4 class="heading--4" ><strong><span>So what likely next from RBNZ, kiwi crosses &amp; overall NZ direction?</span></strong></h4> <ul > <li ><span >Hard to say to be honest, yet feels intraday oversold&hellip; &amp; definitely think RBNZ still goes on tmr with a hike of 25bp to 0.50% on Wed, 1000 SGT/CST. </span></li> <li ><span >Yet with that said, there is a camp out there, that think RBNZ are going to pullback on their punches, changing back to camp dove &amp; staying put with the rate at 0.25%. </span></li> <li ><span >KVP thinks that the Kiwi&rsquo;s are made of sterner stuff (never came across a Kiwi Snowflake) but hey, if we learnt anything from 2020, it&rsquo;s that anything is possible. </span></li> <li ><span >If they don&rsquo;t hike tmr, then we are taking out 0.6900 &amp; gunning for the 100W MA of 0.6700 &amp; likely then some. &nbsp;</span></li> <li ><span >Still even with a KVP hike scenario, hard to see the RBNZ script &amp; outlook being too hawkish, as the cockroach theory is in play, we know its winter in the southern hemisphere &amp; the delta of this 3day restriction being only 3 days is low (risk is its extended or gets smacked back on for longer, in the near future).</span></li> <li ><span >So its going to be hard to be long kiwi crosses for anything more than an intraday session play&hellip; We could see a knee-jerk move up on a hike (assuming we stay around these 0.6900 lvls when it comes through), which then gets faded &amp; reversed if the lock-down is extended &amp;/or RBNZ file down their Hawkish talons. Naturally if the lock-down is not extended that would be bullish for Kiwi crosses. &nbsp;&nbsp;</span></li> <li ><span >We also know that NZ&rsquo;s (as well as AU) initial strength of isolation, <a href="https://ourworldindata.org/covid-vaccinations?country=NZL">is now its biggest weakness as evidenced by one of the lowest vaccination rates among the DM nations at sub 20%</a> - for contrast SG is sitting at +75% &amp; will likely be above +80% by E-Aug/early Sep &amp; knocking at 90% by year end. </span></li> <li ><span >Bottom line, NZ (&amp; RoW) will need to eventually change their strategy as we&rsquo;ve flagged numerous times in <a href="https://www.home.saxo/en-sg/content/articles/macro/macro-reflections-thu-15-jul-2021-15072021">Macro Dragon Reflections: Is it enough of the Hammer &amp; Dance Strategy &amp; time to just step through the imperfect Covid-Gateway?</a> The zero-policy covid response was a great strategy pre-vaccine&hellip; but its death through a thousand cuts &amp; delaying the inevitable if one does change paths. </span></li> <li ><span >AUDNZD which had been on a big trend lower (given combination of hawkish RBNZ vs. RBA, higher Kiwi inflation vs. Aussie &amp; no need for tapering in NZ, not to mention extended lock-down in Australia) is having a massive reversal back above the 1.05 lvls after potentially gunning for 1.04<br /> <br /> <br /> <img alt="Kiwi 20" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/kiwi-20.png?h=417&amp;w=714" /></span></li> </ul> <ul > <li ><span >Again, skew on this is likely worth revisiting post RBNZ &ndash; tactical short post decision (long kiwi), yet looking to play to long side on cockroach theory (i.e. short kiwi if its going to be more than one case in NZ &amp; the 3-days lock-down will either be extended or smacked back on in the near-term).</span></li> <li ><span ><a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/2021/2021-08-03.html">Here are the link to RBA minutes released today</a>.</span></li> <li ><span >Plus link to last <a href="https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Monetary%20policy%20statements/2021/mpsmay21.pdf?revision=40300a49-908c-49bc-8c22-f8289db90933">RBNZ statement in May</a>. Plus <a href="https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Monetary%20policy%20statements/2021/mpsmay21-briefing.pdf?revision=166e702d-385c-4126-8566-f343bddbecc8">Economic Outlook</a>.</span><span ><br /> </span></li> </ul> <p >-</p> <h4 class="heading--4">Dragon Interviews</h4> <ul > <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></span>&nbsp;&nbsp;</li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Usdrub</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>FX Positioning</span> <span>FX Carry</span> <span>Macro FX</span> <span>AUDNZD</span></div>Tue, 17 Aug 2021 23:00:00 Z2021-09-21T10:43:49Z{30B34BF2-E262-41C6-B4DA-96A69D640DC9}https://www.home.saxo/en-mena/content/articles/equities/reflections-weibo-tue-17-aug-2021-17082021Kay Van-Petersenproduct-equitiesplace-lc/cnTechsector-Technologyproduct-macroMacro Dragon Reflections: Weibo Erns due pre-mkt Wed, we chk-in with ‘the lone bull’ in a China Tech Bear Mkt. WB $50.76 -3.6% o/n +24 YTD<div class="article-excerpt">In our latest Macro Dragon Reflections we check back-in on "The Lone Bull" of the China Tech scene, in the name of Weibo which is still +24% YTD vs the likes of Alibaba, Tencent, Baidu, JD.COM that are down anything from -20% to -23% YTD. Weibo earnings will be out pre-market on Weds & we take a MtM on the short-play skew that was initially flagged on the 12 Jul China Tech Divergence piece. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Dragon Reflections: Weibo Erns due pre-mkt Wed, we chk-in with &lsquo;the lone bull&rsquo; in a China Tech Bear Mkt. WB $50.76 -3.6% o/n +24 YTD</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li >WB $50.76 -3.6%, starting to breakdown, new intraday low of $49.545 hit yest. We originally were flagging this in the high 50s to low 60s lvls. Name is still +24% YTD, vs. say Alibaba, Tencent, Baidu or JD.COM that are down anywhere from -20% to -23% YTD<br /> <br /> <img height="418" alt="WB - Relative chart 17 Aug Update" width="620" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/wb---relative-chart-17-aug-update.png" /><br /> <br /> </li> <li >So actually despite the WB breakdown, relative outperformance wise its still maintaining a ludicrously wide spread of +40% against companies that are arguably some of the best business models &amp; motes in the world. Weibo has cont. to operate in a vacuum <br /> <br /> </li> <li >Worth noting overnight move was on very little volume, under 50% of avg. 1.4M. Generally speaking volume has been abysmal, which leaves KVP thinking its been synthetically kept up&hellip; with real test of this being how name trades after earnings on Weds (pre mkt)<br /> <br /> </li> <li >Suggests to me, when we really puke, need to watch volume explode<br /> <br /> </li> <li >If you look at the daily, next key support is likely the $48-50 lvl, which is also where we starting to break out higher on Jun 23. Naturally the rest of the space has completely crated since then, so that support should not hold from a relative perspective at least.<br /> <br /> <br /> <img height="622" alt="WB Chart 2 Update" width="1009" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/wb--chart-2-update.png" /></li> </ul> <ul > <li >On Weekly its likely $46.815 is an easy takeout lvl of 50% fibo retracement, with the juice of the down move falling in the $37.37 to 42.59 range<br /> <br /> <img height="641" alt="WB Chart 3 Update" width="1008" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/wb--chart-3-update.png" /></li> </ul> <ul> <li ><span >Earnings wise, we know their 1Q figures were strong (low base as per rest of China space, i.e. 1Q20 was ground zero for China economic data). Worth noting that Baidu which recently reported was conservative in regards to 2H figures</span></li> </ul> <ul> <li ><span >Expectations for 2Q21 are at +0.62 EPS (142.5M Net Income), +$524M Revenue, Gross Margin of 83%</span></li> </ul> <ul > <li ><span >On our original </span><a href="https://www.home.saxo/content/articles/macro/macro-reflections-mon-12-jul-2021-12072021" >Macro Dragon Reflections on potential positioning here</a><br /> <br /> </li> <li ><span><strong>&ldquo;From the Macro Dragons perspective the 55 or 50 strike 20 Aug (40D) puts look interesting at a premium outlay of 1.85 and 0.80 respectively, yes the implied vol is high at 51.94 &amp; 59.22 respectively vs. the 30D historical vol of 36.62&hellip; Yet the vol should be well supported&nbsp;<span class="underline; ">if</span>&nbsp;the shares tank. Likely outlay of 25-50bp of risk, so say $25K to $50K premium outlay in a $10M portfolio, with the thesis of potentially making at least +3x to 5x, or +$75K to 250K on that premium outlay.&rdquo;</strong></span></li> <li ><span>The 55 Strike 20 Aug puts are now worth at least 5.20 (5.40 was last offer), with the 50 strike puts now worth at least 1.80 (2.05 was last offer), these are +2.8x &amp; +2.3x returns on initial premium &ndash; which given the trade view was flagged on Jul 12, is great return on an annualized basis (i.e. c. +24x an.). Its also worth noting that we did get to $5.17 on Jul 27<sup>th</sup> on the 55 Strike put, but it was literally for one session, so one would have had to have been super tactical to take some off there. </span></li> <li ><span>So PNL wise that c. $25,000 to $50,000 of premium would be worth anything from $70,300 to $140,500, or c. +0.45% to +0.91% in the $10M portfolio, far from a slam dunk (yet?!) yet still very decent overall pnl contribution. </span></li> <li ><span>The killer here has been the time it takes for the stock to breakdown consistently (we did get to $51.25 in the last wk of Jul, yet the name popped back up), as we have lost quite a bit of time value on the initial premium outlay. </span></li> <li ><span>Its worth noting that vol is likely to come off hard post earnings, for context the 55 &amp; 50 strikes are trading at an implied vol of 105. This compared to their counterpart strikes in the 17 Sep expiries that have an IV of c. 56-58, close to 50% lower. So worth thinking of rolling the maturity for those that have not, as well as potentially rolling down the strikes &amp; maturity (i.e. take profit, yet still leave exposure on). </span></li> <li ><span>Still think there is juice to a &lsquo;proper&rsquo; breakdown that should happen sooner after earnings (which is a key risk, could go either way), but risk continues to be timing, potential bottoming out &amp; bull market on China tech which may damped the relative re-valuation of Weibo vs. its peers. Intuition still suggests we walk in one day &amp; name is easily down -10% to -15%, yet that could just be anchor &amp; confirmation bias talking. </span></li> <li ><span>Let&rsquo;s take a look at the other trade construction around this theme, which was an outright short position on the stock. </span></li> <li ><span><strong>&ldquo;Naturally if the Dragon wanted to be short outright, then he&rsquo;d likely only do so with either a $150K to $65K short position, factoring in for a potential squeeze &lsquo;worst case&rsquo; scenario of the takeover rumor's being true, in which case a move to $90 to $100 on the stock would have a loss of c. -$25K to -$50K (equivalent to the premiums discussed above).&rdquo;&nbsp;</strong><br /> </span><br /> <ul > <li ><span >The directional trade on MtM short from $60.03 to yest close of $50.76, would have netted a profit of +0.23% to +0.10% depending on the size taken &amp; cost of borrow. </span></li> <li ><span >The thing that is hard to measure here, an outright exposure would have been easier to trade around the volatility of the stock &ndash; rather than having to pay out the wide spread on some of the option contracts. We&rsquo;ve had a peak to trough swing of -15% to then +14% to now -15% from around the time the idea was flagged, which would have been easier to trade around that if one was just long the puts or had some put spreads on. </span></li> <li ><span >So whilst one can be tactically trading in &amp; out of super liquid options on say Tencent, it just does not make sense for Weibo. </span></li> </ul> </li> <li >Lets see what tmr&rsquo;s earning &amp; company guidance brings, would expect an analyst question on the <a href="https://www.bloomberg.com/news/articles/2021-07-06/weibo-denies-report-of-plans-to-take-company-private">fake take-over rumour (that were dispelled by the company</a>) that kicked off this bullish vacuum operation from early Jul (despite breakout higher kicking off in mid Jun). <br /> <br /> </li> <li >Everything else being equal - &amp; barring a super bullish earnings &amp; positive outlook, as well as real takeover risks, or/&amp; huge support from China policy makers (which the Macro Dragon believes will materialize at some point in 2H21) &ndash; KVP continues to believe that the easy move on Weibo is to say $40-45, assuming the greater China tech space does not go back to make new lows. So either that lvl or a big breakdown in Weibo, say -10% to -15% over a day or two would likely be used to close off the trade. The Dragon would not leave any Aug expiry options past Wed&rsquo;s session. <span></span><span></span><br /> <br /> </li> <li ><a href="http://ir.weibo.com/news-releases/news-release-details/weibo-reports-first-quarter-2021-unaudited-financial-results">Link to Weibo&rsquo;s 1<sup>st</sup> Quarter Earnings Results.</a> </li> </ul> <p><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>China</span> <span>Tech</span> <span>Technology</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a></div>Mon, 16 Aug 2021 23:00:00 Z2021-09-21T11:03:37Z{4D55EFC3-C480-49D0-9DC0-13B0D95F0A7D}https://www.home.saxo/en-mena/content/articles/macro/md-mon-16-aug-2021-16082021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 34: Nvidia Earnings, RBNZ hikes, FOMC & RBA Mins, Powell Tues, US Retail & Afghanistan<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 34: Nvidia Earnings, RBNZ hikes, FOMC &amp; RBA Mins, Powell Tues, US Retail &amp; Afghanistan</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #3</span><span>4<span >&hellip;</span></span></li> <li ><span>As we switch into the 2<sup>nd</sup> half of Aug, this wk is likely to be dominated by earnings out of the US (including also some key China names like Tencent, ACB, CCB, CLI), we likely have a rate hike from the RBNZ, mins out of the FOMC &amp; RBA, Powell speaking on Tues &amp; the continued finger pointing on Afghanistan as the country &ldquo;falls&rdquo; to the Taliban in a matter of days. </span></li> <li ><span>The continued focus on the Delta variant goes without saying, yet one can easily see how places like China will adjust the indefensible zero-tolerance policy for Covid. May have made sense to be doing the hammer &amp; dance pre vaccine, yet its death through a thousand cuts to think a country can exist in that game for years. <a href="https://www.home.saxo/en-sg/content/articles/macro/macro-reflections-thu-15-jul-2021-15072021">Is it enough of the Hammer &amp; Dance Strategy &amp; time to just step through the imperfect Covid-Gateway?</a></span></li> <li ><span>Singapore itself which is emerging from restrictions is now clocking +75% vaccination rates (both jabs + wks from 2<sup>nd</sup> jab is qualification for being fully vaccinated here), which make you wonder if a stronger SGD is worth taking a look at&hellip; perhaps against the AUD, EUR, SEK or USD? Hmm&hellip; The government here has flagged that its time for a sustainable strategy against a Covid infected world. </span></li> <li ><span>There are no smooth pathways in a covid constrained world, yet there is only one eventual imperfect gateway that all nations have to step through. </span></li> <li ><span>On earnings, <a href="https://www.home.saxo/content/articles/equities/earnings-watch-is-nvidias-growth-impacted-by-semiconductor-constraints-13082021">Garnry weighs in on Chip maker Nvidia as well as the overall robust earnings that we continue to have. He points out that whilst the MSCI world YoY EPS at c. +200% can be explained by a low base from a year ago, the QoQ erns growth is +8.4% or +34% an.</a> With rev growth so far outpacing the growth in costs, which we have seen many companies mentioning inflationary pressures. </span></li> <li ><span>Tue is packed; in addition to RBA mins (likely tail-risk is to the hawkish side, so small delta for stronger Aussie, higher Aussie yields), Powell will be speaking at an educational event, &amp; US retail sales data will also be on the cards. </span></li> <li ><span>The last two Fridays in the US have had knee-jerk reactions of first pushing the dollar &amp; yields higher on the strong NFP beat from 6 Aug (943k a, 870Ke, +88k r with U/r 5.4%a 5.7%e 5.9%p), then taking them lower on 13 Aug due to a UoM sentiment miss 70.2a 81.2e/p. These data points should not have the same magnitude of staying impact on either the USD or US Yields &ndash; the jobs numbers are way more contingent on what the Fed is going to do. </span></li> <li ><span>Its worth digesting that last wk, also saw the first break in a string of 5 month beats in US inflation. US MoM CPI was 0.5%a/e 0.9%p, vs Core that missed 0.3%a 0.4%e 0.9%. The YoY figures actually beat. So the transitory camp gets a bit of straws to hang onto for now. From now until Jackson Hole look out for 2<sup>nd</sup> reading on 2Q GDP, retail sales, IP, Capacity Utilization, Flash PMIs, Personal Spending &amp; Personal Income data. </span></li> <li ><span>It doesn&rsquo;t feel like Powell (Fed) have much wiggle room to turn around, from committing to tapering. The consensus view, &lsquo;seems&rsquo; to be that it will be announced in the Nov 3 meeting. So Jackson Hole or even Sep 22, may be earlier than some expect. From the Dragon&rsquo;s view point, its now the path of least embarrassment from the Fed. Not to mention that the law of large numbers (&amp; no more stemies) favour jobs data accelerating into year end. </span></li> <li ><strong><span >Central Banks:</span></strong><span > </span><span>RBNZ <span >0.</span>50<span >%e</span> <span >0.</span>25<span >%p, </span>BI<span > </span>3<span >.</span>50<span >%e</span>/p<span >, </span>Norges <span >0.</span>00<span >%e/p &nbsp;</span></span></li> <li ><span>RBA mins out on Tue, FOMC Mins out on Wed<span >.</span> Skew on the former is likely to the hawkish side, as the delta variant suppresses the hawks. Skew or more likely focus on the later will be around the usual tapering (hints on timing &amp; structure) &amp; inflation. </span></li> <li ><span>Kaplan could be worth watching as well this wk. </span></li> <li ><strong><span >Econ data</span></strong><span >: </span><span>CH monthly growth data pretty misses across all four metrics of FAI, IP, RS &amp; U/R &ndash; this really should be no surprise, as its been clear for wks now that the world&rsquo;s 2<sup>nd</sup> largest economy is slowing down. On the Macro Dragon (as per our latest quarterly), KVP is expecting a lot more accommodation in China policy into year-end &ndash; which should set-up for a nice divergence from a generally tightening US policy (subject to the $3.5T making it through the House). </span></li> <li ><span>US will have Retail sales, IP &amp; weekly jobs data. AU will have big jobs data on Thu. With retail sales being also thematic in the UK &amp; CA, whereby inflation figures are also due &ndash; as well as the broader EZ block. <span >&nbsp;&nbsp;&nbsp;&nbsp;</span></span></li> <li ><strong><span >Holidays: </span></strong><span>No major bank holidays out there.<strong><span > <br /> <br /> </span></strong></span></li> </ul> <h4 class="heading--4" >Recent Works to Keep In Heavy Rotation</h4> <ul > <li ><span ><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook">Viva la Revolucion! Saxo 3Q Outlook is out</a> &ndash; make some time for it, we touch on the green revolution that is here to stay &amp; having a structural impact on European Politics. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21,&nbsp; vs their Global Counterparts especially in &lsquo;Merica. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/macro/reflections-thu-24-jun-2021-25062021">Macro Dragon Reflections: Brazil, Commodity Rich, +210M pop, +$1.4T GDP, Hawkish BCB, 2022 Political Elections &amp; Consistently Punching Below its Weight. Love it!</a> </span></li> <li ><span>We continue to get hikes from the BSB, yet the real just cannot break out of its trading range! </span></li> <li ><span >Equities: </span><span><a href="https://www.home.saxo/content/articles/equities/earnings-watch-is-nvidias-growth-impacted-by-semiconductor-constraints-13082021">Earnings Watch: Can NVIDIA keep up growth?</a></span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></span>&nbsp;&nbsp;</li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 15 Aug 2021 23:00:00 Z2021-09-21T10:42:26Z{CB65B2BE-3337-400A-9B1B-93785D74B23D}https://www.home.saxo/en-mena/content/articles/macro/md-mon-2-aug-2021-02082021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 32: New Month, Same Noise? Aug likely key events will be US NFP this wk, then US CPI, Powell at Jackson Hole, Debt Ceiling + Delta Variant Shuffle<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 32: New Month, Same Noise? Aug likely key events will be US NFP this wk, then US CPI, Powell at Jackson Hole, Debt Ceiling + Delta Variant Shuffle&nbsp;</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #3</span>2<span >&hellip;</span></li> <li ><span >Have a great </span>start<span > </span>to the new <span >month &amp; wk ahead folks. </span></li> <li >Continuing themes are of course Fed on Tapering [Jackson Hole, Aug 27-28], concerns on Delta variant &amp; level of restrictions-lockdowns coming back (i.e. parts of US blinking with Masks back, etc), US debt ceiling, China regulations, China &amp; HK securities sliding (in particular tech) &amp; wrap up of earnings. &nbsp;</li> <li >August is last full blown summer month in the Northern Hemisphere, so that participation &amp; liquidity is still likely more noise than signal. </li> <li >Wk ahead likely focus on US NFP on Fri, as well as ISM data on Mon &amp; Wed, with final PMIs across the board! </li> <li >China Caixin PMI already in with a miss 50.3a 51.0e, continuing to show that the 2<sup>nd</sup> largest economy keeps cooling off &amp; likely raising the delta (&amp; gamma) of accommodative policy action in the 2H of the year. </li> <li >For context the HSI was down -10% for the month of Jul, its worst monthly drawdown since Oct 2018. Since 2009 (post GFC) the HSI has only had 6 other months of double digit drawdowns or c. 4.3% of the 139 months.<br /> <br /> <br /> <img height="479" alt="3211 HSI" width="680" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/3211--hsi.png" /> </li> </ul> <ul > <li >Point is, we are in an obvious oversold territory &ndash; only thing is, a number of folks, KVP included thought we were there 2-3wks back&hellip; For the Long Side of the book, keep building that line, investing in China has always had regulatory &amp; policy risks, nothing has changed there. </li> <li >So we need a combination of volumes to drop on the down days, natural price consolidation and/or positive policy response, as well as follow throughs on positive price action -i.e. cannot have the Thu massively up to Fri massively down price action that we saw last wk. </li> <li >And yes, sentiment is abysmal &amp; there are no silver lining clouds &ndash; outside of time decay &ndash; that KVP can currently see. So for now, watch the price action &amp; volume. </li> <li >And yes, Weibo [WB $50.40] continues to be up +38% YTD in absolute terms (c. +90% in relative value terms vs. say JD Health Int [6618 HK], or c. +60% vs. Tencent [700 HK]), which is an echoing dislocation that we&rsquo;ve talked about in a number of places:</li> </ul> <p ><a href="https://www.home.saxo/content/articles/macro/md-mon-26-jul-2021-26072021">Macro Dragon WK # 31: The Fed, China Tech [DIDI -42%, Tencent -12% but Weibo +44%!], Earnings from TSLA, AMZN, FB, MSFT plus Robinhood IPO [HOOD]</a></p> <p ><a href="https://www.home.saxo/content/articles/macro/macro-reflections-mon-12-jul-2021-12072021">Macro Dragon Reflections: Divergence in China Tech Names, WB +47% YTD vs. range of -6% to -18% to -27% on Tencent, JD.Com &amp; DiDi</a><br /> <br /> <img height="549" alt="321 China Tech" width="692" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/321-china-tech.png" /></p> <ul > <li >Lastly we continue to see a disconnect between real rates breaking lower at -2%, whilst gold is still failing to push higher at $1811. Meanwhile BTC which had a nice break to c. $42,600 is now back again south of the pivotal $40,000 lvl. Def. watch both of this spaces &ndash; as renewed lockdown &amp; restrictions in the US that spur further fiscal aid (more stemies) would be a boost for risk assets, &amp; in particular crypto &amp; gold (i.e. debasement, excessive debt &amp; diversification theme &ndash; all of which are structural &amp; long-term in nature). &nbsp;&nbsp;</li> <li ><strong><span >Central Banks:</span></strong><span > </span>RBA 0.10% e/p, BSB 5.25%e 4.25%p, BoE 0.10%e/p, RBI 4.00% e/p <span ></span></li> <li >Brazil expected to lean the charge with 75bp hike, could def. do +100bp as inflation keeps going higher with last print at +8.35%a +8.06%p. RBA, BoE &amp; RBI are expected to be a wash. </li> <li >Quite bit of Fed speak, yet likely key will be Vice Chair Clarida speaking at the Peterson Institute on Wed. </li> <li ><strong><span >Econ data</span></strong><span >: </span>US ISM mfg. PMI 60.8e 60.6p, ISM Serv. 60.5e 60.1e, AHE YoY 3.9%e 3.6%p, U/R 5.7%e 5.9%p &amp; NFP 895K e 850 K p. China CPI &amp; PPI will also be key this wk. &nbsp;<span >&nbsp;&nbsp;</span></li> <li ><strong><span >Holidays</span></strong><strong>: </strong>AU is out this Mon on a bank holiday.<strong> <br /> </strong><br /> SG will be out next Mon given <a href="https://www.ndp.gov.sg/about-us/our-beliefs">National Day</a>, Wuhuu!!! KVP&rsquo;s adopted home country turns 56 yrs young! Pretty remarkable that such a young nation &ndash; younger than most people grandparents &amp; even parents &ndash; has achieved so many things that the vast majority of nations have failed to do. Also happy on the developments on vaccine front, knocking on c. 60% who&rsquo;ve received both does, whilst over 75% have received their first. &nbsp;&nbsp;&nbsp;<span >&nbsp;&nbsp;</span></li> <li ><strong><span >Other</span></strong><span >: </span>Yes, yes we are all suffering from Covid Fatigue&hellip; hold the line. This too shall pass. Rather than focusing on what we don&rsquo;t have or cannot control, lets thrive on what we can do &amp; the abundance that we do have. </li> </ul> <p >&nbsp;</p> <h4 class="heading--4"><strong><span >Recent Works to Keep In Heavy Rotation</span></strong></h4> <ul > <li ><span ><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook">Viva la Revolucion! Saxo 3Q Outlook is out</a> &ndash; make some time for it, we touch on the green revolution that is here to stay &amp; having a structural impact on European Politics. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21, vs their Global Counterparts especially in &lsquo;Merica. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/macro/reflections-thu-24-jun-2021-25062021">Macro Dragon Reflections: Brazil, Commodity Rich, +210M pop, +$1.4T GDP, Hawkish BCB, 2022 Political Elections &amp; Consistently Punching Below its Weight. Love it!</a> </span></li> <li ><span >Equities: <a href="https://www.home.saxo/content/articles/equities/value-vs-growth-earnings-season-and-robinhood-ipo-08072021">Value vs. Growth, earnings season &amp; Robinhood IPO.</a></span></li> <li ><span ><a href="https://www.home.saxo/content/articles/equities/value-vs-growth-earnings-season-and-robinhood-ipo-08072021"></a></span><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos" >Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></li> </ul> <p>&nbsp;<span >-</span></p> <p class="text--body"><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p class="text--body"><span >This is The Way</span></p> <p class="text--body"><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 01 Aug 2021 23:00:00 Z2021-09-21T11:02:55Z{683DDD3E-6E30-4271-A897-4FC94F4D47F4}https://www.home.saxo/en-mena/content/articles/equities/tue-erns-watch-aapl-goog-msft-27072021Kay Van-Petersenproduct-equitiescompany-applecompany-microsoftcompany-googleTue Erns Watch: Apple, Google, Microsoft…<div class="article-excerpt">Earnings Watch aims to highlight some of the key names that are in heavy rotation on investors' & traders' radars. We check in on Apple, Microsoft & Google (Alphabet).<br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h2 ><span>Tue Erns Watch: Apple, Google, Microsoft</span></h2> <h4 class="heading--4"><strong >&nbsp;</strong></h4> <h4 class="heading--4" ><strong><span>Overview</span></strong></h4> <br /> <h4 class="heading--4">AAPL<span >: $</span><span >148.99&nbsp;</span><span >Last, $</span><span >2.5T</span><span > Mkt Cap, +</span><span >12</span><span >% YTD, &nbsp;P/E&nbsp;</span><span >28</span><span >x,&nbsp;</span><span >3</span><span >Q&nbsp;</span><span >Est. +$1.01 EPS, Rev $73.8B</span></h4> <ul> <li><span >The one &amp; only Apple, the largest market cap of any </span><span >publicly</span><span >&nbsp;listed company at $2.5T, that is more than 10% the size of the c. $22T US economy. The last quarter's financials saw Apple sitting on +$205B of cash &amp; equivalents on its balance sheet, about a third of Tesla's $630B mkt cap.&nbsp;&nbsp;</span><br /> <br /> </li> <li><span >The 12m consensus price target is c. $</span><span >158 </span><span >in-line with the current $</span><span >148 </span><span >share price, with a range of &nbsp;$</span><span >185&nbsp;</span><span >to $</span><span >115</span><span >. </span><span >Analysts have </span><span >a c. </span><span >76</span><span >% buys in the name<strong>,</strong> vs. </span><span >7</span><span >% sells with the balance being holds at 17%.<br /> <br /> </span></li> <li><span >The name is up c. +</span><span >12</span><span >% YTD and trades at a fwd P/E of 28x. Its got a tini-tiny dividend yield of 0.60% -</span><span ><br /> <br /> </span></li> <li><span >One thing that KVP has yet to understand, is why we don&rsquo;t see even more activist corporate raiders in tech, i.e. they are sitting on so much cash, generate tons of cashflows, they can service a lot of debt - &amp; debt has never been cheaper &amp; is only going to get cheaper.&nbsp;<span >&nbsp;Perhaps Carl Icahn need to give Tim Cook another call to up that divi? At $2.5T mkt cap how fast can you keep growing &amp; innovating?</span></span><span ><br /> <br /> </span></li> <li><span >1yr earning growth are expected to be +</span><span >3</span><span >% for 2022 (</span><span >+58</span><span >% for 2021). For 3Q Erns, e</span><span >st. +$1.01 EPS +57%, Rev $73.8B +24%<br /> <br /> </span></li> <li><span ><a href="https://www.apple.com/newsroom/2021/04/apple-reports-second-quarter-results/">Link to previous quarterly results</a>. (note, apple&rsquo;s quarterlies are not fiscal calendar)<br /> <br /> </span></li> <li><span >Apple </span><span >[</span><span >AAPL</span><span >] results should be out </span><strong><span class="underline; ">after</span></strong> <span >the US markets </span><span >close </span><span >today </span> <p><img height="225" alt="Tue - AAPL" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/tue---aapl.png" /></p> </li> </ul> <p class="text--body" >-</p> <h4 class="heading--4">GOOG: $2792.89&nbsp;Last, $1.8T Mkt Cap, +59% YTD, &nbsp;P/E&nbsp;29, 2Q Est. $22.11&nbsp;EPS, Rev $46B</h4> <ul> <li><span >Yes, yes&hellip; technically Alphabet&hellip; yet the majority of the time that confuses people, as you get a &ldquo;you mean google!&rdquo;. So Google just knocking on the $2T club, as it weighs in at $1.8T.<br /> <br /> </span></li> <li><span >For context that c. 70% of UK or 120% of AU 2020 GDP, or over 5x the GDP of Denmark.&nbsp;&nbsp;</span><br /> <span ><br /> </span></li> <li><span >The 12m consensus price target is c. $</span><span >2,747&nbsp;</span><span >which is in-line with the current $</span><span >1522 </span><span >share price. There is a tight skew to the downside at +4% to -10%, on the 2900 to 2510 forecast range.&nbsp;<br /> <br /> </span></li> <li><span >Similar to a year ago,&nbsp;</span><span >analysts only have</span><span > buys as a rating (100%) in the name. </span><span ><br /> <br /> </span></li> <li><span >The name is up c. +</span><span >59</span><span >% YTD &amp; is similar to a lot of the other big tech names &amp; major equity US indices is making ATH</span><span ><br /> <br /> </span></li> <li><span >1yr erns growth are expected to be +</span><span >11</span><span >% for 2022. For 2Q Erns, </span><span >est. +$22.11 EPS +112%, Rev $46B +46%<br /> <br /> </span></li> <li><span >Link to <a href="https://abc.xyz/investor/static/pdf/2021Q1_alphabet_earnings_release.pdf?cache=0cd3d78">previous quarterly results</a> &amp; <a href="https://abc.xyz/investor/static/pdf/2021_Q1_Earnings_Transcript.pdf?cache=aa96ea2">transcripts</a>.<br /> <br /> </span></li> <li><span >Google/Alphabet's&nbsp;</span><span >[</span><span >GOOG</span><span >] results should be out </span><strong><span class="underline; ">after</span></strong> <span >the US </span><span >m</span><span >arkets </span><span >close </span><span >today </span> <br /> <br /> <img height="225" alt="Tue - GOOG" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/tue---goog.png" />&nbsp; </li> </ul> <p class="text--body">-</p> <h4 class="heading--4">MSFT: $289 Last, $2.2T Mkt Cap, +30% YTD, &nbsp;P/E 35, 4Q Est. $1.92 EPS, Rev $44.3B</h4> <ul> <li> <p><span >Who would have thought that after years of <a href="https://www.bloomberg.com/billionaires/?sref=WtZ2aql3">Bill Gates topping the Billionaire Charts as Numero Uno, today finds him at the #4 slot yet with an ATH of wealth of $151B. The 3-2-1 top slots go to Bernaud Arnault $175B, Elon Musk $180B, Jeff Bezos $212B.<br /> <br /> </a></span></p> </li> <li> <p><span >Microsoft is one of the few companies that can boast being part of the +$2 trillion dollar club (Along with Apple) &amp; at a fwd P/E of 35x could be considered pricey. Yet as per a quip from our equity strategist, the name was also expensive back in the 80s... so this could be an example of company where you get what you pay for.&nbsp;&nbsp;<br /> <br /> </span></p> </li> <li><span >The pandemic has been a massive catalyst for accelerating digitization &amp; remote work, of which name like MSFT have been huge </span><span >beneficiaries</span><span >.&nbsp;<br /> <br /> </span></li> <li><span >Boring = Profitable. Sexy = Competition.<br /> <br /> </span></li> <li><span >Whilst never spoken in the same emotional tones of something sexy like a Tesla or Netflix or Shopify... MSFT is like the quiet professional that shows up day in &amp; day out &amp; executes.<br /> <br /> </span></li> <li><span >In addition to being up for nine years straight (8 of which in double digits), including the last two years that saw +58% in 2019 &amp; +43% in 2020. The name is up +30% YTD.&nbsp;</span><br /> <br /> </li> <li><span >The 12m consensus price target is c. $</span><span >305 </span><span >in-line with the current $</span><span >289&nbsp;</span><span >share price, with a range that skewed to the upside for a +31% to -7% forecast of $378 to $270.&nbsp;</span><span ><strong>Analysts have </strong></span><strong><span >a c. </span><span >91</span><span >% buys in the name, vs. </span><span >0</span></strong><span ><strong>% sells with the balance being holds at 9%.</strong></span><span ><br /> <br /> </span></li> <li><span >The company was last sitting on about $60bn in C&amp;E, with about $23bn in FCF generation.<br /> <br /> </span></li> <li><span >1yr erns growth are expected to be +</span><span >35</span><span >% for 2021 (</span><span >+21</span><span >% for 2020). For 2Q earnings, </span><span >Est. $1.91 EPS <span >+32% QoQ</span>, Rev $44.3B +16% QoQ<br /> <br /> </span></li> <li><span ><a href="https://view.officeapps.live.com/op/view.aspx?src=https://c.s-microsoft.com/en-us/CMSFiles/SlidesFY21Q3.pptx?version=38f02cf6-b826-cb8e-90f0-77c6c93db0ca">Link to previous quarterly results on 27 Apr 21.</a><br /> <br /> </span></li> <li><span >Microsoft </span><span >[</span><span >MSFT</span><span >] results should be out </span><strong><span class="underline; ">after</span></strong> <span >the US </span><span >m</span><span >arkets </span><span >close </span><span >today<br /> <br /> <br /> <img height="231" alt="Tue - MSFT" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/tue---msft.png" /> </span></li> </ul> <p><strong ><span >-<br /> <br /> </span></strong><span >Start-</span><span >to-</span><span >End = Gratitude + Integrity + Vision + Tenacity. Process &gt; Outcome. Sizing &gt; Idea.</span><strong ><span ><br /> </span></strong></p> <p ><span >This is the way </span></p> <p><span >KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>Apple</span> <span>Microsoft</span> <span>Google</span></div>Tue, 27 Jul 2021 08:00:00 Z2021-09-21T10:51:27Z{02FE868F-473A-4A34-AF87-3ADADFDFCBB5}https://www.home.saxo/en-mena/content/articles/equities/erns-watch-tesla-aftmkt-mon-26-jul-21-26072021Kay Van-Petersenproduct-equitiescompany-appleFX Technicalcompany-tesla motorscompany-amazon.comcompany-netflixcompany-facebook incMon 26 Jul 21: Tesla's 2Q Earnings due After-Mkt <div class="article-excerpt">Erns Watch aims to highlight some of the key names that are in heavy rotation on investors' & traders' radars. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h2 class="heading--2"><span>Mon 26 Jul 21: Tesla's 2Q Earnings due After-Mkt&nbsp;</span></h2> <h4 class="heading--4"><strong >&nbsp;</strong></h4> <h4 class="heading--4" ><strong><span >Overview<br /> <br /> Tesla: $643.38 Price, Mkt Cap $620B, -10% YTD, P/E 100x, 2Q $0.974 EPS, Rev $11.4B</span></strong></h4> <ul > <li><span >With the stock down close to 10% YTD &amp; down -30% from its ATH of $900, its likely worth bearing in mind that Tesla finished 2020 up +743% (from $83 to $705) &amp; joined the S&amp;P 500 index.&nbsp;<br /> <br /> <img height="225" alt="TSLA YTD chart 2021" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/tsla-ytd-chart-2021.png" /><br /> <br /> </span></li> <li><span >Whether you are an absolute fanatic about the company &amp; its esoteric founder... love it or hate it, Tesla's earnings are always a key event during the reporting season. Think the 100M sprinting event in the Olympics.&nbsp;<br /> <br /> </span></li> <li><span >To add to this mix, similar to <a href="https://www.forbes.com/sites/chuckjones/2021/06/30/microstrategys-stock-is-tied-to-bitcoins-success-or-failure/?sh=28f694172450">MicroStrategy [MSTR]</a>, the market will be looking to see how Tesla's accounts for its Bitcoin purchase - which interestingly enough is correlating to the Mon Asia session seeing Bitcoin $ 38,355 flying by +11% &amp; now being up c. +21% over the last 5 trading days.&nbsp;&nbsp;<br /> <br /> </span></li> <li><span >Tesla did recognize a small gain in Bitcoin in its first quarter results, yet for the 2Q BTC is down over -41% to a quarterly close of around $34,585.&nbsp;<br /> <br /> </span></li> <li><span >As always, contribution from carbon credits will also be scrutinized.&nbsp;<br /> <br /> </span></li> <li><span >The name continues to trade expensively at 100x fwd P/E, or c. 68x Price to Cash Flow.&nbsp;<br /> <br /> </span></li> <li><span >2Q EPS est are $0.974 c. +123% QoQ, with Revenue QoQ growth of +88% to $11.4B.<br /> <br /> </span></li> <li><span >Operating profit is expected to make a new high with a QoQ +150% growth to $817M.<br /> <br /> </span></li> <li><span >From a production standpoint (<a href="https://www.sec.gov/Archives/edgar/data/1318605/000095017021000423/tsla-20210702ex99_1.htm">post delivering +200K cars for the first time in 2Q21</a>) investors will be looking for updates on Tesla's plants in Germany &amp; Texas (when do they come on-line), as well as an update on Tesla's strategy in China - in particular given the continued souring of US / CH relations. As well as chip shortage that seems to be impacting everyone in the auto space.&nbsp;<br /> <br /> </span></li> <li><span >Full year expectations for 2021 are c. 865K cars according to Barrons. Given that c. 290K cars were produced in 1H21, the skew for the heavy lift is very much a 2H21 affair. Given renewed Delta variant concerns &amp; pockets of restrictions globally, this could go either way.&nbsp;</span><span ><br /> <br /> </span></li> <li>Analysts have 43% buys in the name, vs. 23% sells with an avg. 12M price target of $624, c. -3% from Fri's close of $643.38. The analyst price range forecasts is wide, ranging from $1,200 (+87%) to $550 (-15%).</li> </ul> &nbsp;&nbsp;<strong ><span >-<br /> <br /> </span></strong> <p ><span >Start-</span><span >to-</span><span >End = Gratitude + Integrity + Vision + Tenacity. Process &gt; Outcome. Sizing &gt; Idea.</span></p> <p ><span >This is the way </span></p> <p><span >KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>Apple</span> <span>FX Technical</span> <span>Tesla Motors</span> <span>Amazon.com</span> <span>Netflix</span> <span>Facebook Inc</span></div>Mon, 26 Jul 2021 08:00:00 Z2021-09-21T10:47:45Z{9EDF6E65-12DF-4EFF-A0CC-D32E9B4DDB08}https://www.home.saxo/en-mena/content/articles/macro/md-mon-26-jul-2021-26072021Kay Van-Petersenproduct-macrocurrency-audproduct-bondscommodity-goldFX Technicalforex-usdrubproduct-equitiesforex-usdcadTeslaAmazoncompany-facebook inccompany-googlecompany-microsoftAlibabaMacro Dragon WK # 31: The Fed, China Tech [DIDI -42%, Tencent -12% but Weibo +44%!], Earnings from TSLA, AMZN, FB, MSFT plus Robinhood IPO [HOOD]<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 31: The Fed, China Tech [DIDI -42%, Tencent -12% but Weibo +44%!], Earnings from TSLA, AMZN, FB, MSFT plus Robinhood IPO [HOOD]</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #3</span><span>1<span >&hellip;</span></span></li> <li ><span>Hope everyone had a restful wkd &amp; for those on full blown summer vacays&hellip; enjoy!</span></li> <li ><span>Looks like these summer Fridays are giving us<span > </span>some pretty big spikes, as we saw off the back of those PMIs&hellip; real rates took a big leg lower. <br /> </span><br /> <br /> <img height="464" alt="33 OG gold vs real rates" width="468" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/33--og-gold-vs-real-rates.png" /></li> <li ><span>Suggesting that gold could have an easy pop to the $1850 to $1900 lvl from the c. $1800 Fri close&hellip; if these real rates lvls hold or go lower. </span></li> <li ><strong><span >Earnings</span></strong><span>:<span > Big earnings wk for some of the household tech names, including Tesla, Microsoft, Apple, Alphabet Facebook, Amazon, AMD as well as other non tech names like Caterpillar. </span></span></li> <li ><span >Our equity strategist Peter Garnry is away on some well deserved vacay, so KVP will be QBing on some of the earnings previews, as well as the upcoming <s>robbing the poor to feed the HFTs &amp; Citadels of the world</s> Robinhood IPO. <a href="https://www.home.saxo/content/articles/equities/value-vs-growth-earnings-season-and-robinhood-ipo-08072021">Worth noting Garnry already touched on the Robinhood IPO earlier in the month. Value vs Growth, earnings season, and Robinhood IPO.</a></span></li> <li ><span >Speaking<strong> </strong>of Tech, SNAP $77.97 had a monster up session last wk with a full +24% on Fri (+32% for the wk). Contrast that with DIDI $8.06 that cratered -21% on Fri &amp; -33% for the wk. The name is now down -42% from its IPO strike of $14 &amp; -56% from its high of $18.01. As the China regulators continue to keep the name in their sights, as we previously flagged in the Dragon. There is going to be a LOT of lawsuits, because there is no way that senior DIDI executives, backers &amp; the banks involved in this IPO &ldquo;did not know&rdquo; that this was not greenlighted by China regulators. If you play with the Dragon, you cease to play. </span></li> <li ><span>On separate note, yet similar theme this Asia Mon morning, <a href="https://www.bloomberg.com/news/articles/2021-07-24/china-crackdown-makes-hong-kong-index-world-s-biggest-tech-loser">regulatory overhand continues to push HK shares lower &amp; once again the China tech names</a>, even those without ADRs like Tencent 509 -4.1% (post -6% last wk to 531), Baidu 165.60 -3.6% (post -4.2% last wk to 171.80) &amp; JD.COM 274.60 -5.2% (post -3% last wk to 289.80). </span></li> <li ><span>This despite weekly charts showing that we once again, were trying to make a low. Hard to see what is going to be a catalyst to change the sentiment in the space for now, outside of earnings. Its easy to take a &ldquo;why are the regulators slamming down on these names&rdquo; approach, but the bottom line is, these names would not be the dominant players they are if not for the regulations &amp; entry to barriers to foreign players in the first place. </span></li> <li ><span>Tencent is now c. -35% from its ATH of 773.39, at some point the space is a buy, so far we&rsquo;ve been dead wrong on timing on the Dragon&hellip; yet still plenty of time left for 2H21. At some point would also expect some form of regulatory support in the form of language &amp; guidance, i.e. these names are also held by domestics. Still on ADRs &amp; education names, KVP would steer clear &ndash; <a href="https://www.cnbc.com/2021/07/23/us-listed-china-education-stocks-plunge-as-beijing-regulators-crack-down.html">some of these names dropped by -70% (TAL $6.00) &amp; (EDU $2.93) -54%,</a> </span></li> <li ><span>Kudos to my man JT calling this beautifully&hellip; that&rsquo;s a homerun trade right there. For context $17.50 strike puts purchased on Fri 16 of Jul for c. $1.50, would have yielded you a c. +8x rtn to $11.70. So say 25bp of risk on $10m book, for a premium outlay of $25K, which would have leaped to $195K or c. +2% of one&rsquo;s overall capital in sub 2wks. </span></li> <li ><span>Again, there are always profitable opportunities. And the best thing about trading, investing&amp; life in general &ndash; unlike Pok&eacute;mon &ndash; you don&rsquo;t have to catch them all. </span></li> <li ><span>Meanwhile the screaming dislocated outlier that is Weibo [WB $59.20 -1.8%], continues to stay aloft in a vacuum&hellip; still up +44% YTD at $59.20, despite significantly lower volume. Feels like someone/s are upholding this castle in the sand, or knows something that KVP does not. Still feel we&rsquo;ll close the gap discussed in: <a href="https://www.home.saxo/content/articles/macro/macro-reflections-mon-12-jul-2021-12072021">Macro Dragon Reflections: Divergence in China Tech Names, WB +47% YTD vs. range of -6% to -18% to -27% on Tencent, JD.Com &amp; DiDi</a></span></li> <li ><span>Updated chart below shows the howling dislocation of outperformance of Weibo vs. the rest of the China Tech space. For context against something like Baidu, the relative outperformance is close to +80%, on Tencent closer to +55%. <br /> </span><br /> <img height="729" alt="310 DIDI" width="940" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/310-didi.png" /></li> <li ><span>Only pathways that currently &lsquo;make sense&rsquo; to KVP for the price to be up here are three:</span><br /> <br /> <ul > <ol > <li ><span >Pigs are flying outside &amp; WB is &ldquo;different this time&rdquo; &amp; does not fall under any regulatory concerns of China nor data issues, despite it being a social media &amp; advertising firm. </span></li> <li ><span >Someone knows something we don&rsquo;t around the false take-over rumours, actually being true: <a href="https://www.businesstimes.com.sg/technology/weibo-denies-report-of-plans-to-take-company-private">Weibo denies report of plans to take company private</a>. Or from <a href="http://ir.weibo.com/news-releases/news-release-details/weibo-announces-chairmans-response-certain-market-speculation">Weibo&rsquo;s own website &amp; press release:</a> <br /> <br /> &ldquo;BEIJING, July 6, 2021 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB), a leading social media in China, noted a Reuters article issued today saying the Company's chairman Charles Chao and a state investor are in talks to take the Company private.&nbsp; In response to the Company's inquiry, Mr. Chao informed the Company that the above information is untrue and he has had no discussion with anyone regarding privatization of the Company.&rdquo; </span></li> <li ><span >Weibo is going to have the mother of all earnings beats on Aug 13, when it is expected to announce results. The earnings &amp; revenue expectations of 0.623 cents (+24% QoQ) &amp; $524M (+35% QoQ) are going to be blown straight out the water, fully vindicating the stocks 19x fwd P/E valuation. &nbsp;</span></li> </ol> </ul> </li> <li ><span>As always, could be dead wrong on this&hellip; yet still think the easy move is to close the gap &amp; head to well under $50 from these c. $60 lvls. When names can drop by -20% to -70% on a session, you know the potential is there. </span></li> </ul> <p ><span></span>&nbsp;<img height="227" alt="332 DIDI chart" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/332-didi-chart.png" /></p> <ul > <li ><span>Lastly big baller session Mon morning in Crypto land &ndash; still think we are in bear market price action until a significant break of the $40K lvl &ndash; as Bitcoin 38,395 +11% this morning &amp; c. +20% over the last 5 trading days. Can expect to see the likes of MSTR $539.71 +3.2% &amp; COIN $224.92 -0.0% to fly in the US session, if these gains hold. </span></li> <li ><span>Narrative seems to be more tech CEOs tweeting bullishness on the space, <a href="https://news.bitcoin.com/jack-dorsey-bitcoin-big-part-of-twitters-future-global-currency/">with Twitter &amp; Squares&rsquo; Jack Dorsey say Bitcoin to be a &lsquo;big part&rsquo; of Twitter</a> &ndash; folks, a bull market does not need tweets &amp; talking heads to support it&hellip; let&rsquo;s just leave it at that. For now, its all about respecting the price action if we managed to break out of this $40K to $29K trading range, that has been a series of steadily lower lows &amp; lower highs&hellip; until today at least. </span></li> </ul> <p ><span></span><img height="229" alt="333 Bitcoin" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/333-bitcoin.png" /></p> <ul > <li ><strong><span >Central Banks:</span></strong><span > </span><span>Really all about the Fed&rsquo;s FOMC meeting this Wed &ndash; again it will be about the statement, tone in the Q&amp;A press conference with a focus around tapering. </span></li> <li ><span>Worth noting that since last FOMC the breakout &amp; concerns around the Delta variant have only climbed, plus we have seen a pullback (likely natural post super-hot numbers) in US economic activity. 2Q &amp; almost certainly the 1H21 is going to capture peak growth &amp; the Fed is going to have to measure the risks of restrictions coming back-on, as well as potential bigger than expected pullback in economic data, yet still persistent inflation figures [US Core CPI last months: Apr +3.0% May +3.8%, Jun +4.5%] &amp; improving jobs numbers [over same months +269K, +583K &amp; +850K]. </span></li> <li ><span>On the flipside, one could argue that at some points bad news = positive risk-on price action&hellip; i.e. the more concerns around the delta &amp; the more restrictions we get globally (e.g. Sydney whose pop of 5.3M is c. 21% of Australia&rsquo;s pop, is almost certainly going to extend restrictions that were set to expire this Fri&hellip; with some of our peers anticipating at least another month), the highest the probability of more fiscal stimulative measures, as well as a curb on hawkish central bank pivots. </span></li> <li ><strong><span >Econ data</span></strong><span>:<span > </span>Most key are likely inflation figures out of Australia 3.7%e 1.1%p, Canada 3.2%e 3.6%p, &nbsp;&amp; Russia on Tue<span >.</span> With the first 2Q GDP reading out of the US on Thu &amp; the Fed fav. Core PCE index on Fri. <span ></span></span></li> <li ><strong><span >Holidays:</span></strong><span > </span><span>No major holidays on the radar. <span ></span></span></li> <li ><strong><span>Other</span></strong><span>: <a href="https://edition.cnn.com/2021/07/23/sport/gallery/tokyo-summer-olympics-best-photos/index.html">Enjoy the Olympics folks</a> &amp; watch out for any potential tail-risks out of the US Debt ceiling discussions <a href="https://home.treasury.gov/system/files/136/Debt-Limit-Letter-to-Congress-20210723-Pelosi.pdf">(check out US treasury Yellen letter to Congress)</a>. </span></li> <li ><span>Plus also start to do the work on the rebuilding theme for a flooded Europe &amp; other parts of the globe, any good German infra/builders come to mind? Ping the Macro Dragon. </span></li> <li ><span>Have a great close to the month &amp; wk ahead folks. </span></li> </ul> <p >&nbsp;</p> <h4 class="heading--4"><strong><span >Recent Works to Keep In Heavy Rotation</span></strong></h4> <ul > <li ><span ><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook">Viva la Revolucion! Saxo 3Q Outlook is out</a> &ndash; make some time for it, we touch on the green revolution that is here to stay &amp; having a structural impact on European Politics. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21,&nbsp; vs their Global Counterparts especially in &lsquo;Merica. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/macro/reflections-thu-24-jun-2021-25062021">Macro Dragon Reflections: Brazil, Commodity Rich, +210M pop, +$1.4T GDP, Hawkish BCB, 2022 Political Elections &amp; Consistently Punching Below its Weight. Love it!</a> </span></li> <li ><span >Equities: <a href="https://www.home.saxo/content/articles/equities/value-vs-growth-earnings-season-and-robinhood-ipo-08072021">Value vs. Growth, earnings season &amp; Robinhood IPO.</a> </span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></span></li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>FX Technical</span> <span>Usdrub</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>USDCAD</span> <span>Tesla</span> <span>Amazon</span> <span>Facebook Inc</span> <span>Google</span> <span>Microsoft</span> <span>Alibaba</span></div>Sun, 25 Jul 2021 23:00:00 Z2021-09-21T11:17:31Z{8708812E-E1DC-46C9-A27F-C3B9EFEC9D07}https://www.home.saxo/en-mena/content/articles/macro/md-mon-19-jul-2021-19072021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 30: Asia kicks off the new week solidly in the red, given last wk's EQ risk off, stronger USD, higher bond prices & volatility, as well as divergences in the commodity complex <div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #30: Asia kicks off the wk in the red, as last wk's poor equity price action continues...&nbsp;</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <br /> <ul > <li ><span >TGIM &amp; welcome to WK #</span><span>30<span >&hellip;</span></span></li> <li ><span>WK #29 was a tough one for equities, oil, value &amp; growth bulls. How much of this is a function of the noise from summer in the Northern Hemisphere, as well as concerns around slowing growth (China) &amp; Delta variant surging (Asia, EM, Europe, US) or just overall correction is always impossible to say. </span></li> <li ><span>There was nowhere to hide in either value (BP 292.25 -6.0%, XLE energy etf $48.68 -7.9%, JETS airlines etf $22.42 -6.5%) or growth (ABNB $134.31 -10.2%, COIN $225.01 -11.4%, ARKK etf $116.53 -7.2% ) were down significantly. <br /> <br /> </span><img alt="33 XLE Energy" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/33--xle-energy.png?h=376&amp;w=605" /></li> <li ><span>The WSB complex was also very much on the backfoot, with the likes of AMC $34.96 clocking -24% for the wk on the best volume in 3wks (6x the 12m avg. volume). &nbsp;We are now c. -44% from its ATH of $62.55, the name is still up +1,549% YTD. </span></li> <li ><span>There were few equity exceptions finishing the wk in the green &ndash; notable to see three of the FANGS, Microsoft, Google &amp; Apple finish up anything from +0.90% to +1.75%. The China Tech HK listed names also did well last wk (+3% to +7%), even though most of those gains to perhaps all are at risk of being reversed this Mon. </span></li> <li ><span>Its easier to see what went up last wk: Volatility VIX +14% to 18.45, Bond prices rose (bunds are breaking out higher), the USD rose DXY 92.687 +0.60%. </span></li> <li ><span>There was some divergence in the commodity complex with some of the softs such as Wheat, Corn &amp; Soybean oil having a monster wk from +6% to +12%. </span></li> <li ><span>Yet still the space was dogged by -24% pullback in lumber $536.40, Palladium $2,637 -6.2% &amp; energy: WTI $71.81 -3.7%, Brent $73.59 -2.6%.</span></li> <li ><span>So there is a time for everyone in the market. Currently the equity bears, bond + USD + Vol bulls are in limelight. And we are likely going to be in a chopsolidation until the other side of Labor Day in September when the Northern Hemisphere is fully back in from their summer.</span></li> <li ><span>The majority of the charts &amp; price levels, suggest more the same of what we saw last wk with some critical lvls being broken to the upside &ndash; German bund prices 175.29 &ndash; &amp; to the downside &ndash; AUDUSD at sub 0.7400. </span></li> <li ><span>There are some interesting trends that are worth monitoring for either mean-reversion potential, complete breakdown or for trying to buy the dip. </span></li> <li ><span>Bunds have had 3 straight weekly gains of big prices; +77bp, +47bp, +56bp. So a +1.8% move in German 10yr bonds futures. For context on yields, we&rsquo;ve fone from -0.155% to -0.353%. This raises the stakes for the response to the update from the ECB this Thu on their monetary policy. </span></li> <li ><span>XLE energy etf is now down for 3 straight wk for a total -12% retracement. On top of that, <a href="https://www.ft.com/content/b517d13d-dc7b-4610-b468-7ded0b46d8f7">news over the wkd seems to suggest the OPEX+ Alliance is back on track as UAE is brought back into the fold</a> &amp; we should be back to pre-Covid output in 2023. Looks like the agreement will see +400K barrels added a day from Aug, with a reset on the starting lvls for some of the group. So far energy is down c. -1.5% with WTI $70.82 &amp; Brent $72.53. </span></li> <li ><span>JETS etf $22.42 is now down 7wks in a row, clocking -6.5% last wk for a total retracement of -16% over the 7wks. For context, this etf was trading +$10 higher pre-covid in Feb 2020. We are -22% from post-Covid highs of $28.71.<br /> <br /> </span><img alt="30 JETS" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/30--jets.png?h=320&amp;w=616" /><span><br /> <br /> </span></li> <li ><span>If an ETF is down -12% to -22% from recent post-Covid highs, it likely means there are some single stock names that are down more &amp; worth looking at&hellip; either as relative value plays or buying the dip if one likes the theme. </span></li> <li ><span>The wk ahead is likely going to be a confluence of bearish sentiment being weighed against continued earnings season in the US, with a few of the tech names out to bat this. </span></li> <li ><strong><span>Central Banks:</span></strong><span> The ECB is likely to command attention this wk, given the anticipated update on its monetary policy framework. RBA mins will be out on Tues. </span></li> <li ><span>Russia is expected to hike by another 75bp to 6.25%. Whilst rate decisions out of Indonesia 3.50% e/p &amp; South Africa 3.50% e/p are expected to be on hold &ndash; the first is struggling with the surge in the Delta variant, after never really being in a position to tackle previous strains. And the latter &ndash; perhaps failed state in all but name &ndash; has seen the trial of Zuma open pandora&rsquo;s box of anger, frustration &amp; violence that is the culmination of decades of graft &amp; of course the adversity, stress &amp; devastation that Covid has wrecked on the poor in SA. </span></li> <li ><span>Econ data is fairly light outside of flash PMIs, there are retail sales data due in the UK, AU &amp; CA. </span></li> <li ><strong><span>Holidays:</span></strong><span> SG will be out on Tue, with JP out over Thu &amp; Fri. </span></li> </ul> <p >&nbsp;</p> <h4 class="heading--4"><strong><span >Recent Works to Keep In Heavy Rotation</span></strong></h4> <ul > <li ><span ><a href="https://podcasts.apple.com/gb/podcast/market-adrift-despite-max-support-from-fed-this-week/id1475783610?i=1000529059613">Market adrift despite max support from Fed this week</a>: Recent Market Call Podcast featuring SAXO's CIO &amp; Chief Economist Steen Jakobsen &amp; FX Strategist John Hardy, as they look at factors suppressing US yields, touch on Powell, as well as </span><span >expectations</span><span >&nbsp;around the Fed, Inflation &amp; climate policy </span><span >initiatives</span><span >.&nbsp;</span></li> <li ><span ><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook">Viva la Revolucion! Saxo 3Q Outlook is out</a> &ndash; make some time for it, we touch on the green revolution that is here to stay &amp; having a structural impact on European Politics. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21,&nbsp; vs their Global Counterparts especially in &lsquo;Merica. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/macro/reflections-thu-24-jun-2021-25062021">Macro Dragon Reflections: Brazil, Commodity Rich, +210M pop, +$1.4T GDP, Hawkish BCB, 2022 Political Elections &amp; Consistently Punching Below its Weight. Love it!</a> </span></li> <li ><span>Worth noting one of the exceptional stand-outs in WK #29, was the significant relative outperformance of BRL vs the USD, compared to the rest of the FX complex that generally lost again the US Dollar. </span></li> <li ><span>Total returns on the real were +2.93% vs. the greenback. At 5.1152 USDBRL still has to break &amp; trend lower through the 5.00 lvl &ndash; we had a false break a few wks back, which likely makes it tough to get back into. With that said Aug 3, should still see the Brazilian Central bank hiking by another +75-100bp. </span></li> <li ><span>And flagged to KVP by the &ldquo;Indian Jones of EM&rdquo; is this chart from a <a href="https://twitter.com/RobinBrooksIIF/status/1415603781052600321/photo/1">tweet by @RobinBrooksIIF</a> that highlights that the Brazilian real now has the highest carry of the major EM currencies, supplanting MXN &amp; ZAR 14.43. <br /> <br /> <img height="360" alt="30 BRL" width="384" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/30--brl.png" /></span></li> <li ><span >Equities: <a href="https://www.home.saxo/content/articles/equities/the-cannabis-industry-is-maturing-and-ready-for-more-growth-09072021">Garnry on the Cannabis industry maturing &amp; ready for more growth</a>. </span></li> <li ><span >Equities: <a href="https://www.home.saxo/content/articles/equities/value-vs-growth-earnings-season-and-robinhood-ipo-08072021">Value vs. Growth, earnings season &amp; Robinhood IPO.</a> </span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> </span></li> </ul> &nbsp; <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 18 Jul 2021 23:00:00 Z2021-09-21T11:12:24Z{72100EAA-BEC0-4E27-830E-72CBA230BC11}https://www.home.saxo/en-mena/content/articles/macro/macro-reflections-thu-15-jul-2021-15072021Kay Van-Petersenproduct-macroMacro Dragon Reflections: Is it enough of the Hammer & Dance Strategy & time to just step through the imperfect Covid-Gateway? <div class="article-excerpt">Latest Macro Dragon Reflections, airs the eventual pathway that all countries need to take on, in the perpetual campaign against Covid-19. Perhaps it is time for a final end of the Hammer & Dance Strategy, & just step through the imperfect Covid-Gateway. We need to start to take the 2nd, 3rd & 4th order consequences into account, instead of just focusing on the 1st order effects. You can ride from Covid, but you cannot hide. Sooner or later, we all have to go through that tunnel of turbulence. <br></div><div class="article-rte"><div class="rte--output"><h3 class="heading--3">Macro Dragon Reflections: Is it enough of the Hammer &amp; Dance Strategy &amp; time to just step through the imperfect Covid-Gateway?&nbsp;</h3> (These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.) <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3"><span >Reflections&hellip;</span></h3> <ul > <li >Step into the mind of a young Padawan global macro investor &amp; trader&hellip; &amp; it ain&rsquo;t pretty. The likely best context, that KVP can give for how he views the world&hellip; is varying parts of dislocations, symmetries, positive correlations, negative correlations &amp; generally speaking, just terabytes of noise. The pockets of signals are few &amp; far between. </li> <li >This is why the default MO for the Macro Dragon, is actually do nothing&hellip; keep the ship close to shore. Stay calm, yet dangerous&hellip; </li> <li >&hellip;then what starts to happen in the sea of noise&hellip; things emerge&hellip; dislocations, that start off as &lsquo;interesting&rsquo;, then like a slight itch one wants to scratch, then annoying&hellip; then the volume gets to 11&hellip; &amp; one is like, &lsquo;How can no one else see this?&rsquo; This is so crystal clear!!!</li> <li >Ideas are the paragon of the future always being here, just evenly distributed&hellip; if you are first through the door &amp; get it right&hellip; you&rsquo;re a pioneer. If you don&rsquo;t get it right&hellip; bam, bam&hellip; double tap to the face. Onto the next one&hellip; </li> <li >So this brings us to the screaming dislocation that the Macro Dragon has been stewing on. The end-game of Covid-19&hellip; </li> <li >Back in the beginning of the outbreak in early 2020 (pre Vaccine, pre the numerous fiascos we&rsquo;ve seen, pre Biden, etc), a piece on Medium went viral entitled: <a href="https://tomaspueyo.medium.com/coronavirus-the-hammer-and-the-dance-be9337092b56">The Hammer &amp; the Dance.</a> The premise was countries would have to respond with lock-downs, then reopening, then further lock-downs when there was a surge in cases&hellip; etc&hellip;</li> <li >Being a relative world, all of this made sense at time where everyone was grasping for straws&hellip; However time for an update on that piece&hellip; &amp; its time for folks to put the hammer away &amp; focus on the dancing&hellip; </li> <li >The end-game of Covid-19 is not the proverbial off switch. This virus &amp; future strains are going to be part of the landscape that we are going to be operating on. And we all (governments, citizens, policy makers) have to step through that Covid-Gateway. </li> <li >Its not going to be smooth, pretty, optimal, nor uncontroversial. In fact, that&rsquo;s likely the only guarantee we have here.</li> <li >The end results of going through the Covid-Gateway is a population that is partially vaccinated (potentially upwards of 60% for the richer nations), has partial herd immunity, is 100% going to see a surge in cases &amp; will also see deaths. Yet Net-Net on the other side of the vaccine release date, the deaths are going to be considerably lower. </li> <li >Now if one was a health official or doctor, naturally one would be advocating the Hammer &amp; Dance for the next 1-2-3-5yrs&hellip; this is the adage of a Surgeon wants to always cut&hellip; </li> <li >Now that we have the vaccine, the structural issue with the Hammer &amp; Dance strategy, is that its only focusing on the 1<sup>st</sup> order derivative effects. I.e. keeping the death toll down. </li> <li >Its not measuring the 2<sup>nd</sup>, 3<sup>rd</sup> &amp; 4<sup>th</sup> order effects of the exponential debt that has been created, depression, joblessness, stress, education gaps, rising addiction, rising domestic abuse &amp; the overall vacuum that has been torn into segments of society that actually needed the most amount of help to begin with. </li> <li >And it does not matter if you are Israel, the US, the UK, Taiwan, Australia, New Zealand&hellip; sooner or later it will come to a tipping point of having to walk through that Covid-Gateway. Locking down your country, is just an illusion that delays the inevitable.</li> <li >Covid-19 is like Global Macro, you can run, but you cannot hide&hellip; </li> <li >This is also what the BoJo administration understand &amp; are implementing &ndash; lets hope they can stay the course.&nbsp;</li> <li >So paradoxically, perhaps the new strategy should be GOOD. </li> <li >New surge in infections? GOOD, this needs to happen eventually&hellip; sooner, is better than later. More hospitalizations? GOOD, has to happen &amp; now with the vaccines, the chance of people dying directly from Covid has been greatly reduced. New variant after Delta? GOOD, this is all part of the dance&hellip; lets not be surprised by it, we already have new vaccines to address the newer strains (faster spread, yet less lethal that original strain is actually great). Letting people who have been vaccinated forgo masks &amp; have more flexible travel options? GOOD, this incentives folks to accelerate the vaccine process &ndash; everyone needs to do their part for a functioning stable society. Keep the economy open, regardless? GOOD, the whip-saw closing &amp; opening up, was crucifying whatever businesses that were still hanging on by the skin of their teeth. We can also stop the debt binge that is seeing G4 Central Bank balance sheet expanding at a CAGR of +15% since 2008 (i.e. $1m in 2007 is now +$7m in 2021). &nbsp;&nbsp;</li> <li >Underlying point here, there is no pathway without some form of collateral damage&hellip; yet with Vaccines out &amp; now well over 1.5yrs into this&hellip; we need to start focusing on the 2nd, 3<sup>rd</sup> &amp; 4<sup>th</sup> order consequences of staying in the Hammer &amp; Dance spiral, which are going to be multiples of the 1<sup>st</sup> order costs. </li> <li >All the current strategies are doing is delaying the inevitable. How can, not more people see this screaming dislocation? </li> <li >It will come&hellip; it always does. The future is here, it is just unevenly distributed. </li> </ul> <p >&nbsp;</p> <h4 class="heading--4"><strong><span >Recent Works to Keep In Heavy Rotation</span></strong></h4> <ul > <li > <p class="text--body"><span ></span></p> <p class="text--body"><a href="https://www.home.saxo/content/articles/macro/macro-reflections-mon-12-jul-2021-12072021">Macro Dragon Reflections: Divergence in China Tech Names, WB +47% YTD vs. range of -6% to -18% to -27% on Tencent, JD.Com &amp; DiDi</a></p> </li> <li > <p class="text--body"><span>Reflections piece checks in on the divergence in the China Tech space that seems to be getting headwinds from all parts of the globe. It highlights the short squeeze an incredible sector outperformance on Weibo $60.03, +47% YTD, in some case that relative outperformance being as high as +65% as the rest of the space is firmly in the red YTD. This includes recently listed DiDi $12.03 which is -14% from the IPO strike of $14.00.</span></p> </li> <li ><span ><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook">Viva la Revolucion! Saxo 3Q Outlook is out</a> &ndash; make some time for it, we touch on the green revolution that is here to stay &amp; having a structural impact on European Politics. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21,&nbsp; vs their Global Counterparts especially in &lsquo;Merica.</span></li> <li ><span >Our Dragon Interview series, which should be seeing some new content in this quarter as restrictions ease in Singapore -&nbsp;</span><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos" >Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></li> </ul> <p><span >-</span></p> <p class="heading--4"><span > <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a></div>Thu, 15 Jul 2021 07:30:00 Z2021-09-21T10:57:18Z{E8D52C6B-B7A7-45B3-9B08-A8AA5B3DC735}https://www.home.saxo/en-mena/content/articles/macro/macro-reflections-mon-12-jul-2021-12072021Kay Van-Petersenproduct-macroproduct-equitiesAlibabaMacro Dragon Reflections: Divergence in China Tech Names, WB +47% YTD vs. range of -6% to -18% to -27% on Tencent, JD.Com & DiDi<div class="article-excerpt">Latest Macro Dragon Reflections, checks in on the divergence in the China Tech space that seems to be getting headwinds from all parts of the globe. It highlights the short squeeze an incredible sector outperformance on Weibo $60.03, +47% YTD, in some case that relative outperformance being as high as +65% as the rest of the space is firmly in the red YTD. This includes recently listed DiDi $12.03 which is -14% from the IPO strike of $14.00.<br></div><div class="article-rte"><div class="rte--output"><h3 class="heading--3">Macro Dragon Reflections: Divergence in China Tech Names, WB +47% YTD vs. range of -6% to -18% to -27% on Tencent, JD.Com &amp; DiDi</h3> (These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.) <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3"><span >Reflections&hellip;</span></h3> <ul > <li ><span >TGIF from the Asia Pacific &amp; what a bloody week we seem to be ending on, if you have been an equity bull, bond bear &amp; likely whatever direction you had on the dollar.</span></li> <li ><span >Tuning back into China tech which we have covered a number of times including:</span></li> <ul > <li ><span ><a href="https://www.home.saxo/content/articles/macro/md-mon-5-jul-2021-05072021">Macro Dragon WK #28: RBA, ISM Serv. FOMC mins, China Tech (DiDi)&hellip;</a>&nbsp;&nbsp; </span></li> <li ><span ><a href="http://home.saxo/content/articles/equities/didi-shares-indicated-down-20-on-chinese-regulatory-crackdown-06072021">Didi shares indicated down 20% on Chinese regulatory crackdown</a></span></li> </ul> <li ><span >The overall bloodletting in the space seems linked to DiDi ll-strategized US listing, the name is now down -14% from its $14 strike IPO price &amp; down -33% from its ATH $18.01 lvl </span></li> <li ><span >Where investors are concerned that there is going to be further waves of crackdown on China tech names which was regulatory headwind that was until recently expected to be behind the space given the talks that Beijing had with the likes of Tencent &amp; Alibaba earlier on in the 1<sup>st</sup> half of the year. </span></li> <li ><span >On just last 2 wk alone&nbsp;</span><span >alone the names are down anything from -14% to -6% whether you are talking DiDi, Tencent, Baidu, Alibaba or JD.Com. What makes this even more interesting is that Weibo is up c. +14% over the same period, +24% over the last month &amp; +47% YTD. A clear outperformer to the upside, on a space that has seen prices continue to cave in.&nbsp;</span></li> <li ><span >For context, Tencent &amp; JD.Com are down -6% &amp; -18% YTD&hellip; the outperformance of Weibo is at +53% &amp; +65% respectively &amp; likely has less to do with a superior business model (my equity folks say there is nothing exciting here, company is past its prime), &amp; more to do with <a href="https://www.bloomberg.com/news/articles/2021-07-06/weibo-denies-report-of-plans-to-take-company-private">rumors of privatization (later denied by Weibo company representatives) that sparked a short squeeze over the last few days</a>.</span></li> <li ><span >For context, the avg daily volume of Weibo is 1.5M, on Tue &amp; Wed the stock did 14.4x &amp; 4.4x of this. On Wed it came in at 1.6M pretty much bang in-line with the avg. Before finally closing last wk on Fri at about 2/3 of daily average volume. So if the Macro Dragon 'Weibo squeeze' thesis is correct, we could see the floor disappear under Weibo&rsquo;s stock price over the next 1-2wks with the &lsquo;easy&rsquo; move potentially being to sub $50 from a Friday close of $60.03. </span></li> <li ><span >Note the epic spike in volume, then subsequent petering away after each successive day &ndash; there was something like +13x days of short-interest coverage in the name.<br /> <br /> <img height="239" alt="MR China Tech 10" width="468" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/mr-china-tech-10.png" /> </span></li> </ul> <ul > <li ><span >And note the recent 'gap up' on Mon Jun 6, from c. $54 to $59, which is likely to close over the next 1-2wks. The overall move higher seems to have started from $49.16 on the 23 of Jun. </span></li> <li ><span >The chart below shows once the outperformance of Weibo vs. it peers, +22.1% vs. Tencent [700 HK] at -6.1%, or Alibaba [BABA] at -2.5%... in other words a c. +28% &amp; +25% outperformance in c. 13days<br /> <br /> <br /> <img height="524" alt="CH Tech 20 OG" width="630" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/ch-tech-20-og.png" /></span></li> </ul> <ul > <li >If we look at a chart standardizing the YTD performance below, we see the outperformance is even more extreme. i.e. +53% vs. Tencent [700 HK], +65% vs. JD.Com [9888 HK]</li> </ul> <p ><span ></span><img height="559" alt="CH Tech 30 OG" width="611" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/ch-tech-30-og.png" /></p> <ul > <li >Key risks to short side expression on Weibo are naturally that the speculative take-over rumors of Weibo &ndash; <a href="https://www.bloomberg.com/news/articles/2021-07-06/weibo-denies-report-of-plans-to-take-company-private">which were refuted by company representatives </a>&ndash; somehow end up being true &amp; its taken private at a higher price ($90-100 seemed to be want was indicated). And or the share price stays elevated up until the Aug 13 estimated earnings release where they have blow out numbers that take the stock higher or at the very least allows it to consolidate at these lvls. </li> <li ><span >From the Macro Dragons perspective the 55 or 50 strike 20 Aug (40D) puts look interesting at a premium outlay of 1.85 and 0.80 respectively, yes the implied vol is high at 51.94 &amp; 59.22 respectively vs. the 30D historical vol of 36.62&hellip; Yet the vol should be well supported <span class="underline; ">if</span> the shares tank. Likely outlay of 25-50bp of risk, so say $25K to $50K premium outlay in a $10M portfolio, with the thesis of potentially making at least +3x to 5x, or +$75K to 250K on that premium outlay. </span></li> <li >Naturally if the Dragon wanted to be short outright, then he&rsquo;d likely only do so with either a $150K to $65K short position, factoring in for a potential squeeze &lsquo;worst case&rsquo; scenario of the take over rumor's being true, in which case a move to $90 to $100 on the stock would have a loss of c. -$25K to -$50K (equivalent to the premiums discussed above).&nbsp;</li> <li >Relative value longs vs. short Weibo, could be as a basket or set as a Tencent or JD.Com on the long side.&nbsp;</li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>Alibaba</span></div>Mon, 12 Jul 2021 08:30:00 Z2021-09-21T11:06:03Z{1E2AF6EA-B70A-47F2-B4F6-49AD32AEE66D}https://www.home.saxo/en-mena/content/articles/macro/md-mon-12-jul-2021-12072021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 29: RBNZ, BoC, BoJ, Aussie Jobs, Inflation across US, UK & EU<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3"><span >Top of Mind&hellip;</span></h3> <ul > <li ><span >TGIM &amp; welcome to WK #2</span><span>9<span >&hellip;</span></span></li> <li ><span>Its been brought to KVP&rsquo;s attention that there has been a lot of signals in the world of footie, so hats off to the Argentinians (Messi&rsquo;s Attempt # 4 is charm!) &amp; the Italians. </span></li> <li ><span>Week ahead really going to be about a few things on the macro agenda, especially given the backdrop of heading into full summer in the northern hemisphere. </span></li> <li ><span>We have central bank decisions out of Canada, New Zealand, Tukey &amp; Japan. Whilst the latter should be a wash (after all, they&rsquo;ve fired more silver bullets than anyone), Turkey cont to be the joker card, where despite continued high inflation, we may still see an Erdogan controlled central bank cut rates from the current 19.00%. </span></li> <li ><span>Both RBNZ &amp; BoC have already pivoted towards the less accommodative (move towards normalization) stance, so will be interesting to see the follow through. </span></li> <li ><span>No high convictions views from KVP, yet it likely expected that BoC will give more details around their tapering &ndash; not the CA yield curve had a decent pop on last Fri, after wk that predominantly saw yields tighten considerably. For context, US10s got to 1.2479% before bouncing back higher by 10bp to the current 1.3561% Asia Mon.</span></li> <li ><span>For what its worth AUD &amp; NZD continue to trade poorly. </span></li> <li ><span>Worth noting we also have rate bank decision out of BoK 0.50%e/p as well as Chile +0.75%e +0.50%p.</span></li> <li ><span>We also should be getting an update from the ECB (no rate decision meeting) on their monetary policy framework. </span></li> <li ><span>There is an inflation theme this wk, with CPI prints expected out of the US, EU &amp; UK.</span></li> <li ><span>Asia will also have Aussie Jobs data which can be a banger for Aussie crosses &amp; duration, as well as China 2Q GDP 8.0%e 18.3p%.<br /> <br /> <img height="231" alt="291" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/291.png" /></span></li> </ul> <ul > <li ><span>US Equities continue to break to ATH in the big names, with names like AMZN &amp; AAPL leading the pack&hellip; &amp; lower participation from the SMEs (apart from some names like SNOW)&hellip; as the Russell2000 finished last wk -1.0% vs. +1.8% &amp; +1.1% for the Nasdaq100 + S&amp;P500.<br /> <br /> <br /> <img height="225" alt="292" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/292.png?h=225&amp;w=469" /></span></li> </ul> <ul > <li ><span>We get earnings kicking off this wk in the US (See PG&rsquo;s piece below) which will be started by a number of the financials, before kicking into some of the tech names next wk. </span></li> <li ><span>China tech cont. to be all over the place, we&rsquo;ll publish a Macro Reflections piece on that later this wk (dropped a mail on Fri to our VIPs) &ndash; worth noting the massive drops in volume in Weibo [WB] $60.03 +13.5% last wk, +47% YTD&hellip; that went from c. +13.4x avg. daily volume on Tue to 0.75x avg. daily volume on Fri. The Macro Dragon&rsquo;s take is that the short-squeeze has run its course.<br /> <br /> <br /> <img height="239" alt="293" width="468" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/293.png" /> </span></li> </ul> <ul > <li ><span>The rest of the spaces YTD ranges from -7% on Tencent [700HK, HK$ 525.00] to -18% JD.Com [9618 HK, HK$282.60]. For context Tencent is down over -11% over the last 3 wks.</span></li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 11 Jul 2021 23:00:00 Z2021-09-21T10:50:25Z{C7D338EA-1B05-4075-B83B-67CED5618363}https://www.home.saxo/en-mena/content/articles/macro/md-mon-5-jul-2021-05072021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 28: RBA, ISM Services, FOMC Mins, China Tech (DIDI), 4th of Jul Wkd & SAXO's 3Q Outlook<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 28: RBA, ISM Services, FOMC Mins, China Tech (DIDI), 4th of Jul Wkd &amp; SAXO's 3Q Outlook&nbsp;</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #2</span><span>8<span >&hellip;</span></span></li> <li ><span>Don&rsquo;t want to get to attached to the price action &amp; closes last wk, as we highlighted in the Macro Dragon from WK # 27: <a href="https://www.home.saxo/content/articles/macro/md-mon-28-jun-2021-28062021">Noisy Week Ahead with Month/Quarter/1st Half-end plus NFP Friday!</a></span></li> <li ><span>The US NFP of 850K beat by about +120K from the expected 720K print &ndash; market interpretation on the day was higher equities, lower USD, lower yields &amp; higher CMDs. I.e. the number was from the proverbial burglar story of breaking &amp; entering, a.k.a. Goldilocks&rsquo; &ldquo;just right&rdquo;. Not too hot for a more hawkish Fed, not too cold for a reversal from the Fed. </span></li> <li ><span>So whilst the breaking out of equities to ATHs on BOTH the Nasdaq-100 (FANGs back in force) &amp; the S&amp;P 500, resonates with a low vol environment &amp; still this smooth waters until the 2<sup>nd</sup> half of the 3<sup>rd</sup> quarter. Worth noting a lot of these tech &amp; growth charts looking very bullish, even things like Banana, I mean Apple, are breaking out higher.</span></li> </ul> <p ><span><img height="253" alt="281" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/281.png?h=253&amp;w=469" /></span></p> <p ><span >The moves in the USD, CMD complex &amp; bond market feel a lot more convoluted to KVP at least. Oil cont to be relentlessly strong despite a lack of agreement from OPEC from last wk, with talks extending into this wk.</span></p> <ul > <li ><span>Currencies as a whole cont to be range bound, yet was still an overall wk of USD strength&hellip; &amp; things like BRL almost gave back their gains over the prior 2wks. Incidentally interesting to see crosses like MXN &amp; TRY outperform vs. the EM complex. Despite the USD reversal lower off the NFP print on Friday, generally leaving most USD crosses looking wk on shorter time-frames (daily, hourly, tick)&hellip; the wkly DXY chart is not bearish.</span></li> </ul> <p ><img height="259" alt="282" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/282.png" /></p> <ul > <li ><span>Not much was standing out from a charts perspective FX wise, yet from a contrarian angle, despite delta being lower than when we flagged it two wks back&hellip; upside surprise in Aussie crosses could be interesting given RBA rate decision tmr. Basically one has to weight the hot economy &amp; data, vs. the &ldquo;here we go again lockdowns&rdquo;. </span></li> <li ><span>Don&rsquo;t get me started on the whole hammer &amp; dance &ndash; its screaming dislocation&hellip; we (countries, policy makers, citizens) all have to walk through the same doorway eventually.</span></li> <li ><span>And its doorway that is not perfect, filled with eventual partial vaccination of +50% to +75% of the population, herd immunity, masks being dropped for those that have been vaccinated (incentives drive people folks, we get what we incentivize&nbsp;for &amp; right now globally we have a lot of incentives working <span class="underline; ">against</span> getting vaccinated) &amp; lastly start re-opening borders for travel for folks with vaccines who have tested negative for Covid (drop the quarantines).</span></li> <li ><span>There is no smooth &amp; super safe path out of Covid, it's just the distribution of collateral damage that we all have to take&hellip; the tough medicine now or later? And whilst everyone talks about the death toll cost, no one talks about the cost that literally billions will face on decades lost (shut businesses &amp; jobs that may never be regained), gaps in education &amp; opportunities, stress, etc.&nbsp;</span></li> <li ><span>Australia &amp; New Zealand&rsquo;s initial heralded strength of isolation, is now a weakness&hellip; After all, if there are no infections on a wide scale basis, what's the justification for the broader population to get vaccinated?! So it should be no surprise that NZ &amp; AU vaccine penetration has been abysmal - for context, less than 10% of the population in New Zealand have been vaccinated. <a href="https://www.bbc.com/news/world-australia-57181038">In Australia, its not much better.&nbsp;</a></span></li> <li ><span>Covid is like Global Macro or taking responsibility in your portfolio of life&hellip; you can run, but you cannot hide forever. </span></li> <li ><span>Anyhow, going back to markets&hellip; </span></li> <li ><span>&hellip;China tech &ndash; which we flagged from last wk &amp; love as a 2H laggard, contrarian &amp; underweighted play &ndash; had a great wk, but is running into serious headwinds this morning on the back of the <a href="https://www.theverge.com/2021/7/4/22562912/china-regulator-orders-didi-ride-hailing-app-removed">Didi Chuxing [DIDI, think the Uber or Grab of China] listing in the US last wk which is &lsquo;coincidently&rsquo; running into investigations on the use of private data from Chinese regulators (have ordered app to be removed from App-stores).</a> </span></li> <li ><span>Personally KVP was surprised that they listed in the US in the first place. Name was up c. +17% in first two days, before falling over 5% on Fri on the news of the investigation. Suffice to say, sound like its due for another -5% to -10% easily when the US is back in on Tuesday.</span></li> <li ><span>So clearly the China Tech space starting the wk on some headwinds &amp; the key risk cont. to be political. If one can get comfortable with that they are likely a long &amp; if not, then one should stay away &ndash; unless of course one feels there is a lot more restrictions coming through, in which downside expressions are the way to go. </span></li> <li ><span>KVP still thinks a basket of China Tech ( Tencent, BABA, Baidu, JD.Com, Weibo) likely has a +25% to +50% over the next 6-9 months&hellip; perhaps call options are a way to mng the risk, until there is clarity on some names being in the clear. </span></li> <li ><span>US will be back on Tues, following the 4<sup>th</sup> of Jul wkd. </span></li> <li ><span>Key movers this wk are likely going to be off RBA Tues rate decision, where the delta is low but tail-risk is to hawkish skew (i.e. RBA seeing through the fatigued hammer &amp; stumble).</span></li> </ul> <p ><span><img height="259" alt="283" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/283.png?h=259&amp;w=469" /><br /> </span></p> <p ><span><img height="259" alt="284" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/284.png" /></span></p> <ul > <li ><span>US ISM services, worth noting Mon morning has seen a massive miss on China Caixin Service PMIs 50.33a 54.9e 55.1p. </span></li> <li ><span>We also have FOMC mins on Wed, China PPI|CPI &amp; Cad jobs data on Friday. </span></li> <li ><span>Wishing everyone a phenomenal start to the new month, quarter &amp; an even better 2<sup>nd</sup> half than the 1<sup>st</sup>. Remember there are always opportunities. </span></li> </ul> <h4 class="heading--4"><span >Recent Works to Keep In Heavy Rotation</span></h4> <ul > <li ><span><a href="https://www.home.saxo/insights/news-and-research/thought-leadership/quarterly-outlook">Viva la Revolucion! Saxo 3Q Outlook is out</a> &ndash; make some time for it, we touch on the green revolution that is here to stay &amp; having a structural impact on European Politics. </span></li> <li ><span><a href="https://www.home.saxo/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021">KVP weighs in on a potential Asia investor skew into Europe, looking at the UK as a spin-off from the conglomerate &amp; less effective</a> EU. As well as highlighting China Tech&rsquo;s underperformance in the 1H21,&nbsp; vs their Global Counterparts especially in &lsquo;Merica. </span></li> <li ><span ><a href="https://www.home.saxo/content/articles/macro/reflections-thu-24-jun-2021-25062021">Macro Dragon Reflections: Brazil, Commodity Rich, +210M pop, +$1.4T GDP, Hawkish BCB, 2022 Political Elections &amp; Consistently Punching Below its Weight. Love it!</a> </span></li> <li ><span >Where we highlighted the vast underperformance of Brazilian equities vs. their EM counterparts, as well as the Brazilian Real &ndash; both of which seem set to be breaking out to big levels of appreciation. </span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></span></li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 04 Jul 2021 23:00:00 Z2021-09-21T10:55:31Z{820C0474-58D8-4560-B249-7D4E4ECA195D}https://www.home.saxo/en-mena/content/articles/quarterly-outlook/asia-investors-looking-to-europe-29062021Kay Van-PetersenPrimary-Quarterly OutlookAsia investors looking to Europe, should keep it simple and focus on the ‘spin-off’ that is the UK<div class="article-excerpt">There are a number of potential tailwinds for a long-term bullish stance on UK assets.</div><div class="article-rte"><div class="rte--output"><p>Our Q3 focus is on the structural turning point for Europe, both politically in the landscapes of Germany, and potentially France. We&rsquo;re also looking from a social, policy and long-term investment perspective on sustainability, climate crisis and ESG initiatives. Whilst some of the nuances between the core and peripherals of the eurozone may be lost to investors in Asia, sometimes it pays to keep a simple framework to take out the noise from the complex moving parts.</p> <p>Let&rsquo;s think of the European Union (EU) as a large conglomerate, made up of many different companies that are represented by countries. The likes of Germany and Sweden are companies predominantly focused on exports and industrials, whereas Spain and Greece would be skewed towards the service side of tourism and hospitality. The different economic models of these companies will lead to different needs at different times. This is the challenge behind an EU that is seemingly one on a monetary policy front, yet hugely fragmented on a fiscal and structural policy front.&nbsp;</p> <p>In this analogy, the UK represents the spin-off of one of these companies from the EU conglomerate. Spin-offs give a company the ability to be laser focused on their own objectives and on fulfilling the needs of their stakeholders.&nbsp;</p> <h4 class="heading--4">Risks to the UK Spin-Off</h4> <p>The case for being structurally bullish about UK assets, such as sterling, equities, property and businesses, naturally comes with several running risks.&nbsp;</p> <ul> <li>Hammer and dance calibrations with potential new Covid strains that could continue to delay the economic model getting back to full run rate.<br /> <br /> </li> <li>Something happening to BoJo, who despite critics and fans alike, seems to be the right leader at the right time for the UK. It&rsquo;s unclear whether anyone else could be as popular in shepherding the Conservative Party.<br /> <br /> </li> <li>The border situation in Northern Ireland.<br /> <br /> </li> <li>Reversal in the hawkish tone from the BoE &ndash; we have had some flip-flopping from the BoE earlier this year, even on the other side of Brexit.<br /> <br /> </li> <li>The EU playing hard ball in post-Brexit trade negotiations.<br /> <br /> </li> <li>Levels of debt accumulated in the system as a response to the Covid pandemic.<br /> <br /> </li> <li>A potential increase in competition to London, due to the drain in talent and capex that has gone to the EU.<br /> <br /> </li> <li>A stronger GBP could make it challenging for UK exporters, which the FTSE-100 has in spades.</li> </ul> <h4 class="heading--4">The Layer Cake of Potential Tailwinds for being bullish about UK Assets</h4> <p class="text--body">With those risks in mind, there are a number of potential tailwinds for a long-term bullish stance on UK assets.&nbsp;</p> <ol> <li class="text--body">It&rsquo;s contrarian. Not many people are talking about being long on UK assets &ndash; more than likely this is a result of 4-5 years of the &ldquo;Brexit Tunnel of Turbulence&rdquo;.<br /> <br /> </li> <li class="text--body">This also makes the UK market likely to be one of the most underweighted on a global landscape, as it would have been hard for asset allocators to justify exposure with no way of knowing if it was going to be a soft, hard or amicable Brexit.&nbsp;&nbsp;<br /> <br /> </li> <li class="text--body">Let&rsquo;s not argue over the quality of the divorce; at the end of the day we are on the other side of Brexit&hellip; Keep Calm and Carry On. Bullish markets thrive on less uncertainty rather than more, and being on the other side of Brexit greatly reduces the level of uncertainty that UK businesses, capital allocators and investors have had to contend with for years.&nbsp;<br /> <br /> </li> <li class="text--body">The UK FTSE-100 equity index, now at around 7,000, is one of the few major equity indices that never got back to their pre-Covid levels of 7,500, let alone broke out higher as we have seen on a number of main indices.<br /> <ol> <li type="a" class="text--body">A move to the 7500&ndash;8000 range before year-end would be around a +7% to +14% move from these 7,000 levels.<br /> <br /> </li> <li class="text--body">The FTSE-100 was down 14% for 2020, unlike most equity indexes such as the S&amp;P 500, Nikkei, China A50 and Nasdaq, that were up 16%, 16%, 23% and 44% respectively.&nbsp;<br /> <br /> </li> </ol> </li> <li class="text--body">It&rsquo;s arguably one of the cheaper equity markets globally, for the valuation-focused gals and guys.<br /> <ol> <li type="a" class="text--body">1-yr forward PE on the FTSE-100 is 13x, compared to 20x for the S&amp;P 500 or 24x for the Nasdaq-100, or even the default &ldquo;cheap Japanese equities&rdquo; with a PE of 18x.<br /> <br /> </li> <li type="a" class="text--body">To put it differently, based on 1-yr forward PE, the Nasdaq-100, S&amp;P500 and Nikkei trade at a premium of +84%, +54% and +39% to their UK sister.&nbsp;<br /> <br /> <span></span></li> </ol> </li> <li class="text--body"><span>&nbsp;</span>It&rsquo;s worth noting that despite the epic amount of fiscal and monetary policy support that we saw in the UK, we&rsquo;ve seen much clearer evidence of asset class inflation in places like the US, Canada and Australia, with the UK still lagging.&nbsp;<br /> <br /> </li> <li class="text--body">The FTSE-100 is predominantly an index skewed towards value rather than growth names. It has heavy exposure towards cyclicals like financials and commodities which should do well in an inflation and rates-rising regime. Think BP, Glencore, UK Banks.<br /> <br /> </li> <li class="text--body">Sterling is still at multi-decade lows &ndash; just the 40-year quarterly average for GBPUSD is around 1.60, a +14% (unlevered) move from these 1.40 levels&hellip;&nbsp;<br /> <br /> </li> <li class="text--body">The UK has been one of the leading countries globally on the vaccine roll-out and set the bell curve on 8th December by being the first to approve a vaccine and quickly executing a roll-out strategy. <br /> <br /> This implies two key things: <br /> <br /> One: It showcases the flexibility, autonomy and speed that the UK can move when being outside of the EU&rsquo;s sloth-like speed with its endless miles of red tape and more in-fighting than a UFC weigh-in (just think how France and Belgium have fared in the fight against Covid).<br /> <br /> Two: The UK will emerge out of the Covid-induced savings and lack of activity to some serious spending both by consumers and companies as the economy and the rest of the world opens up.&nbsp;<br /> <br /> </li> <li class="text--body">The BoE has moved from potentially entertaining negative rates around 2020 year-end&rsquo;s Brexit deadline to discussions being around tapering and a more hawkish policy. This should be Sterling bullish.&nbsp;&nbsp;<br /> <br /> </li> <li class="text--body">Say what you want about BoJo (The UK&rsquo;s Teflon Don), yet the Conservative party continues to gain ground and even Covid could not take Boris out. BoJo is the right leader, at the right time for the UK.&nbsp;<br /> <br /> </li> <li class="text--body">The UK has a scarcity factor that cannot be easily replicated anywhere else; there is only one London, one Oxford and one Cambridge, in it&rsquo;s in the sweet time zone between Asia and the Americas. The UK will always be a destination for the global elite in the form of capital, talent, education and demand for assets.&nbsp;&nbsp;<br /> <br /> </li> <li class="text--body">If things deteriorate further on EU relations in the future, the country will make themselves as competitive as they need to be. If they need to be the offshore private banking centre of Europe, they will be the offshore private banking centre of Europe.<br /> <div>&nbsp;</div> </li> </ol> <h4 class="heading--4">2H21 Could Also See China&rsquo;s Lagging Tech Names Climb&hellip;</h4> <p class="text--body">Whilst the US tech giants such as Facebook, Google and Microsoft are pretty close to their ATHs, their Chinese counterparts are anything but.&nbsp;</p> <p class="text--body">Names such as Alibaba HK$ 208, Tencent HK$ 608, Baidu HK$ 178, Weibo HK$ 48 and JD.Com HK$ 280, are off anything from -20% to -33% from recent ATHs. This is despite earnings being relatively strong across the China tech space, lower valuations than their US counterparts, the scarcity value of listed tech champions in Asia, the underlying domestic economic currents being sound, and a world that is slowly emerging from Covid fever and fatigue.</p> <h4 class="heading--4">Alibaba is down by over 30% from recent highs, lagging its US Tech Cousins like FB and GOOG&nbsp;</h4></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=69761260"></iframe></div><div class="article-image"><img alt="" src="https://www.home.saxo/-/media/content-hub/images/2021/june/q32021/q32021-kvp01.jpg"/></div><div class="rte--output">Source: Saxo Group and Bloomberg</div><br/><div class="article-additional-rte"><div class="rte--output"><p>It&rsquo;s worth noting that China&rsquo;s monetary policy has been tighter than in the rest of the world and is likely to stay put in 2H21, with risks likely being towards some accommodation in the second half of the year.&nbsp;</p> <p>On the other hand, we are almost certainly going to see a move towards tighter US fiscal policy in Q3/Q4, as the Fed starts the taper dance, embarking on a pathway to eventually being able to raise rates.</p> <p>So relatively speaking, even if the PBOC does nothing, there should be more accommodation on China&rsquo;s monetary policy than the US into year end. This should be conducive for China equities, in particular the lagging tech names, bonds, and probably the domestic leisure and travel industry.</p> <a href="https://www.home.saxo/en-mena/products" class="v2-btn v2-btn-primary">Explore Saxo&rsquo;s products here</a></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/thought-leadership/quarterly-outlook">Quarterly Outlook</a></div>Tue, 29 Jun 2021 03:48:00 Z2024-02-03T18:18:45Z{F11D8623-87AC-419E-A0F2-096F8ECD22B9}https://www.home.saxo/en-mena/content/articles/macro/md-mon-28-jun-2021-28062021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 27: Noisy Week Ahead with Month/Quarter/1st Half-end plus NFP Friday!<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 27: Noisy Week Ahead with Month / Quarter / 1st Half-end plus NFP Friday!</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #2</span><span>7<span >&hellip;</span></span></li> <li ><span>We did a &ldquo;Love It&rdquo; piece on <a href="https://www.home.saxo/content/articles/macro/reflections-thu-24-jun-2021-25062021">Brazil last wk: Macro Dragon Reflections: Brazil, Commodity Rich, +210M pop, +$1.4T GDP, Hawkish BCB, 2022 Political Elections &amp; Consistently Punching Below its Weight. Love it!</a></span></li> <li ><span>Where we highlighted the vast underperformance of Brazilian equities vs. their EM counterparts, as well as the Brazilian Real &ndash; both of which seem set to be breaking out to big levels of appreciation. </span></li> <li ><span>Its going to be a Noise &gt; Signal week on a cross-asset basis, just given the significance of potential month/quarter/1Half flows, that also ends with the US NFP number on Fri (700K e 559K p).</span></li> <li ><span>The NFP could be interesting from a variety of different factors, the risk should be to the upside &amp; yet we still have not seen a significant beat in a while. </span></li> <li ><span>A +1M number is likely to see knee-jerk USD higher, as well as US yields, with a likely headwind for commodities &amp; 50/50 effect on US equities. </span></li> <li ><span>An in-line number 600-800K likely will be a snoozie.</span></li> <li ><span>A big miss, is actually really probably where the real tail-risk is&hellip; as it would be that much more unexpected given that federal subsidies expired across half the states in Jun. So if we print sub 400K, we should get USD &amp; US yields lower, CMDs higher, plus decent pop up in equities. </span></li> <li ><span>Natural interpretations here are &ndash; hastening, slowing down or no effect on Fed skew towards normalization. How we are going to get from tapering $120B a month, to zero &amp; hiking by E-2022 is a mystery to KVP. If there were two things we learned from the GFC when it comes to monetary policy: One &ndash; there are no &lsquo;temporary measures&rsquo; &amp; Two &ndash; there is no increase in the CPI, there is only rampant asset class inflation. </span></li> <li ><span>So this is all a game within the Meta Game of an ever increasing MMT campaign from both the MP &amp; FP side&hellip; </span></li> <li ><span>+15% is what everyone needs to remember. +15% is the CAGR of the G4 Central Bank balance sheet expansion since 2008. In other words, the supply of fiat from just the G4, is increasing by +15% a year &ndash; that is your hurdle to just break-even. </span></li> <li ><span>So next time you&rsquo;re looking at a stock &amp; talking valuation, or asking for funding for your start up&hellip; keep in mind that capital is the commodity. $1M in funding in 2007, is +$7M in 2021&hellip; Unicorns are not what they used to be. </span></li> <li ><span>The allocation of capital to talent &amp; compelling unique investment opportunities is really the juice &amp; asset. </span></li> </ul> <p ><strong><span ><br /> Rest of the Week &amp; Other Reflections </span></strong></p> <ul > <li ><strong><span >Econ Data:</span></strong><span > </span><span>Whilst we got final PMIs across the board &amp; even an ISM Mfg. number, its really all about the NFP data out of the US on Fri. 700K is the expectation from a previous print of 559K, so far we&rsquo;ve not seen any beats that can match the -634K miss from the release in May. </span></li> <li ><span>We know that over half the states had their federal subsidies expiring over this month of Jun, with most of the other half set to expire in Sep 6. So again, far from a clear picture in regards to the jobs coming back &ndash; yet intuitively one has to think it should be chunky, rather than a linear uptrend. </span></li> <li ><strong><span >CB: </span></strong><span>No major central bank scheduled rate decisions. Worth appreciating the step-up in hikes from Russia +50bp, <a href="https://www.home.saxo/content/articles/macro/reflections-thu-24-jun-2021-25062021">Brazil +75bp</a>, Mexico +25bp (surprise), etc. The monetary divergence theme is going to create some interesting investment pockets. &nbsp;&nbsp;&nbsp;&nbsp;</span></li> <li ><span>Worth also noting that since the Fed pivot towards making some moves in tapering on 15 Jun, only two major EM FXs (BRL &amp; RUB) are outperforming vs. the USD. </span></li> <li ><strong><span >Fed speak:</span></strong><span > </span><span>Quite a few Fed speakers including Barkin, Quarles, Bostic. <span ></span></span></li> <li ><strong><span >ECB|EUR:</span></strong><span > Lagarde speaking twice on </span><span>Tue &amp; Thu. <span ></span></span></li> <li ><strong><span >RBNZ|NZD:</span></strong><span > Orr set to speak on Statement of Intent on Tue. <a href="https://www.rbnz.govt.nz/about-us/statements-of-intent/statement-of-intent-1-july-2020-30-june-2023?__cf_chl_jschl_tk__=6b7fb1264b6b3d280954fcef6292886a186a041c-1624852245-0-AWD3ZeC67a8NgzjMPOEfShjR1owGQqXdzCyOMStY3thUxPYd-9MtgP3YJvpNa2pPyUyzk36yzdvpDmouiJWlk3jemChTq9Ghv2pPERni9Ph88Pnp6PB73_fske2ETZeoZxHV5pD5fodkVGtdklQ_ry4eH37P_u7TWx7MyRGQkNNhDQuo7ptNGKXLlufKbDrAay0BSZoeMyHRodMHMFnI1yiSeP9QQUKVekxp9XDz5MRI4_AF1_s0SBhnM0tuvFpowWG1-plGME2AnVlcuJnJHCKXC7Co6h7P2gFxKfsitXZlWNNIvfxByslxpw1xLZT-HGEe3g29HPGXifGQBuoc7jNmwu2OwsM1HgAvB7I_f__D9lIZhFx169-1V1PRMDGSoyuWSmkY6PfnszbxaIUw5ApFI0G0eRWUUkgCcH-i9IqQJdEaZPWoSNnY1x764PoNz0l4TMuP7Juf8rwl-1VbCrXUgOptN24Z9yiwBXD6_r9oLf09DyOYCQkAxWOh4PSsG6k3oFb6sp0zrxg5RGK8YFdxcTJNH3IsPgi7TaYvtLOi">Here is the link from the last one from Jul 2020.</a> </span></li> <li ><strong><span >Hols</span></strong><span >: </span><span>Italy out on Tue, Cad out on Thu. <span >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> Check out our recent <a href="https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=38s">Crypto Interview with The Spartan&rsquo;s Group Casper B. Johansen</a> &amp; yes, the <a href="https://www.cnbc.com/2021/05/20/us-treasury-calls-for-stricter-cryptocurrency-compliance-with-irs.html">increased volume for regulation coming out of the US</a> is actually a massively positive structural aspect for the space. Translation: Regulation of Crypto = Acceptance of Crypto. </span></li> </ul> <p><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste,<br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 27 Jun 2021 23:00:00 Z2021-09-21T10:41:25Z{E482D43F-B439-412C-987E-1CBBD0D8B55F}https://www.home.saxo/en-mena/content/articles/macro/reflections-thu-24-jun-2021-25062021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubplace-lc/brMacro Dragon Reflections: Brazil, Commodity Rich, +210M pop, +$1.4T GDP, Hawkish BCB, 2022 Political Elections & Consistently Punching Below its Weight. Love it!<div class="article-excerpt">In this latest edition of Macro Reflections, KVP revisits his long contrarian bullish play on Brazil from late 2020, early 2021. This was a miss on the currency, yet a hit on the equities. We tune back in to an accelerating Hawkish Brazilian central bank in the BCB, that just hiked by +75bp last wk to 4.25%. Inflation is on fire (+8%) as the country faces its worst drought in close to 100yrs. We also take a look at the underperformance of Brazilian Equities (EWZ) vs. the rest of the Emerging Markets (EEM) and touch on the potential complications of Covid, as well as the 2022 presidential elections. VALE & PBR are also touched on. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon Reflections: Brazil, Commodity Rich, +210M pop., +$1.4T GDP, Hawkish BCB, 2022 Political Elections &amp; Consistently Punching Below its Weight. Love it!&nbsp;&nbsp;</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> </h4> <h3 class="heading--3"> Reflections&hellip;</h3> <h4 class="heading--4">Backdrop</h4> <ul > <li ><span >Brazil the country that seemingly has everything:</span></li> </ul> <ul > <ul > <li ><span >5<sup>th</sup> Largest country in the world at c. 8.5M square km, including some of the most fertile agricultural lands, as well as priceless tracts of the Amazon (c. 60%)</span></li> <li ><span >Over 210M people, with an economy of over $1.5T &amp; one of the better run, independent central bank in the BCB </span></li> <li ><span >Rich in commodities, from oil to iron ore to agricultural products ranging from soybeans, coffee, sugar to beef &amp; more</span></li> <li ><span >Amazing beautiful people, rich in culture &amp; heritages from all around the world (Europe, Africa, Asia, LatAm)</span></li> <li ><span >World Class Footballers for those into their sports </span></li> </ul> </ul> <ul > <li ><span >Yet at the same time not all as it seems, as its plagued with a number of things &ndash; all likely linked to the paradox of plenty (resource curse):</span></li> </ul> <ul > <ul > <li ><span >Abysmal response &amp; co-ordination around the response to the Covid-Pandemic. You had a president who referred to it as the &lsquo;sniffles&rsquo;&hellip; before later catching the 'sniffles' himself.&nbsp;</span></li> <li ><span >General lack of sustainable structural reform, that is long overdue that is a function of less corruption, less generous retirement benefits &amp; subsidies, massive increase in the ease of doing business, less protective capital markets &amp; protection of the incumbent few</span></li> <li ><span >The current $1.5T GDP forecast for 2021 is well south of the +$2.6T from 2011. Similar to other countries, debt has been increasing off the back of subsidies to alleviate the effects of Covid to its citizens </span></li> <li ><span >The political landscape is a mixture of part comedy, part horror story &amp; part fatigue in regards to not just the likely run-off candidates in 2022 &ndash; <a href="https://www.bloomberg.com/news/articles/2021-05-12/lula-would-defeat-bolsonaro-in-presidential-vote-poll-shows">Lula &amp; Bolsonaro</a> &ndash; but also in any real significant structural reform making it through the government </span></li> <li ><span >One of the biggest wealth inequalities in the world &ndash; <a href="https://www.oxfam.org/en/brazil-extreme-inequality-numbers">which for context from Oxfam see&rsquo;s the 6 richest Brazilian men having more wealth than 100M of its population and the 5% richest Brazilians having the same income as the remaining 95%. Brazilian women are on track to close the wage gap, IN 2047! And Black Brazilian will earn the same as whites IN 2089!</a> </span></li> <li ><span ><a href="https://www.nytimes.com/2021/06/19/world/americas/brazil-drought.html">Brazil is currently undergoing the most severe drought in close to 100yrs</a> &amp; inflation is on fire, with the most recent print clocking +8% for the month of May. This drought not doubt also has structural implication to the supply &amp; hence global prices of a lot of the commodities that Brazil is known for. &nbsp;</span></li> </ul> </ul> <h4 class="heading--4"><span >Earlier This Year...</span></h4> <ul > <li ><span >The Macro Dragon was calling for a contrarian long Brazilian exposure at the end of 2020 &amp; start of 2021, both through the Brazilian Real (USDBRL ndfs, or BRLUSD futures) &amp; Brazilian equities (Either Bovespa futures or EWZ country etf, as we are playing the blob here &ndash; like any good Macro gal or guy </span><span >😉</span><span >). </span></li> <li ><span >This was off the &lsquo;Worst is in&rsquo; Thesis on the view of, &ldquo;it just cannot get any worse, its about as contrarian as Trump paying taxes, the downside is capped on Brazil given maximum pessimism &amp; we likely are about to embark on a hiking regime from the BCB&rdquo;. </span></li> <li ><span >This did not work out as envisaged on the Brazilian Real (USDBRL) which failed to break the pivotal 5.00 range, KVP&rsquo;s timing was off here&hellip;<br /> <br /> <img height="231" alt="BZ 10" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bz-10.png" /><br /> </span></li> </ul> <ul > <li ><span >&hellip;yet did play out on the equity side with the EWZ etf continuing to grind higher &amp; after some risk-off around the end of 1Q, we are breaking out to new highs as the back end of May&hellip;<br /> <br /> <img height="229" alt="BZ 20" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bz-20.png?h=229&amp;w=469" /><br /> </span></li> </ul> <h4 class="heading--4"><span >Checking Back-In... BCB at 4.25% post a +75bp hike, with another +75-100bp potentially on Aug 3</span></h4> <ul > <li ><span >We now have a hawkish central bank that has hiked 3x this year, with the latest hike from last wk being +0.75% to 4.25%. </span></li> <li ><span >They are expected to hike by at least another +0.75% in their next meeting, as we <a href="https://www.reuters.com/world/americas/brazil-inflation-may-rises-above-8-highest-since-sept-2016-2021-06-09/">now have Brazilian inflation running hot at +8.1% in May &amp; +6.8% in Apr. </a>Its also worth noting next year is a presidential election year &amp; the BCB likely wants to get all their tightening in by year-end so as not to be accused of any political meddling in 2022 (hikes/cuts would be considered a move against/for the incumbent). </span></li> <li ><span >BCB&rsquo;s next meetings for 2021 are: 4 Aug, Sep 22, Oct 27, Dec 8</span></li> <li ><span >Plus 6 more CPI prints left for 2H21: Jul 8, Aug 10, Sep 10, Sep 9, Oct 8, Nov 10, Dec 10 </span></li> <li ><span >The weekly long term chart on the real, shows that if this is a real break of the pivotal 5.00 lvl, the &lsquo;easy&rsquo; move is to 4.80, then 4.50 from these 5.00 lvls. With the longer-term move of 4.00 to 3.50 subject to future commodity growth demand, election results in 2022 as well as the monetary policy of both the BCB &amp; the Fed.&nbsp;<br /> <br /> <img height="231" alt="BZ 3" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bz-3.png" /><br /> </span></li> </ul> <ul > <li ><span >On the equity side, one needs to pull back a 10yr monthly chart to really see the potential of where we could be going with this break-out higher.</span></li> </ul> <p ><img height="229" alt="BZ 4" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bz-4.png" /></p> <p >&nbsp;</p> <ul > <li ><span >Its also worth noting that EWZ (Brazil) has vastly underperformed vs. EEM (EM) for the last decade, with EEM up to 140, vs. Brazil down to c. 73. That&rsquo;s a +70% underperformance</span><span ><br /> <br /> <img height="257" alt="BZ 5" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bz-5.png" /><br /> </span></li> </ul> <ul > <li ><span >If one standardizes to the start of 2020 (pre-Covid) there is still a +35% outperformance to EM&rsquo;s favor&nbsp;(124 vs. 89), leaving KVP considering whether being long EWZ vs. EEM may make sense as a play for the lag in Brazil, proxy to the commodity secular green-tech/infra. cycle, as well as better value, as well as contrarian play</span><br /> <br /> <br /> <img height="257" alt="BZ 6" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bz-6.png" /> </li> </ul> <ul > <li ><span >Naturally risks as always remain: New virus mutation that complicates the pathway out of covid for the country, corruption, 2022 presidential elections, stronger USD given Fed pivot from the Jun 16 meeting (with Jackson Hole late Aug, to Sep 15 expected as next indication of Fed taper). </span></li> <li ><span >For those looking for purer stock plays, there are a number of blue chip names (with ADRs in the US) like Vale [VALE, iron ore player] &amp; one of the best Brazilian Macro Minds that KVP knows whispered something about energy player Petrobras [PBR] &ndash; which can give one a proxy to long-term oil exposure, Brazil + EM exposure, +30% FCF Yield &amp; at c. $11-12 stock price is still -30% to -25% from its pre-covid lvls of $16.</span></li> </ul> <p ><img height="229" alt="BZ PBR" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bz-pbr.png" /></p> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span> <span>Brazil</span></div>Thu, 24 Jun 2021 23:00:00 Z2024-02-03T18:19:19Z{05444A9E-5B7B-4873-A2E2-536023E21BC5}https://www.home.saxo/en-mena/content/articles/macro/md-mon-21-jun-2021-21062021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK #26: The Week After the Hawkish Fed Pivot... <div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #26:The Week After the Fed Hawkish Pivot...&nbsp;</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #2</span><span>6<span >&hellip;</span></span></li> <li ><span>Despite the title, we&rsquo;ll cover the thoughts &amp; potential pathway from last wk&rsquo;s FOMC meeting on a different thread later this Monday Asia &ndash; so look out for a Macro Reflections piece&hellip; It was just getting too long for a wk ahead piece</span></li> <li ><span>Suffice to say, risk-off is the name of the game equity wise in the Mon Asia Midday Session&hellip; a slight pop in AUD 0.7489 +0.13% &amp; NZD 0.6955 +0.27% post the beatdown they got last wk at -3.0% to 0.7479 &amp; -2.7% to 0.6936, respectively.</span></li> <li ><span >Gold 1774 +0.57% trying to bail water out of the flooded ship, post last wk&rsquo;s -6.0% to 1764&hellip;</span></li> </ul> <p ><span><br /> <img alt="261" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/261.png?h=269.667&amp;w=562.333" /><br /> </span></p> <ul > <li ><span>&hellip;&amp; ditto on copper than finished last wk at -8.4% to 415. </span></li> </ul> <p ><img alt="262" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/262.png?h=266.333&amp;w=566.333" /><span><br /> <br /> </span></p> <ul > <li ><span>And as always Oil completely not giving a fudge &amp; ticking up +0.50 to +1.0% after finishing up last wk. Clearly oil &ndash; for now at least &ndash; could not spell hawkish Fed if you held its hands. Still think Oil could easily do -5% to -15% &amp; still be in a bullish Ascension. It has been pretty much relentless since Nov of last year &ndash; was interesting to see energy names like etf XLE $52.39 pullback by -5.4% last wk.</span></li> </ul> <p ><span><br /> </span><img height="229" alt="263" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/263.png" /></p> <ul > <li ><span>The theme this wk is going to be digestion of the Fed &amp; its implications, as well as have some flash PMIs, BoE, FOMCs speakers &amp; Powell set to speak on Tues (Wed 0200 AM SGT). </span></li> <li ><span>Eight key question for cross assets &amp; markets to consider:</span></li> <ol > <li ><span>Have the moves from last wk completely repriced us for a Hawkish Fed from a cross-asset perspective?</span></li> <li ><span>Have the moves from last wk overshoot from a cross-asset &amp; themed perspective?</span></li> <li ><span>Have the moves from last wk <span class="underline; ">undershoot</span>, either from a few lagging securities like say BRL or TWD and/or we are just getting started in regards to USD bulls positioning?</span></li> <li ><span>Is the reflation theme dead, or is this a beautiful place to add onto some of the cyclicals likes financials?</span></li> <li ><span>Will the Fed have to potentially do another 180 degree turn closer to Jackson hole, as it seems that the Biden|Harris Administration may not be able to do as much fiscal as we envisaged from just 4-8wks ago?</span></li> <li ><span>A lot of key technical weekly closes from last wk, so regardless of one&rsquo;s thoughts on fundamentals are these about to be new emerging trends or false break-outs, or a mix of both depending on asset class &amp; underlying play within that asset class?</span></li> <li ><span>Why were things like financials selling off, if we are hiking rates &ndash; shouldn&rsquo;t banks do well in that environment? </span></li> <li ><span>Is there a chance that the Fed is pivoting towards being hawkish right when we are seeing maximum growth in the US &amp; potentially peak inflation given base effects fall off &amp; almost half of the components from US CPI rises from the last two readings had to do with temporary factors of second hand car prices? </span></li> </ol> </ul> <strong><br /> </strong> <h4 class="heading--4"> Rest of the Week &amp; Other Reflections </h4> <ul > <li ><strong><span >Econ Data:</span></strong><span > </span><span>Econ data is light this wk, we got flash PMIs across the board, with the US seeing final GDP &amp; durable goods readings set to come through. <span ></span></span></li> <li ><strong><span >CB: </span></strong><strong><span>BoT</span></strong><span> 0.50% e/p <strong>BSP</strong> 2.00% e/p<strong> BoE</strong> 0.10% e/p (yet taper is key risk, yet we are still delayed on reopening) <strong>MX</strong> 4.00% e/p <strong><span></span></strong><span >&nbsp;&nbsp;</span></span></li> <li ><strong><span >Fed speak:</span></strong><span > </span><span>Tons of speakers with a few dovish FOMC speakers kicking off the wk, key focus will be Powell Tue testimony (Wed 0200 AM SGT/HKT) </span></li> <li ><strong><span>ECB<span >|</span>EUR<span >:</span></span></strong><span > </span><span>Lagarde speaking twice on Mon &amp; once on Wed </span></li> <li ><strong><span >Hols</span></strong><span >: </span><span>No major hols on the agenda <span >&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> Check out our recent <a href="https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=38s">Crypto Interview with The Spartan&rsquo;s Group Casper B. Johansen</a> &amp; yes, the <a href="https://www.cnbc.com/2021/05/20/us-treasury-calls-for-stricter-cryptocurrency-compliance-with-irs.html">increased volume for regulation coming out of the US</a> is actually a massively positive structural aspect for the space. Translation: Regulation of Crypto = Acceptance of Crypto. </span></li> </ul> <p class="heading--4"><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste, <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 20 Jun 2021 23:00:00 Z2021-09-21T10:52:06Z{4D69BA91-FF0D-43AC-AF78-79038C216BED}https://www.home.saxo/en-mena/content/articles/cryptocurrencies/dragon-interview-with-casper-johansen-2-19062021Kay Van-PetersenPrimary-CryptocurrenciesInflationInflationSGFocus Inflationproduct-equitiesEducationproduct-forexproduct-forexproduct-commoditiessector-Commodityproduct-bondsproduct-bondsPrimary-CryptocurrenciesSetting the bell-curve in Crypto with The Spartan Group's Co-Founder & Partner, Casper B. Johansen<div class="article-excerpt">Our fifth Dragon Interview finally takes us to an exciting, controversial & new asset class that is dear to KVP's heart, Crypto. The first in a series of Crypto focused content, join us as we sit down with Casper B. Johansen, Co-Founder & Partner of The Spartan Group - an advisory & digital asset pioneer in the crypto space.<br><br>We take a walk-through Casper's background, how him & his co-founders stumbled across crypto, an overview of how to potentially think about this new, dynamic & constantly evolving space, as well as the rise of The Spartan Group.</div><div class="article-rte"><div class="rte--output"><h3 class="heading--3"><a href="https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=28s">Setting the bell-curve in Crypto with The Spartan Group's Co-Founder &amp; Partner, Casper B. Johansen&nbsp;</a></h3> <p>So we covered global macro trading with <a href="https://www.youtube.com/watch?v=KUMMeQWwMpg&amp;t=140s">the exceptional Ashvin Murphy from AVM</a>. Proprietary <a href="https://www.youtube.com/watch?v=M16pRNnQcE4&amp;t=698s">trading global currencies across banks with the talented Dacky (Keith Dack)</a>. As well as <a href="https://www.youtube.com/watch?v=qn4-73g2sqw&amp;t=298s">family office macro trader &amp; nature conservationist Geo Chen</a>. <br /> <br /> Yet you know we had to go crypto!&nbsp;<br /> <br /> <br /> <a href="https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=28s">For our latest Dragon Interview</a> we had the pleasure of sitting down with an exceptional entrepreneur &amp; ex Goldman Sachs investment banker Casper B. Johansen.<br /> <br /> The first of a number of special series Dragon Interviews on Crypto, we cover a number of things on this first interview with Casper, including:<br /> <br /> -Casper's come-up story career wise, from being a Dane educated as a lawyer in the US &amp; jumping immediately to one of Wall Street's most prestigious banks, Goldman Sachs.<br /> <br /> -To his first tech start-up in Beijing in 2008, the folding of that a few years later alongside the stripes, lessons &amp; takeaways earned there.<br /> <br /> -To coming across crypto in 2017 initially as a VC investor &amp; the inception of The Spartan Group from that. We cover the set-ups, strategy &amp; long-term vision of the group, that Casper Co-founded with Melody He &amp; Kelvin Koh (all Goldman alumni).<br /> <br /> -We touch on the last bull market in 2017, as well as the "punched in the face" nuclear bear market that came after, that saw Bitcoin lose more than 80% of its value from its previous peak &amp; naturally a lot of tokens that went to zero.&nbsp;&nbsp;<br /> <br /> -We then delve deeper into crypto with an appreciation of decentralized vs. centralized, how to potentially look at the always evolving space, whilst also covering everything from:<br /> <br /> <br /> Bitcoin, to Ethereum, to DeFi (Decentralized Finance), to NFTs &amp; also touch on some of the pioneering players in the space including: Origin Protocol, Blockstack, Solana, Dapper Labs, Deribit, Blockfolio.<br /> <br /> There is a lot here to digest &amp; at bear minimum, likely one of two if not one of three more pieces to come from the dream team at The Spartan Group.<br /> <br /> We hope you <a href="http://https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=28s">enjoy the interview </a>as much as we did putting it together.<br /> <br /> -KVP<br /> <br /> ps. For more <a href="https://blockcrunch.libsyn.com/">crypto related content one can also check out the BlockCrunch podcast</a>, that is run by crypto analyst Jason Choi, from Spartan Capital, the asset management arm of The Spartan Group.<br /> <br /> <a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA">For more Dragon Interviews please click here</a></p> <p>Namaste,</p> <p>-KVP</p></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=68812743"></iframe></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/cryptocurrencies">Cryptocurrencies</a> <span>Inflation</span> <span>InflationSG</span> <span>Focus Inflation</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>Education</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a> <span>Forex</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/commodities">Commodities</a> <span>Commodity</span> <span>Bonds</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/cryptocurrencies">Cryptocurrencies</a></div>Fri, 18 Jun 2021 23:00:00 Z2024-02-03T18:19:10Z{8A1E4B8D-5FD8-4973-864A-A7E6CD36BE90}https://www.home.saxo/en-mena/content/articles/macro/md-mon-14-jun-2021-14062021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK #25: All about the Fed (Yawn!), with lower lows in vol & higher highs in the S&P...<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #25: All about the Fed (Yawn!), with lower lows in vol &amp; higher highs in the S&amp;P...</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #25&hellip;</span></li> <li ><span >Morning got away from KVP with a few key calls that could not be recalibrated. You know most days you get in the Spaceship ready to take over the galaxy &amp; fight evil 24-7. Other days you get in &amp; its clear as day, you should not be operating any heavy machinery&hellip; today is very much the latter&hellip; </span></li> <li ><span >&hellip;heavy machinery aside, not too much that is top of mind that feels new, fresh or insightful&hellip; &amp; that is also part of the process folks&hellip; </span></li> <li ><span >&hellip; Leonardo did not do a string of Mona Lisa&rsquo;s&hellip; in fact most of his works were unfinished&hellip; (tempted to leave it here &amp; press send/publish&hellip; someone get this man a NetFlix special!)</span></li> <li ><span >Last wk was about the US inflation print, we got it &ndash; it was a banger, with a 5-handle despite an already elevated expectation of 4.7%, yet the MoM beats were nothing like the previous month&rsquo;s&hellip; </span></li> <li ><span >Net-Net the mkt did not seem to care, yet there was a mish-mash of moves into the close off the wk from a cross-assets basis that kinda leaves KVP shrugging his shoulders &amp; eloquently muttering &ldquo;no idea! What that was all about.&rdquo;</span></li> <li ><span >The dollar closed the wk higher, despite yields closing lower, equity volatility collapsed with the VIX -4.7% 15.65 (super conducive for the MEME|WSB names), S&amp;P continued to grind to new ATHs with a &nbsp;chart that looks set to break-out. The growth &amp; tech segments continue to recover beautiful since the May 10thish lows, that we were lucky enough to call.</span></li> </ul> <p ><span ><img alt="251" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/251.png?h=229&amp;w=469" /></span></p> <p ><span >&nbsp;</span></p> <ul > <li ><span >Compass Pathways (CMPS) clocked +20% last wk. The range of returns on the MEME|Shorted stocks that KVP is tracking did +67% to -19%, with 80% of the 30 names closing in the green for the wk. There are a number of interesting charts there including CMPS, BYND, PTON, ABNB, TY, WOOF, SDC, etc. &nbsp;</span></li> <li ><span >Gold $1877 -0.74% &ndash; which has been trading weak over the last 1-2wks &ndash; is looking dodgy for the bulls around these lvls (granted two wkly drawdowns of c. -1.3%, after 4 wks of a c. +8% run, does not necessarily a trend, reverse) &nbsp;&amp; one has to also wonder if Copper $453.75 +0.19%, could retrace from these $450-455 lvls to c. $420/30.</span></li> <li ><span >One potential interpretation from the lower yields &amp; break-evens (move higher in real rates), is that the bond market either does not care about inflation, feels that its going to be transitory, feels Biden may not have enough starch &amp; support in the Dems to get big Fiscal Done, is simply in a retracement phase (we did go from c. 80-90bp to 170bp!), or the Fed is dead until at least end of Aug&rsquo;s Jackson Hole, so really the Sep 15 meeting. </span></li> <li ><span >Or perhaps a hybrid of a number of those points.</span></li> </ul> <p ><span >Healthy retracement in Break-Evens across 2-5-10yr horizons</span></p> <p ><img height="226" alt="252" width="419" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/252.png" /></p> <ul > <li ><span >No new hard views these sides&hellip; yet worth noting that summer should see the classic volume dissipate as the institutions get off their desks &amp; gladly venture forth from their small home offices. Which leaves one wondering, low vol, lower volume, advantage WSB|MEME crown&hellip; at least until the next string of NFP numbers &amp; the Aug-Sep phase of the year. </span></li> <li ><span >So Fed is meant to be a dude &amp; a paint drying event &ndash; which naturally means there is tail-risk to the downside for a number of assets (except vol, dollar, financials, insurers, cyclicals) if for some reason there seems to have been a lot of tapering being discussed and/or there is a big upward adjustment in the inflation forecasts. Again, these are low delta events. </span></li> <li ><span >Cannot help but thing, the more switched on consistently profitable traders are structuring part of their portfolio to benefit from a potential move from the Fed in late Aug to Sep. Whether that is puts &amp; put spreads on US duration or just an etf like TLT, upside calls on the dollar, puts on US10yr bond, downside expression on equities&hellip; not yet too sure&hellip; but the markets are the ultimate buffet, players choice. </span></li> <li ><span >For now we are in goldilocks lala land&hellip; &amp; that by itself creates it own set of opportunities.</span></li> <li ><span >One last thing, Turkey could be fireworks given the CBOT rate decision on Thu &ndash; post Erdogan last wk saying rates are again too high. Remember we have had 3 central bank governors in 2yrs, rates are at 19%, inflation is rampant, they used up all their reserves &amp; oh, the vast majority of Turkey&rsquo;s trade is dependent on the USD. If you think we cannot see another massive cut as was previously the case, clearly you are already forgetting the key lesson from 2020 &ndash; that ANYTHING IS POSSIBLE! &nbsp;</span></li> </ul> <p ><span ><img height="231" alt="253" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/253.png" /></span></p> <ul > <li ><span >Don&rsquo;t forget Biden is still on the European tour with chats with Erdogan (Mon) &amp; Putin (Wed) also on the register. </span></li> </ul> <strong><br /> </strong> <h4 class="heading--4"> Rest of the Week &amp; Other Reflections </h4> <ul > <li ><strong><span >Econ Data:</span></strong><span > China monthly growth data, US PPI &amp; RS, NZ quarterly GDP figs </span></li> <li ><strong><span >CB: CHF</span></strong><span > -0.75% e/p, <strong>USD</strong> 0.25% e/p, <strong>BRL</strong> 4.25%e 3.50%p <a href="https://www.reuters.com/article/russia-economy-rates/update-2-russia-raises-key-rate-to-5-5-flags-more-hikes-to-curb-inflation-idUSL5N2NT1Y6">(worth noting CBoR hiked by +0.50% last Fri to 5.50% as we flagged)</a> <strong>JPY</strong> -0.10% e/p, <strong>TRY</strong> 19.00% e/p &nbsp;</span></li> <li ><strong><span >Fed Speak:</span></strong><span > We should be in blackout, no one scheduled to speak yet that could open up post the Wed FOMC statement, press conference &amp; forecasts. </span></li> <li ><strong><span >BoE|GBP:</span></strong><span > Bailey set to speak on Mon &amp; Tue</span></li> <li ><strong><span >BoC|CAD:</span></strong><span > Macklem set to speak early Asia Thu / late Americas Wed </span></li> <li ><strong><span >RBA|AUD:</span></strong><span > Mins out on Tue, Lowe set to speak on Thu</span></li> <li ><strong><span >Hols</span></strong><span >: CH &amp; AU out on hols today, back in on Tues. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> Check out our recent <a href="https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=38s">Crypto Interview with The Spartan&rsquo;s Group Casper B. Johansen</a> &amp; yes, the <a href="https://www.cnbc.com/2021/05/20/us-treasury-calls-for-stricter-cryptocurrency-compliance-with-irs.html">increased volume for regulation coming out of the US</a> is actually a massively positive structural aspect for the space. Translation: Regulation of Crypto = Acceptance of Crypto. </span></li> </ul> <p ><span ></span><span >-</span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste,<br /> <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Mon, 14 Jun 2021 03:00:00 Z2021-09-21T11:05:57Z{AEB7AEAE-60C5-4075-AAA1-0FD36D8860C1}https://www.home.saxo/en-mena/content/articles/macro/md-mon-7-jun-2021-07062021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 24: BoC, ECB, CBOR, US Inflation<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 24: BoC, ECB, CBOR, US Inflation &amp; Crypto</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #2</span><span>4<span >&hellip;</span></span></li> <li ><span>Last week we touched on the MEME | WSB | Shorted stocks&hellip; <a href="https://www.home.saxo/content/articles/equities/md-reflections-01062021">Is Beyond Meat the next GameStop? Thoughts on the Jan-Feb Short Squeeze.... THE HIVE, AMC, GME, BB &amp; BYND...</a> </span></li> <li ><span>Whilst these names generally pulled back on Fri, overall for WK #23 they were mostly up with some interesting divergences such as AMC +81% vs. GME -2% for the wk. </span></li> <li ><span>We also touched on what we felt could be some key triggers to watch for the month of Jun: <a href="https://www.home.saxo/content/articles/macro/md-mon-31-may-2021-31052021">An Event-Driven June: NFP, Fed, Inflation, Fiscal Spending, Re-openings &amp; Crypto..</a></span></li> <li ><span>So we got the NFP figure last Fri for the month of May, that was a subpar 559K a vs. 675K e, there was also a minor revisions of +12K to the previous Apr figure &ndash; that had initially missed by a spectacular -734K</span></li> <li ><span>A few things:</span></li> <li ><span>We still have c. 7.6m jobs to regain, to take us back to pre-covid lvls. As per our original Dragon thesis, looks like we are right (so far) that the Apr print marked the low in the NFPs &amp; we are generally only going to go up from here&hellip; at least until we have that final 1-2m jobs to go. And yes, its not going to be linear. </span></li> <li ><span>Tech &amp; growth in general, loved the print, as we lifted +1.8% on Fri from the Nasdaq-100&hellip; interpretation from the market is a Fed that is going to continue to stand down, hence we are in a goldilocks sweet spot for another few wks. </span></li> <li ><span>Volatility continues to fall (unless you&rsquo;re a WSB/MEME name), with the VIX closing last wk at 16.42&hellip; the lowest in 2 months. So this means option premiums are cheap (historically at least), making buying options something for people to consider. Be that as tail-risk hedges (say puts on gold, TLT etf) or as expressions of directional positioning (upside calls in names like ABNB &ndash; one of a kind &amp; reopening theme &ndash; or COIN&nbsp; &ndash; Crypto proxy).</span></li> <li ><span>Its worth remembering that tail-risk is symmetrical &ndash; there is an overwhelming bias to focus on tail-risk to the downside, i.e. classic risk off (so long calls on bonds, gold, dollar, staples, healthcare, utilities, etc), with not enough bandwidth being made for focus on tail-risk to the upside. </span></li> <li ><span>Key events to still keep on the radar are naturally this Thu 10 Jun US inflation Print, the Fed meeting in c. 1.5wks time on Wed 16 Jun (remember updates on forecasts, plus Q&amp;A is worth noting. And further down the line we got FOMC mins on Jul 7<sup>th</sup> (focus naturally on taper discussions or lack thereof) &amp; next NFP is on Jul 1 for the month of Jun. </span></li> <li ><span>Again as a reminder, there have been at least 23 states opting out of the Federal unemployment, insurance &amp; healthcare benefits with the objective of influencing people to get back to work. &nbsp;Most of those benefits for those 23 states will expire over the course of Jun &amp; we should start to see them in the Jul &amp; Aug NFP release dates. For the other states, the benefits don&rsquo;t expire until Sep 6<sup>th</sup> &ndash; so there are some potential structural uplifts to the noise. </span></li> <li ><span>Lastly for the wk ahead, keep an eye out for the Central Bank of Russia rate decision on Fri, economists are expecting a +25bp hike&hellip; yet we could be in for +50bp&hellip; USDRUB 0.7282 continues to look interesting from the short side, given the Dragon&rsquo;s bullishness for energy &amp; as a reopening proxy.<br /> </span></li> <li ><span>A break of around 72.50, could open us fast for a move to 72 then all clear for 70 handle. Perhaps some cheeky 1-2wks short dates USDRUB puts? Always tough to know what&rsquo;s priced in&hellip; perhaps the Thu US inflation print can provide a better set-up for the Fri rate decision&hellip; hmmm&hellip; </span></li> <li ><span>A key event risk to keep in mind for all RUB crosses &amp; Russian Assets is the scheduled meeting between Biden &amp; Putin that should be going down next wk on Fed Wed in a summit in Switzerland. No doubt some of the topics being discussed behind closed doors will be Ukraine, Belarus &amp; Cyber Attacks. </span></li> <li ><span>Lastly a big structural development that is not being fully appreciated (yet) in the crypto market, is something that we&rsquo;ve been postulating since 2017. That it was only a question of &lsquo;When&rsquo; not &lsquo;If&rdquo; that a government would look to make Bitcoin/Crypto as a formal part of its economic system. <a href="https://edition.cnn.com/2021/06/06/investing/bitcoin-el-salvador/index.html">The President of El Salvador, is looking to make the country the first to take Bitcoin as a legal tender. The bill would still have to be approved by congress, but the point here has already been made.</a> Precedent. </span></li> <li ><span>Now some people may say, who cares it&rsquo;s a poor country with less than 7m people &amp; a GDP lower than $30bn. Perhaps&hellip; but remember the pioneers are almost always ridiculed at first by the majority, then celebrated later (assuming they are correct). </span></li> <li ><span>One last thing, don&rsquo;t get lost in the weeds of Bitcoin, Ethereum, Cardano, Ren, Ripple, Polkadot, Flow, Origin, DeFI, NFTs, etc&hellip; at the end of the day, the META Trend is decentralization. </span></li> </ul> <strong><br /> </strong> <h4 class="heading--4"> Rest of the Week &amp; Other Reflections </h4> <ul > <li ><strong><span>Econ Data:</span></strong><span> Economic wise &amp; on known unknowns, its set to be a much quieter wk on the data front with really the US inflation figures due on Thu likely to be most closely watched.<span > </span>A big miss (reverse of last month&rsquo;s big beat) could send risk-assets higher &amp; still continue to bring bond yields lower, gold higher &amp; the dollar softer. </span></li> <li ><span>US CPI: +4.7%e +4.2%p, CORE 3.4%e 3.0%p</span></li> <li ><span>Otherwise we have German Factory orders, China loan data, US 10yr auction &amp; continued G7 meetings. </span></li> <li ><strong><span >CB: </span></strong><span>BoC<span > 0.</span>25<span >% e/p, </span>ECB<span > </span>0<span >.</span>25<span >% e/p</span>, CBoR 5.25%a 5.00%e (could see a +50bp hike)<span > &nbsp;</span></span></li> <li ><strong><span >Fed speak:</span></strong><span > </span><span>We should be in blackout, no one scheduled to speak. <span ></span></span></li> <li ><strong><span >Hols</span></strong><span >: </span><span>NZ out today<span > &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> Check out our recent <a href="https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=38s">Crypto Interview with The Spartan&rsquo;s Group Casper B. Johansen</a> &amp; yes, the </span><span><a href="https://www.cnbc.com/2021/05/20/us-treasury-calls-for-stricter-cryptocurrency-compliance-with-irs.html">increased volume for regulation coming out of the US</a><span > is actually a massively positive structural aspect for the space. Translation: Regulation of Crypto = Acceptance of Crypto. </span></span></li> </ul> <p><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste,<br /> <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 06 Jun 2021 23:00:00 Z2021-09-21T11:34:38Z{9060A269-4647-4C86-AC72-BAC202B788B2}https://www.home.saxo/en-mena/content/articles/equities/md-reflections-2-03062021Kay Van-Petersenproduct-equitiesproduct-bondsproduct-macroproduct-equity optionsproduct-optionseditorial-nasdaqMacro Dragon Reflections: Checking back in on the MEME / WSB / Reddit Army stocks of GME, BB, BYND & AMC's +2850% Lift-Off!<div class="article-excerpt">In the latest Macro Dragon Reflections think piece, KVP checks back in on the Monday dive into the MEME, WSB, Reddit Army stocks. We now have AMC taking the GME throne with BB looking interesting, GME still in the running & BYND showing no signs of elevated volatility in its options. Still two days to go before the wk is out & already this wk AMC $62.55 is +139%, BB $15.25 +51%, GME $282.24 +27% & BYND $149.74 +3%.</div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon Reflections: Checking back in on the MEME / WSB / Reddit Army stocks of GME, BB, BYND &amp; AMC's +2850% Lift-Off!</h3> <p>&nbsp;</p> <h4 class="heading--4"></h4> <h4 class="heading--4"> </h4> <h4 class="heading--4"><strong ><span >Reflections&hellip;</span></strong></h4> <ul > <li ><span >So on Monday&rsquo;s memorial day, we dropped a deep Dragon Reflections piece titled: <a href="https://www.home.saxo/content/articles/equities/md-reflections-01062021">Is Beyond Meat the next GameStop? Thoughts on the Jan-Feb Short Squeeze.... THE HIVE, AMC, GME, BB &amp; BYND...</a></span></li> <li ><span >And highlighted that the Tue open &amp; wk ahead could be very interesting for some of these names&hellip; &amp; so far this has held true&hellip;<br /> <br /> </span> <ul> <li ><span >&hellip;this thought piece serves as a bit of a check in on the price action &amp; developments so far over the Tues + Weds trading sessions&hellip; still two more trading days left this wk! </span></li> <li ><span >Underlying point here, is, hate it or love it&hellip; THE HIVE is here to stay&hellip; Jan/Feb were not a one-off occurrence but a sounding bell of the decentralized players being able to co-ordinate their views&hellip; similar to how the centralized Wallstreet players &amp; hedge funds gals &amp; guys have been doing for decades&hellip; that&rsquo;s a paradigm shift.<br /> </span></li> </ul> <p ><span ><br /> </span>Yellow highlighted columns capture price &amp; implied volatility increases so far this wk from Fri 28 May Close&nbsp;<br /> <img alt="MD - Thu 3 Jun" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/md---thu-3-jun.png?h=156&amp;w=725" /></p> </li> </ul> <p><strong ><span >A few takeaways (So far at least)</span></strong></p> <ul > <li ><span >AMC Ent. [AMC] $62.55 is clearly at the head of the pack, post a +116% price move last wk, the name has picked up another +139% over the first two trading day this wk. Taking its market cap from c. $13B to $31B, eclipsing GME. AMC also had the 2<sup>nd</sup> largest increase in IV (implied volatility) of +55%.</span></li> <li ><span >With AMC&rsquo;s IV at 448, its got a potential +2.3x if we were to see a repeat to the 1017 highs in early Feb. With that said, +2850% YTD is just an insane number. If you had $50,000 in AMC before the start of the year, that would now be worth $1,475,000&hellip; &amp; that&rsquo;s just the stock not the options. </span></li> <li ><span >Blackberry [BB] $15.25 had the best explosion on its IV, at +162% to 286, from its previous Fri 28 May figure of 109. We had also flagged this on Mon, as BB likely have the best risk/reward set-up from this simple anecdotal set. It also by far, had the most days to cover in regards to short interest at +7.7 days&hellip; vs. paradoxically enough AMC at the lowest with 1.6x</span></li> <li ><span >BB also had 2<sup>nd</sup> best price pop, getting +51% over the two trading days this wk, well above the +18% it clocked last wk. Feb vol got to 455, less than half the lvls of GME &amp; AMC at the time. So potential to just reach recent vol Highs in Feb is c. 1.6x. (Worth noting BB, BYND &amp; other names were the peripherals in the Jan/Feb squeeze with GME &amp; AMC being really the focus of THE HIVE)</span></li> <li ><span >GameStop [GME] $282.24 &nbsp;still very much in the game, with +27% pop in prices so far this wk &amp; vol lifting by +29% to 215, vs. its IV close of 167. Vol is still well south of the 999 lvls that were set in early Feb (c. +4.6x move if that was to be replicated / surpassed)</span></li> <li ><span >GME now has a mkt cap of +$21B, hard to believe this was a name in the sub billion dollar mkt cap. The name is up +1400% YTD &amp; folks say crypto is volatile! </span></li> <li ><span >Beyond Meat [BYND] $149.74 jumped by +11% o/n, yet that&rsquo;s post a -7% move on Mon, breaking its tally so far this wk to +3% - clearly underperforming the other names, by also being only up +20% YTD. In fact, its unclear how much of the pop o/n was linked to THE HIVE or to the <a href="https://www.cnbc.com/2021/06/02/from-gas-to-burgers-hackers-hit-consumers-where-it-hurts.html">hack on meat producer JBS</a>. </span></li> <ul > <li ><span >And yes Cyber Security is a meta investment theme, KVP is not on top of the individual names &ndash; would love a primer &ndash; yet there is an ETF called Russia, wait North Korea&hellip; no wait&hellip; HACK. Seriously the etf is called HACK, has been around since last 2014 &amp; currently has +$2.2B in assets &nbsp;</span></li> </ul> <li ><span >BYND&rsquo;s IV has ticked up a notch by +14%, which again is vastly lower than the other 3 names. KVP still thinks, if THE HIVE / Reddit Army / WSB Possee / Apes etc&hellip; were really significantly participating in a name like BYND or any other name&hellip; you&rsquo;d see it in volatility exploding in the options&hellip; </span></li> <li ><span >&hellip;so far, its still only half-time in the Beyond Meat court&hellip; </span></li> <li ><span >Net-net&hellip; as risky &amp; crazy as things are&hellip; the path of least resistance is still likely to the upside in the MEME names. Its also worth noting, intuitively one would expect that we should not see another Robinhood / broker freeze on any of these names given what occurred in Jan/Feb&hellip; or at the very least&hellip; the bar will be significantly higher&hellip; which means we could look to replicate, perhaps even pass some of the stratospheric heights made in early Feb. Before going to situations of -70% to -90% drops in volatility &amp; pullbacks of -70% or more in the actual prices &nbsp;</span></li> <li ><span >Charts below will give a context on price appreciation both in the first 3 months of the year &amp; the most recent two months&hellip; </span></li> </ul> <p ><span >For the Jan / Feb squeeze (Based from 12 Jan ) GME was firmly in the driver&rsquo;s seat&hellip;.<br /> <br /> <img height="335" alt="2 MD - Thu 3 Jun" width="737" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/2-md---thu-3-jun.png" /></span></p> <p ><span ><br /> For the current squeeze (Based from May 10) AMC has overtaken &amp; no one else is even close&hellip; </span></p> <p ><span >...making one wonder who is the contender going to be, GME again or BB, BYND or brand new name?<br /> <br /> <img height="335" alt="3 MD - Thu 3 Jun" width="714" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/3-md---thu-3-jun.png?h=335&amp;w=714" /></span></p> <p >&nbsp;</p> <h4 class="heading--4"><strong><span >How to Stick Your Head Into A Wood Chipper&hellip; </span></strong></h4> <ul > <li ><span >So folks likely would like to see how to potentially think about playing momentum squeeze / FOMO / HYPE scenarios like this&hellip; we&rsquo;ll do Macro Dragon think piece around that. Yet lets cover what few folks fail to talk about, how to NOT lose your shirt, blow up your account&hellip; etc&hellip;</span></li> <li ><span >So we will start it with the problem formulation of: If one really want to maximize the probability of losses &amp; taking outrageous risks on memes stocks, how would one go about doing so?</span></li> <li ><span >Selling naked call options (i.e. not owning the underly security) is one of the ultimate sins in trading &amp; risk-management. The point being, there is potential infinite losses here. </span></li> <li ><span >Example: There is Wood Chipper company (ticker OUCH) &nbsp;trading at $100 per share, that has a monopoly on all the Wood Chipping business &ndash; its <a href="https://www.youtube.com/watch?v=CJFn3foaPtI">CEO &amp; Chairperson is a Furio Giunta</a>. One sells 10,000 of the 1m ATM call options for $10 per call, netting $100,000. </span></li> <li ><span >Which for an account with $1,000,000 (basically 11yrs of pre-tax annual income of the average American) in capital looks amazing, i.e. going to make +10% a month, +120% a year&hellip; this trading game is &lsquo;easy peasy&rsquo;&hellip; move over Buffett&hellip; clear the way Soros&hellip; there is new Sherriff in town! <br /> <br /> Happy days, one just has to sit tight for 30days &amp; one&rsquo;s break-even is $110, i.e. stock can move up by +10% before one starts to lose money, everything else being equal. And if we get above our break-even lvls of $110, &nbsp;one can just cover. Right? </span></li> <li ><span >In most cases, yes (assuming you are sticking with big liquid names)&hellip; but in this case&hellip; </span></li> <li ><span >&hellip;the day right after the calls are sold, OUCH gets a take-over bid for a +100% premium. Yet it re-rates to $250 because, new counter offers are also expected &amp; this could be the mother of all take-over bidding wars &hellip; </span></li> <li ><span >&hellip;and your short call position is now 110 &ndash; 230 = -120 on just strike to spot, a +12x loss on the original premium you made of $100,000 from selling the stock&hellip; or a drag of -$1,200,000 (loss of -120%) on what was $1,000,000 of capital. But&hellip; </span></li> <li ><span >&hellip; the loss is actually going to be much higher, because volatility would have also exploded in the name as it re-rated from $100 to $250&hellip; &amp; one is still not out!&nbsp;&nbsp;<br /> </span></li> </ul> <p >-</p> <p >&nbsp;</p> <p><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span><span ><br /> </span></p> <p ><span >This is The Way </span></p> <p><span >Namaste,<br /> <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equity-options">Equity Options</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/options">Options</a> <span>Nasdaq</span></div>Thu, 03 Jun 2021 08:00:00 Z2024-02-10T12:16:55Z{D0CA5B3E-BE3B-473D-8EDB-FE33A7A6AEDB}https://www.home.saxo/en-mena/content/articles/equities/md-reflections-01062021Kay Van-Petersenproduct-equitiesproduct-bondsproduct-macroproduct-equity optionsproduct-optionseditorial-nasdaqMacro Dragon Reflections: Is Beyond Meat the next GameStop? Thoughts on the Jan-Feb Short Squeeze.... THE HIVE, AMC, GME, BB & BYND... <div class="article-excerpt">In the latest Macro Dragon Reflections think piece, KVP takes a look at the Jan-Feb short-squeeze that grew from a WSB forum on Reddit & seems to be picking up again. <br><br>He delves into the concept of THE HIVE, whether BYND $145.42 or AMC $26.12 or BB $10.07 is the next GME $222.00, whilst comparing some of the recent moves we saw last wk with earlier in the year. AMC finished last wk up +112% (at one point it was up +200%)) & is now +1132% YTD. BYND clocked last wk at +37%, with GME & BB at the back with +26% & +18%.</div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon Reflections: Is BYND the next GME? Thoughts on the Jan-Feb Short Squeeze... THE HIVE, AMC, GME, BB &amp; BYND...&nbsp;</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> </h4> <h4 class="heading--4" ><strong><span >Reflections&hellip; </span></strong></h4> <ul > <li ><span >Like all the best research pieces out there, the objective here is to enhance reflection, inversion &amp; recalibration in your own research &amp; analysis &ndash; if you&rsquo;re looking for KVP to tell you what to do with your capital, you should have KVP run your capital. Great research is like great books, coaches, teachers, mentors, classes, seminars&hellip; they help you think, enhance your frameworks &amp; ideally move your craft to ever higher highs. </span></li> <li ><span >As always, keep what resonates, discard the rest &amp; add your own spark.</span></li> </ul> <ul > <li ><span >Its going to be a &ldquo;long&rdquo; piece, as my man QB likes to say, &ldquo;KVP &ndash; sometimes you got to go DEEP&rdquo;. Here is the goldfish summary, for the focus-impaired:</span></li> </ul> <ul > <li ><span >THE HIVE is here to stay, evolve &amp; eat away, at the free lunch that has been Wallstreet&rsquo;s sway. Whilst GME Friday close of $222.00 +26% last wk, firmly held the spotlight in the share squeeze in Jan/Feb of this year, AMC now has a YTD return of +1132%, that above GME, post Fri close of $26.12 &amp; a +112% move last wk.</span></li> </ul> <ul > <li ><span >One key technical chart delta? </span></li> </ul> <ul> <li ><span >GME is still -54% from its ATH of $483, while AMC is breaking out higher on the weekly chart to ATH. </span><a href="https://www.youtube.com/watch?v=qbeC2Smt_uI" >AMC seems to be in numero uno position on the reddit charts in regard to volumes of mentions, whilst Blackberry [BB $10.07 +18%] is numero duo &amp; GME is now in third place. Other names that have been mentioned on recent reddit rosters are BYND $145, +37%; EXPR $4.29, +26%; KOSS $23.07, +35% (weekly closing prices &amp; performance).</a></li> </ul> <p ><span ><img alt="AMC Weekly Chart" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/amc-weekly-chart.png?h=417&amp;w=667" /><br /> </span></p> <ul> <li ><a href="https://www.youtube.com/watch?v=aIeWY3JWYl8" >And whether you love Cramer or hate him, remember you job as a trader or investor is to entertain different ideas, frameworks &amp; scenarios&hellip; one&rsquo;s imagination is heavily correlated to one&rsquo;s long-term success in the craft of compounding wealth.</a><span > This guy has been ahead of his time by decades&hellip; he is the OG financial social influencers talking to the masses, rather than the elites&hellip; &amp; yes, he should also Pass Go &amp; collect +$100m as he joins Spotify / Amazon / U-Tube &ndash; a la Joe Rogan.&nbsp;</span></li> </ul> <ul> <li ><span >Point here is not whether or not AMC or BYND or BB is the next GameStop +2000% squeeze &ndash; the point is, its only a question of time before we see a repeat of the dynamics that played out earlier this year.</span></li> </ul> <ul> <li ><span >And in case you missed it on Fri, </span><a href="https://www.home.saxo/en-sg/content/articles/podcast/podcast-may-28-2021-28052021" >the Daily Saxo Market call weighed in briefly on the &lsquo;Reddit Army&rsquo; before we went into the long Memorial Day wkd in the US.</a><span > Note how they flagged that last wk saw AMC traded more volume than the volume king Tesla, despite Tesla having a market cap that is +47x larger.&nbsp;</span></li> </ul> <ul> <li ><span >Tue Jun 1</span><sup >st</sup><span > could be an interesting open on the US equity markets, not to mention NFPs on Fri.&nbsp; &nbsp;&nbsp;</span></li> </ul> <h4 class="heading--4"><strong ><span ></span></strong><strong ><span >HIVE &gt; Goliath: </span></strong><span >Reflections on THE HIVE, Wallstreet vs. Mainstreet &amp; the Zeitgeist of the Times...</span></h4> <ul > <li ><span >Many have come, yet few are chosen. </span></li> </ul> <ul> <li ><span >Consistent success in investing, let alone trading the markets is far from given, in fact, it&rsquo;s the inverse &ndash; it is almost absolutely not guaranteed. There is a reason the vast majority of Hedge Funds, Mutual Funds, prop traders, investors, speculators, punters, stunkers, tik-tokers, apes, snakes, day traders &amp; everyone else, underperforms the market.</span></li> </ul> <ul> <li ><span >Take a step back &amp; just let this sink in &ndash; its hard to think of many industries in the world, that attract (wastes?) the brightest &amp; most driven of talent, with near infinite capital &amp; resources that come into finance, all with the objective of making money (for themselves). Given all these factors &amp; everyone trying to fish in the same crowded pool, with the same crowded strategies, there a few successful outliers.&nbsp; &nbsp;</span></li> </ul> <ul> <li ><span >There is a reason why there is only one Stan Druckenmiller - something like 120 quarters of wins out of 124, +30yrs of +30% annual returns, etc - who&rsquo;s feats both in global macro &amp; ninja philanthropy are legendary. In regards to known GOATs in Global Macro, no one else even comes close.&nbsp;</span></li> </ul> <ul> <li ><span >Yet the paradox is, no one picks up a book on basketball or watches videos on football or the NFL over a wkd, then walks in Monday claiming to be the next </span><a href="https://www.lebronjames.com/" >Lebron James</a><span > or </span><a href="https://en.wikipedia.org/wiki/Sue_Bird" >Sue Bird</a><span > or </span><a href="https://en.wikipedia.org/wiki/Mia_Hamm" >Mia Hamm</a><span > or </span><a href="https://en.wikipedia.org/wiki/Tom_Brady" >Tom Brady</a><span >. No one goes home on Friday with a tome on neuro-surgery &amp; expects to be taking tumors out of brains on Monday. No one hits the gym for the first time &amp; expects to walk our a Mr. Olympia &ndash; an endeavor that likely takes minimum 10yrs of the most disciplined training, dieting, vision &amp; hard-work.</span></li> </ul> <ul> <li ><span >Yet people take home the latest </span><a href="https://jackschwager.com/" >&lsquo;Market Wizards&rsquo;</a><span > or watch a &ldquo;How I made Millions Trading&rdquo; video &amp; expect to be the triad of Warrant Buffet, Paul Tudor Jones &amp; Ray Dalio come Monday morning.</span></li> </ul> <ul> <li ><span >There is Potemkin low barrier of entry into the world of investing &amp; trading, after all one just needs to open an account, fund it with some capital &amp; push some buttons right?</span></li> </ul> <ul> <li ><span >Wrong.&nbsp;</span></li> </ul> <ul> <li ><span >Deep in their hearts most professional money managers know they got into the right role, at the right time &amp; a big part of it was based on four words &ndash; L.U.C.K. You think you have imposter syndrome, these guys &amp; gals have it to the power of infinity. If it was all about grit &amp; brains, then all the world&rsquo;s richest traders would be PHDs. Its easier to be a professional footballer or NFL player than to be a consistently profitable trader, who can make money regardless of the changes in market regimes, as well as whether the greater economy is in an expanding, contracting or mixed phase.&nbsp;&nbsp;</span></li> </ul> <ul> <li ><span >So with this indigestible truth, you can imagine the furor that Wallstreet felt when </span><a href="https://www.reuters.com/lifestyle/wealth/hedge-fund-melvin-capital-lost-49-its-investments-q1-source-2021-04-09/" >Melvin Capital suffered billions in losses earlier this year</a><span > from having opposite positions from some hardcore tribal advocates (who had done their due diligence &amp; research on the stock on what was a popular but non-mainstream forum on a medium called reddit. What retail traders besting professionals? How preposterous is that?</span></li> </ul> <p >&nbsp;</p> <h4 class="heading--4"><strong><span >GameStop [GME] $222.00, </span></strong><strong><span >+1078% YTD, M-Cap $16.5B </span></strong><strong><span >| AMC Ent. [AMC] $26.12, </span></strong><strong><span >+1132% YTD, M-Cap $13.0B</span></strong></h4> <ul> <li ><span >The GameStop [GME] squeeze that we saw earlier this year, saw the stock move from a low of $17.08 to a high of $483.00. That is a move of +28x or +2700%. For context, if one was long $10K of GME, that spiked in value to +$280K in a matter of weeks. And if you had bought call options in the early part of the move - before volatility exploded - you likely made a lot more than +13x, even if you did not get out at the peak!</span></li> </ul> <ul > <li ><span >In fact some of the best YTD performers in KVP&rsquo;s inner circle picked up quite a bit of alpha from the WSB|RB phenomena. Naturally we only tend to hear about the winners&hellip; few people talk up their losses. In the craft of compounding wealth consistently overtime, everyone seems to be Casanova. </span></li> <li ><span >Whether you made a fortune, lost a fortune or were on the sidelines eating popcorn &amp; sipping on slurpees earlier this year - THE HIVE is real, its arrived &amp; its here to stay.</span></li> <li ><span >For the first time ever, THE HIVE &ndash; that is the decentralized, non-institutionalized users of the internet, be they on TikTok, WSB, TW, SNAP, IG, ClubHouse, WeChat, LINE, WhatsApp, Messenger, RobinHood &amp; other trading platforms &ndash; made the incumbents sit up &amp; shake in their mighty boots. <a href="https://www.pcgamer.com/the-white-house-is-monitoring-the-situation-as-reddit-pushes-gamestop-stock-even-higher/">It was also something that was discussed by the highest powers of the political office from senators to the White House. </a></span></li> <li ><span >Its sounds nice &amp; Hollywood to say Mainstream pulled a big one on some of Wallstreet&rsquo;s greatest sharks (<a href="https://www.nasdaq.com/articles/hedge-fund-melvin-capital-lost-49-on-its-investments-in-q1-source-2021-04-09-0">Multi-billion dollar infusions were needed &amp; apparently one HF was down close to -50% for its 1Q21</a>) who were heavily positioned as short the stocks, yet there were also other sharks (HFs) on the long side helping to fan the flames of the fire. As they say&hellip; when there is blood in the water&hellip; lets go kill somebody.&nbsp; </span></li> <li ><span >GME fell by about -90% from its peak, which coincided with the infamous decision where RB (&amp; other brokers &amp; banks) would not allow anyone to buy more GME shares, yet were happy for folks to sell them.</span></li> </ul> <p ><span ><img height="255" alt="GME Price Chart" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/gme-price-chart.png?h=255&amp;w=469" /></span></p> <ul > <li ><span >At $222 GME is still YTD up +1200% (an. that&rsquo;s c. +2900%) it is making crypto look like an old-school blue-chip IBM stock. Afterall as of Mon Asia evening, Bitcoin &amp; Ethereum are &lsquo;only&rsquo; up +20% &amp; +200% YTD. </span></li> </ul> <ul> <li ><span >For the first time in decades &amp; some would say in modern day history, the structural political zeitgeist in the US &amp; much of the world is truly one of populism, its one of finally having Mainstreet over Wallstreet (Apes over Snakes). And it&rsquo;s a fair point, at the end of the day banks (incumbents) have been the paragon of &ldquo;tails we win, &amp; heads the taxpayers loses&rdquo; &ndash; socialize the losses through bailouts, privatize the gains through stock-options &amp; great compensation packages. All the while getting their back covered by their clubby central bank brothers &amp; sisters, who will go on to get paid 6-7 figures for speaking gigs &amp; board seats, post their &lsquo;public service&rsquo;.</span></li> </ul> <ul> <li ><span >Whether you are going back to The Savings &amp; Loans Crisis, LTCM, Asia Crisis and of course the subprime mortgage crisis. One has to think, this has to be one of those paradoxical occurrences in human history where so few people, made consistently so much, with zero accountability at the cost &amp; damage to so many. If aliens were truly sightseeing through our galaxy, its unclear whether they would be wetting themselves in laughter, tears or just quiet disbelief. And if you are wondering how we ended up in an MMT &amp; pitchfork populist world &ndash; well all those decades of bailouts &amp; closed circle clubs has played a huge structural role in this. Kharma is like energy, it is never destroyed&nbsp; &nbsp;&nbsp;</span></li> </ul> <ul> <li ><span >Add to that the acceleration of internet connectivity across all different kind of platforms, mediums &amp; in some cases, brand new asset classes like crypto (DeFI vs. CeFI), that allow Mainstreet to have just as good tools &ndash; in some cases better &ndash; than their institutional peers, as well s platforms in which to discuss &amp; shares their views with similar minded people.</span></li> </ul> <ul > <li ><span >Bottom line, advantage THE HIVE.</span></li> </ul> <ul> <li ><span >Bottom line, the Jan-Feb 2021 squeeze was not a one &amp; done affair&hellip; whether its another round on GME or its BB turn or BYND or AMC or neither of the above is beside the point. The point is, you ignore THE HIVE at your peril if your short certain stocks, that have large amount of short-interests.&nbsp;</span></li> </ul> <ul> <li ><span >This is only THE HIVE&rsquo;s first form. Yes, there will be a lot of noise, an inverse of co-ordination &amp; tons of money lost&hellip; but overtime, just like a virus, THE HIVE will evolve, there will be more streamlined backing of companies, yet no clear cohesion, there will be more signal &gt; noise.</span></li> </ul> <ul> <li ><span >At the end of the day what&rsquo;s the difference between a Hedge Fund manager talking up her long or short at a conference, or a redditor talking about a name that they are full Ape into, because Number Go Up. Yes, one should be more qualified to run risk than the other, yet this is about democratization of that decision to take risk.&nbsp;</span></li> </ul> <ul> <li ><span >Now you may think, why should one ever buy a meme stock (or crypto) or cover a short in a meme stock &ndash; surely the vast majority of the constructs out there are pump &amp; dump. Afterall how can we all have Diamond Hands, get towards financial independence, yet somehow never sell? (And yes some of the influencer type vids out there will make you wanna throw up in disgust, </span><a href="https://www.youtube.com/watch?v=GZTr1-Gp74U" >yet there are also analysis &amp; research pieces from THE HIVE that are just as good if not even better than traditional research.)</a></li> </ul> <ul > <li ><span >Yet, this is not about being &ldquo;right&rdquo; or &ldquo;wrong&rdquo; its about the magnitude of money you make on your wins, vs. the magnitude of money you lose on your loses. Melvin capital was reportedly making money hand over first for the last few years, before running into THE HIVE.&nbsp; </span></li> </ul> <ul> <li ><span >The catalyst for the pathway is not relevant. Event-Driven, is Event-Driven.</span></li> </ul> <ul> <li ><span >Whether your Empress Warrior or Prince Charming rides in on a Unicorn or Hippopotamus is beside the point, they are there if you are worthy of them.&nbsp;&nbsp;</span></li> </ul> <ul> <li ><span >AMC is a very different beast than GME (Cinemas vs. Game Stores) &amp; a more natural levered play on the re-opening of the US economy. AMC mkt cap is c. 22% smaller at c. $13bn vs. GME&rsquo;s $17bn. They have a similar percentage of short interest to floats at c. 20%, yet GME&rsquo;s is 3.1x days to cover is double AMC&rsquo;s 1.6x.</span></li> </ul> <p ><img height="257" alt="AMC Price Chart" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/amc-price-chart.png" /></p> <p>&nbsp;</p> <ul > <li ><span >The stock Lamboed to the moon in early Jan with a c. +900% lift, before pulling back by over -70%. Since that trough, the name has gone to rise by another +370%. </span></li> <li ><span >They also likely have predominantly different tribes in THE HIVE, as the incentives is to get enough critical mass from a network effect to drive a chain reaction in the squeezing of the stocks that Wallstreet are short &amp; hate. Not saying that there is no overlap, but there are risks to one&rsquo;s tribe switching fully to rally to another flag. Everybody wants to be Diamond Hands, yet no one wants to be the last Diamond Hand. There is a reason that GME is still in the top three of stocks being discussed on Reddit.</span></li> </ul> <ul > <li ><span >Whilst the key events for Jun in regards to stock sentiment being bullish or bearish are likely going to be US NFP on Jun 4, US CPI on Jun 10 &amp; Fed decision on Fed 16 &amp; &ndash; another big NFP miss or new CPI miss could be construed bullishly by the market, indicating the Fed needs to slow its roll. Yet a massive NFP beat (+650k e this Fri) and/or another CPI beat, may do the opposite causing yields to move higher &amp; the market to calibrate that the Fed needs to pick up the pace for their Jun 16 meeting.</span></li> </ul> <ul > <li ><span >It&rsquo;s worth noting GME should be set to report on Jun 4<sup>th</sup> &amp; the on the last earning call from AMC, Adam Aron, AMC&rsquo;s CEO (referred to as &lsquo;Silverback&rsquo; by the Apes) <a href="https://www.cnbc.com/2021/05/07/amc-ceo-adam-aron-raved-about-its-reddit-investors-on-an-earnings-call.html">recently addressed THE HIVE in the company&rsquo;s last earnings report</a>.</span></li> </ul> <ul > <li ><span >As per the CNBC article quoting from the <a href="https://services.choruscall.com/links/amc210506.html">company&rsquo;s webcast</a> </span>&ldquo;These individual investors likely own a majority of our shares&hellip; They own AMC. We work for them. I work for them.&rdquo;</li> </ul> <ul > <li >Seriously just take a step back &amp; process that! Can you imagine a Dimon or Gates saying that? This is the Trump &amp; decentralization effect of the internet, where principals/employees, CEOs/owners, capitalists/investors, politicians/voters talk directly to one another &ndash; rather than through the traditional centralized gate keeping &amp; controlled information channels [read Wallstreet, Institutional Research, Traditional Media, etc].&nbsp;</li> </ul> <ul > <li >Volatility was crazy early this year on both GME &amp; AMC, with figures of 1000 being hit!</li> </ul> <p ><img height="319" alt="CMT Vol Chart" width="714" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/cmt-vol-chart.png" /></p> <ul > <li >AMC&rsquo;s current IV is c. 290, it hit 1017 in early Feb, before collapsing by more than -90% to c. 85.</li> </ul> <p ><img height="319" alt="GME Vol Chart" width="714" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/gme-vol-chart.png" /></p> <ul > <li >GME&rsquo;s current IV is 167, it hit 999 om early Feb, before collapsing by c. -90% to c. 110.</li> </ul> <h4 class="heading--4"><strong><span >Beyond Met [BYND] $145.42, </span></strong><strong><span >+16% YTD, M-Cap $9.2B</span></strong></h4> <ul > <li ><span >The interesting thing about <a href="https://www.beyondmeat.com/about/">Beyond Meat</a> [BYND] is we&rsquo;ve covered it on the Macro Dragon since it listed, as KVP loves the sustainability theme &amp; believes +25-50-100yrs when we look back we&rsquo;ll be absolutely gob smacked that we took animal protein at such a cost to the rest of the planet&rsquo;s biosphere &amp; life. Akin &ndash; at least in the US &amp; most developed countries &ndash; to looking back at cigarette smoking 40-60yrs, which used to be marketed as dessert.</span></li> </ul> <p ><span ><img height="259" alt="BYND Price Chart" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bynd-price-chart.png" /></span></p> <p ><span >&nbsp;</span></p> <ul > <li ><span >The back of the envelop macro thesis on BYND is simple; Estimated market of +$7.5T of total Animal Protein market by 2025. Assume 10% of that goes to the Alternative Protein players ($750B = 10% * $7.5T), of which BYND captures 10%, so $75bn. Current BYND mkt $9B, so +4-9x potential in next 3-6yrs? Completing ignoring organic growth of the alternative protein space.&nbsp;&nbsp;</span></li> </ul> <ul > <li ><span >And <a href="https://hindenburgresearch.com/nikola/">this is not Nikola [NKLA] with doctored videos from Trucks rolling down hills</a> with a mkt cap of $6bn &amp; negligible revenue. BYND did +$407m last year &amp; are expected to take that to +$564m for 2021, before growing by +50% to +$851m in 2022. They continue to focus their capex on R&amp;D, with a strategy for the long-term game. 2020 was a mixed bag for them, initially crushing it in the 1<sup>st</sup> half (better than expected sales as folks stocked up due to lock-down), yet seemingly that seemed to lead to a cannibalization on their 2<sup>nd</sup> half (combination of customers still having inventory, lock-down across the US &amp; parts of the world, having to change distribution strategy in Germany [where they are a top 5 brand, up there with Tesla] &amp; we&rsquo;ll likely need another quarter or two for things to fully wash through &ndash; as is the case on the covid-induced logistics system.</span></li> </ul> <ul > <li ><span >The usual pushback/cons/bearish framework has been there is a lot of competition in the space &amp; its only going to set to increase. Impossible will eventually list, if its not already on someone&rsquo;s SPAC menu. The incumbents like Tyson food are also making ground on their own alternatives protein meats. Sustainability is a fad &amp; long-overdue for a correction. Growth is dead, long live value.</span></li> </ul> <ul > <li ><span >Yet a few interesting factors have now emerged: </span></li> </ul> <p ><span >1. BYND could potentially become a HIVE stock [what PM wants to walk into the CIO room &amp; explain a short squeeze post what happened to Melvin], was never part of the original thesis&hellip; but cult stock like tesla or tencent was always the potential icing on the cake. </span></p> <p ><span >2. At $145 BYND is c. -40% from its ATH of c. $240 which it hit in the summer of 2019. Earlier this year during the WSB|RB Squeeze it got to $221 by the end of Jan, finding a 3wk run of +51% (so far we are on a 2wk run of +38% - yet worth noting growth has been killed over last few wks, so likely also a mean-reversion element on growth &gt; value performance wise) </span></p> <p ><span >3. According to Bloomberg there is a 26% short interest on its float (which granted is c. 3.4x days to cover). <br /> <br /> 4. They continue to make JV &amp; new partnerships, from Pepsi to inroads in China, etc. </span></p> <p ><span >5. Oatley [OTLY] another sustainable alternative play - focused on alternative dairy - recently listed &amp; has a market cap of $14bn, is a much older company &amp; clocked +$420m in rev in 2020 (granted +100% growth) &ndash; main point here is not substitution, but the investment theme is &nbsp;growing which will continue to attract a narrative &amp; story, which leads to further capital from investors.</span></p> <ul > <li ><span >Volatility wise &ndash; we got to c. 124 during the Jan/Feb squeeze, before collapsing by c. -80% to 24. Current IV is 61, which is lower than recent 10D &amp; 30D HV (note this is likely due to BYND sell-off post recent earnings). 100D HV is 64.25. Out of the names discussed in this think piece, BYND does not have elevated IV, which intuitively could indicate that its either early in becoming a contender to THE HIVE crowd, or its not going to be one to find a credible following &amp; is just noise.</span></li> </ul> <p ><img height="296" alt="BYND Vol Chart" width="671" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bynd-vol-chart.png" /></p> <p >&nbsp;</p> <h4 class="heading--4"><strong><span >Blackberry [BB] $10.07, </span></strong><strong><span >+52% YTD, M-Cap $5.7B</span></strong></h4> <ul > <li ><span >Have not looked at Blackberry [BB] in ages, yet let us take a quick look at price action in early Jan &amp; also get a sense of volumes, short interest, volatility, etc.&nbsp; </span></li> <li ><span >In Jan, BB had 4 weekly runs of +113% going from $6.63 to $14.10, which included an intra-week high of $25.10 - +280% from $6.58 Jan lows &ndash; before pulling back by close to -70% from peak to trough. </span></li> </ul> <p ><span ><img height="253" alt="BB Price Chart" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bb-price-chart.png" /></span></p> <ul > <li ><span >Just to give context on volumes, the avg 12 month volume on BB is 60M, on the last wk of Jan the stock did 1.3B basically +21x. </span></li> <li ><span >Its volume last wk? 200m so c. +3.3x&hellip; So clearly significant, yet naturally would have to continue if this really is another squeeze in the making. </span></li> <li ><span >The Mkt cap is c. $6bn, with a short interest to float ratio of 10% &amp; c. 7.7x days to cover ratio &ndash; which is actually the highest of the names discussed. </span></li> <li ><span >Worth also noting that current IV on ATM $10 strike Jul 16 calls are 102 vs. the 30D HV of 57. Point here being (if your long the option) its not just about the option getting ITM, one also needs volatility to ideally also explode or at the very least stay equal to when you bgt it. </span></li> <li ><span >Back in Jan &amp; Feb we got to over 400 in volatility, before it collapsed by -85% to c. 58. Current IV is 109. </span></li> </ul> <p ><img height="307" alt="BB Vol Chart" width="696" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/bb-vol-chart.png" /></p> <p >&nbsp;</p> <strong></strong> <h4 class="heading--4"> Overview Table</h4> <ul > <li ><span >So while a lot of this data &amp; propositions may be anecdotal &amp; fall all we know, these stocks have hit their peaks last wk, but thought it would be interesting to consolidate the names on a table for an overview.<br /> <br /> <img height="141" alt="Overview Table THE HIVE Think Piece" width="657" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/overview-table-the-hive-think-piece.png?h=141&amp;w=657" /><br /> <br /> </span></li> <li ><span >Net-Net BB currently looks the most interesting on just a few of these metrics that we&rsquo;ve; its got 7.7x days to cover its short interest. Whilst its IV is nearly double its HV, its still has a potential +4x move to match the high of 455 set in Feb. It also had the smallest lift of the four names last wk at +18%, despite having the most significant wkly volume at +2.9x (over 5wk avg. volume). Blackberry also has the smallest mkt cap of the 4 names at c. $6bn. Cons would be its already up +52% YTD, which is obviously a drop in the water vs. GME or AMC.</span></li> <li ><span >BYND is gets marks for having the lowest YTD at +16%, its IV is lower than it HV &ndash; granted its high vol in Feb at 124 was well south of the other 3 names. It is also tied with GME on short-interest to float ratio, yet comes out as number two on the days to cover. A smaller mkt cap than GME &amp; AMC is likely a plus as well. &nbsp;</span></li> <li ><span >GME &amp; AMC are quite interesting &ndash; technically speaking AMC looks interesting from a chart perspective, more significant volume last wk at 1.6x vs. 0.9x &amp; topped Tesla on value trade! Yet GME has a higher short-int to float coverage at 26%, higher days to cover at 3.1x vs. 1.6x, &amp; potentially higher opportunity for volatility to spike to its Feb highs, +6x vs. +3.5x. </span></li> <li ><span >What they both don&rsquo;t have doing for them is they are already up over +1000% YTD, which may make it harder to rally more people to their flag. </span></li> <li ><span >Naturally we are doing a lot of rhyming with history here, yet some form of a blueprint tends to be better than none. </span></li> </ul> <p><span >-<br /> <br /> </span><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span><span ><br /> </span></p> <p ><span >This is The Way </span></p> <p><span >Namaste,<br /> <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equity-options">Equity Options</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/options">Options</a> <span>Nasdaq</span></div>Tue, 01 Jun 2021 00:00:00 Z2024-02-03T12:19:57Z{078046BC-E540-490F-9BD4-07E19B822BC5}https://www.home.saxo/en-mena/content/articles/macro/md-mon-31-may-2021-31052021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK # 23 - An Event-Driven June: NFP, Fed, Inflation, Fiscal Spending, Re-openings & Crypto..<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 23 - An Event-Driven June: NFP, Fed, Inflation, Fiscal Spending, Re-openings &amp; Crypto...</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #2</span><span>3<span >&hellip;</span></span></li> <li ><span>To our US brethren, as well as those that set their global macro trading calendars on the US&rsquo;s heartbeat &ndash; happy memorial day wkd, catch you guys on Tues.</span></li> <li ><span>Clients sometimes ask why does KVP keep going on about the US from a geopolitical, cross-assets &amp; investing stand-point? Two things&hellip; </span></li> <li ><span>One: The vast distribution of our traders &amp; investors are on US assets &ndash; yet granted it&rsquo;s a bit of a chicken &amp; egg problem. </span></li> <li ><span>Two: The US by far is the big blue whale in the corner of Global Macro from being/having:</span></li> <ol > <li ><span>Dominant global reserve currency, <a href="https://www.youtube.com/watch?v=jsDwMGH5E8U">that leads to +80% of global trade being conducted in USD.</a> Hence the importance of what is really the Global Central Bank, the Fed. If the US sneezes, the world tends to catch the cooties. As well as also why a lot of other trading blocks from the EU, to Asia &amp; most notably China, Russia &amp; Iran want an alternative to the global bloodline of the USD. </span></li> <li ><span>Largest GDP in the world at c. 26% of total global economy, yet with only 4% (330m) of global population. </span></li> <li ><span>Biggest investable markets by far on a cross asset basis: +$50T in equities (c. 50% of Globe&rsquo;s listed Universe Space), +$20T in government bonds, +$17T in property, the most valuable companies in the world, Silicon Valley, Wallstreet, etc.</span></li> <li ><span>Geopolitical power &amp; outstanding military might &ndash; as a function of the dynamics of world emerging out of WWII, which cemented the UK &amp; sterling passing the global dominance torch over to the US. </span></li> <li ><span>Naturally endowed country that is rich in resources &amp; is a consumption driven economy &ndash; which incidentally enough makes it very different from the likes of the export driven EU, JP &amp; CH. </span></li> <li ><span>It&rsquo;s a relative world &amp; when it comes to rule of law, education, healthcare, global talent, culture, homogeneity, </span></li> </ol> <li ><span>With that set for context, looking into the month of Jun there are a number of potentially key events that could move markets:</span></li> <p ><strong><span>US NFP, this Fri 4 Jun</span></strong><span>: &nbsp;if you recall we had a fabulous miss in last month&rsquo;s numbers, where c. 1m was expected &amp; 266K came in, a -734K miss &ndash; one of the biggest on record. We are still &lsquo;short&rsquo; c. 8m jobs since pre-Covid lvls. </span></p> </ul> <ul> <li ><span>KVP feels if the Apr NFP print of 266K was not the low, then there is a high probability that it is going to be the May one. </span></li> </ul> <ul> <li ><span>Translation = Jobs are going to start coming back fast &amp; its not going to be linear. </span></li> </ul> <ul> <li ><span>We have vaccine roll-out past critical mass, re-openings across states, <a href="https://www.tsa.gov/coronavirus/passenger-throughput">flights are almost back to pre-covid lvls</a>, &amp; <a href="https://time.com/nextadvisor/in-the-news/states-ending-unemployment-benefits-early/">perhaps most importantly some states (+23 now) opting out of the Federal Stimulus package for the unemployed</a> &ndash; which basically will occur over Jun. </span></li> </ul> <ul> <li ><span>The idea on the latter, is to spur people to get back to work sooner, rather than wait until Sep 6 when their stimulus cheques were set to expire. We are also seeing evidence of wages going up &amp; 4 figure sign-on bonuses, as employers &amp; businesses try to fill jobs. </span></li> </ul> <ul> <li ><span>Translation = Jobs are going to start coming back fast &amp; its not going to be linear.</span></li> </ul> <ul> <li ><span>This has been the focus of the Fed, NOT inflation. Key natural risk to this is obviously, new viral hybrid like we are seeing in parts of Asia that is putting us back into the whole hammer &amp; dance groove. </span></li> </ul> <ul> <li ><span>Current NFP expectations for this Friday are currently 650K, a big miss again would likely take us lower on US yields, the USD &amp; generally higher up on risk-assets, as well as thing like gold &ndash; which incidentally had a fantastic wk closing </span></li> </ul> <ul > <p ><strong><span>US CPI, Thu 10 Jun:</span></strong><span> Last months inflation figures were completely the opposite of the NFP in regards to direction, as they came in at a sizzling +4.2%a vs. 3.6%e YoY. On Core CPI side it was 3.0%a 2.3%e 1.6%p. </span></p> </ul> <ul> <li ><span>Apr headline CPI MoM was +0.8%a vs. +0.2%e. Core was 0.9%a 0.3%e/p.</span></li> </ul> <ul> <li ><span>This was a lot of noise &ndash; a clearer signal would have been NFP miss &amp; CPI miss, or both beating. And that could end up being mixed this time around. </span></li> </ul> <ul> <li ><span>If we get a coordinated beat or miss on both the NFP &amp; CPI, we could finally see the USD, US bond yields &amp; real-rates break-out of recent range trading lvls. </span></li> </ul> <ul> <li ><span>Current MoM CPI for May is 0.4%e 0.8%p, with core being 0.5%e 0.9%p. </span></li> </ul> <ul > <p ><strong><span>FED, Wed 16 Jun:</span></strong><span> For now this one seems extra opaque for KVP &ndash; really given the big miss on NFP&rsquo;s last month &amp; the big beat on Inflation, they can play it anyway. Hard to see the actual FOMC statement being a banger, its likely to fall to the Powell Q&amp;A press conference, &amp; even more likely the FOMC minutes on Jul 7<sup>th</sup> may be more potent (i.e. if there is a lot of discussion there around tapering or lack thereof).</span></p> </ul> <ul> <li ><span>A month or two back it was all about the Fed Jun meeting &amp; now it feels like the focus has moved to the 2<sup>nd</sup> half of the year, around the Jackson Hole end of Aug to the Fed&rsquo;s Sep 22 meeting. </span></li> </ul> <ul> <li ><span>Key questions on folks is when will they taper? Will they taper? When will they raise rates? Will they raise rates?</span></li> </ul> <ul> <li ><span>How does a Fed that is buying $120bn bonds a month (&amp; bought over +55% of treasuries issued in 2020, expanding their balance sheet by +76% to c. +30% of US GDP), manage to taper &amp; raise rates, when we have an administration (&amp; more importantly perhaps, social zeitgeist) that seems destined to keep on spending?</span></li> </ul> <ul> <li ><span>Someone needs to break out the crayons, blank pieces of paper &amp; explain this to KVP <a href="https://www.youtube.com/watch?v=ISDgcB-J4fQ">&ldquo;as you might to a young child or a golden retriever, it wasn&rsquo;t brains that got me here I can assure you of that.&rdquo;</a></span></li> </ul> <ul> <li ><span>Still hard to see the dot-plot not go up, as well as potential forecasts on growth &amp; inflation. </span></li> </ul> <ul> <li ><span>Links to last <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20210428a.htm">Fed Statement</a> &amp; <a href="https://www.federalreserve.gov/monetarypolicy/fomcpresconf20210428.htm">Press Conference</a>. </span></li> </ul> <ul > <p ><strong><span>US Fiscal:</span></strong><span> Whilst it seems to KVP the Administration has until Sep (before new fiscal budget year) to get a deal done either through unison with the Reps or through a full court press with the Dems &ndash; one gets the feeling the goal posts are being moved backward in regards to potential spending plans as we highlighted in last wk&rsquo;s <a href="https://www.home.saxo/content/articles/macro/md-mon-24-may-2021-24052021">Macro Dragon: Crypto's Freefall &amp; Biden Infra-Bill Downgraded to $1.7trn from $2.25trn...</a></span></p> </ul> <ul > <li ><span>Yet with that said, it now it looks like we are talking about a $6T budget for the next fiscal year (c. 30% of US GDP). </span></li> </ul> <ul> <li ><span><a href="https://www.whitehouse.gov/wp-content/uploads/2021/05/FINAL-FY22-Budget-Overview-Fact-Sheet.pdf">See Fact Sheet: The President&rsquo;s Budget for Fiscal Year 2022</a></span></li> </ul> <ul > <p ><strong><span>Re-opening</span></strong><span>: Over the course of the next 2-3m we will get a clearer picture of what is priced correctly or not, in regards to the economies of the US &amp; EU opening up to more normality. <br /> <br /> Still think works on the likes of ABNB, BYND could prove fruitful &amp; some of the names we&rsquo;ve been talking about for quite a spell like energy, insurers &amp; UK Equities should continue to do well.<br /> </span></p> </ul> <h4 class="heading--4"><strong><span >Rest of the Week Ahead &amp; Other Reflections...</span></strong></h4> <ul > <li ><span><a href="https://www.home.saxo/content/articles/macro/md-mon-24-may-2021-24052021">Our initial thesis last wk</a> that we could be seeing at least a near-term bottoming out on growth starting to outperform vs. value, continues to ring true &ndash; some of the names that have been severely under the pump in recent wks, had very decent pop last wk including: </span></li> <li ><span>BYND $145 +37% ; COIN $236 +5% ; PLTR $23 +11% ; &nbsp;ABNV $140 +4% ; ARKK $112 +6%</span></li> </ul> <ul > <li ><span>Our piece on Peloton seems to have been timely given the name is c. +20% from when we flagged it worth doing some work on: <a href="https://www.home.saxo/content/articles/macro/md-tue-18-may-2021-20052021">Macro Dragon: Reflections on Peloton [PTON] $92, -46% from its peak, +15% from recent lows</a>. At $110 it clocked +9% last wk, its 3<sup>rd</sup> consecutive up wk post the recall news in early May. </span></li> <li ><span>Overall it was a strong wk in equities with most major indexes well up over 100bp &amp; in the case of the China A50 +5.4% to 18,234 &ndash; best weekly performance since early Feb. See Peter Garnry&rsquo;s <a href="https://www.home.saxo/en-sg/content/articles/equities/are-chinese-stocks-ready-to-outperform-25052021">Are Chinese stocks ready to outperform?</a> </span></li> </ul> <ul > <li ><strong><span>GBPUSD c. 1.4050/1.4200</span></strong><span> just wait for the potential big break upward for sterling strength, across many charts we are on multi-year pivotal lvls. </span></li> </ul> <ul > <li ><strong><span>Econ Data:</span></strong><span> This wk will be focused on Final PMIs across the board, ISMs &amp; NFP data out of the US. We also have quarterly AU GDP 1.1%e 3.1%p &amp; retail sales. </span></li> <li ><span>No doubt there will be a lot of focus on Biden&rsquo;s proposed new Fiscal budget, the currently debated Infra Bill &amp; the Fed&rsquo;s Beige Book. Worth noting the US Economic surprise index is back to the lows seen at the end of 2020. </span></li> <li ><strong><span >CB: </span></strong><span>RBA 0.10% e/p, RBI 4.00% e/p <span ></span></span></li> <li ><strong><span >Fed speak:</span></strong><span > </span><span>There is quite a bit of Fed speak &ndash; yet Powell is set to speak on Fri at a BIS panel that is focusing on Climate. </span></li> <li ><span>Lagarde should also be speaking at the same Fri event.</span></li> <li ><span >BoE&rsquo;s Bailey </span><span>is set to speak on Thu.</span></li> <li ><strong><span >Hols</span></strong><span >: </span><span>US is out today on Memorial Day, so could be a quiet start to the Super Friday wk. <span >&nbsp;&nbsp;&nbsp;&nbsp;</span></span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> </span><span>Check out our recent <a href="https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=38s">Crypto Interview with The Spartan&rsquo;s Group Casper B. Johansen</a> &amp; yes, the increased volume for regulation coming out of the US is actually a massively positive structural aspect for the space. Translation: Regulation of Crypto = Acceptance of Crypto. </span></li> <li ><span><a href="https://www.ft.com/content/a2c13ce0-6e66-4751-aa65-6c668d303101">US regulators signal bigger role in cryptocurrencies market</a></span></li> </ul> <p><span >-<br /> <br /> </span><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span><span ><br /> </span></p> <p ><span >This is The Way </span></p> <p><span >Namaste,<br /> <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 30 May 2021 23:00:00 Z2021-09-21T10:41:21Z{996605A6-5CEF-4D5B-920C-22B9DECF8F9F}https://www.home.saxo/en-mena/content/articles/macro/md-mon-24-may-2021-24052021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubPrimary-CryptocurrenciesMacro Dragon WK # 22: Crypto's Freefall & Biden Infra-Bill Downgraded to $1.7trn from $2.25trn...<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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.</div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 22: Crypto's Freefall &amp; Biden Infra-Bill Downgraded to $1.7trn from $2.3trn...</h3> <h4 class="heading--4"></h4> <h4 class="heading--4" ><span><strong>Top of Mind&hellip;</strong></span></h4> <p class="Default" ><strong><span > </span></strong></p> <ul > <li ><span >TGIM &amp; welcome to WK #22&hellip;</span></li> <li ><span >So at least two things are standing out on the KVP skew for what is going to be a great wk ahead: the first is crypto &ndash; <a href="https://www.youtube.com/watch?v=SuYRYTjClEw&amp;t=28s">check-out our Latest Dragon Interview from one of the most interesting players &amp; firms in the space, Casper B. Johansen, Co-Founder &amp; Partner from The Spartan Group </a>&nbsp;&ndash; which KVP will do a later piece today called: &ldquo;Welcome to Crypto&hellip;&rdquo;, given some of the volatility that we have seen last wk in the space.</span></li> </ul> <p class="heading--4" ><img alt="" /><img height="255" alt="Crypt - WK 22" width="469" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/crypt---wk-22.png?h=255&amp;w=469" /></p> <p class="text--body-compact" > Source: Bloomberg &amp; Saxo Bank</p> <ul > <li ><span >Worth noting that the Fed&rsquo;s Brainard should be speaking at a crypto conference later today, which is that much more interesting given the IRS news last wk that&rsquo;s transfers of more than USD10k in Bitcoin have to be reported to the IRS (&amp; yes, that is continued legitimization, institutionalization, governmentalization&hellip;). </span></li> <li ><span >The Soprano fans &ndash; remember Furio? That was one of the best closing episodes when he knocks on the door of the loan shark that was giving Tony&rsquo;s restraint bud a hard time &ndash; will remember Carmela Soprano, practicing risk management, wealth preservation &amp; optionality by opening multiple accounts &amp; depositing sub USD10K (i.e. banks don&rsquo;t have to declare it). She also took it a step further, by correctly assessing the family business as high risk, she allocated the deposits to low risk investments like treasuries &amp; money market funds. &nbsp;&nbsp;&nbsp;</span></li> <li ><span ><a href="https://www.reuters.com/world/us/white-house-says-it-has-pared-down-infrastructure-proposal-17-trillion-2021-05-21/">The second is Biden, where we are seeing an infra bill that KVP originally believes had a +$3trn handle, go to $2.25trn &amp; now has been diluted to $1.7trn.</a> Now, intuitively from a spending negotiation context, one starts of with X &amp; the deal is closed at a discount to X. Yet this is shaving a clean $500bn off &amp; we are still not clear on a Dem/Rep agreement on the deal.</span></li> <li ><span >The potential near-term signal here is that, this administration may not be spending as much as was originally envisaged. And irrespective of whether that ends up being true or false, what it likely does is put a cap on US nominal yields (i.e. not as much debt coming as we envisaged just a wk ago), on inflation expectations &amp; real yields. </span></li> <li ><span >What it may also do is put a floor on some of the growth tech names that have been getting hammered, whilst their value, cyclical cousins have massively outperformed. Whether this is a permanent floor, or just some MR between the two groups will remain to be seen. </span></li> <li ><span >Yet last wk&rsquo;s charts &amp; price action alongside the likes of Peloton (chk out piece on this from last Tue: <a href="https://www.home.saxo/en-sg/content/articles/macro/md-tue-18-may-2021-20052021">Reflections on Peloton [PTON] $92, -46% from its peak, +15% from recent lows</a>), Coinbase, Palantir, AirBnB, Beyond Meat, Compass Pathways &amp; even the now infamous ARK ETF &ndash; suggest that those names &amp; that genre is trying to put in a floor. </span></li> <li ><span >Harder to know if there is a bigger effect on the USD, gold (likely still all about real rates), crypto, global currencies. Yet it should not be positive for commodities for a variety of different reasons: </span></li> <li ><span >1. They&rsquo;ve had an epic YTD start (just think annualized, most commodities are on track for +50% to +100% for the year), so folks are sitting on a lot of profits &amp; the noise continues </span></li> <li ><span >2. We know there are covid-induced supply constraints that are going to be coming off over the next few quarters as the world opens up </span></li> <li ><span >3. It&rsquo;s a super crowded trade &amp; crowded narrative &ndash; this does not make it wrong, yet makes it prevalent to sharp positioning rinsing </span></li> <li ><span >4. Does not look like we will be getting as much spending done by Biden as we thought just a week back &ndash; think of it this way, how much harder is it going to be to get more fiscal bills through, once the US has fully reopened &amp; we have regained c. 6 to 8m of the lost jobs since pre-Covid?</span></li> <li ><span >5. The 2, 5 &amp; 10yr break-even inflation charts [respectively 2.82%, 2.64% &amp; 2.45%] have reversed sharply from previous highs &ndash; whether this is a consolidation &amp; break before moving higher, or start of a reversal remains to be seen. </span></li> </ul> <p > <span ><img height="226" alt="BE - Wk 22" width="419" src="https://www.home.saxo/-/media/content-hub/images/macro-dragons/be---wk-22.png" /></span></p> <p class="text--body-compact" ><span >Source: Bloomberg &amp; Saxo Bank</span></p> <br /> <h4 class="heading--4"><span ><strong>Rest of the Week &amp; Other Reflections </strong></span></h4> <ul > <li ><span >US will see 2<sup>nd</sup> reading on 1Q GDP 6.5%e 6.4%p, core PCE which will likely be key focus, as well as personal income, personal spending, durable goods &amp; the weekly Thu jobless figures.</span></li> <li ><span >CH is data light this wk. Europe has final German 1Q GDP, GER IFO index, as well as regional CPI &amp; GDP data out of France. UK has house prices &amp; housing sector borrowing due. &nbsp;&nbsp;</span></li> <li ><strong><span >CB: </span></strong><span >Indonesia 3.50%e/p, New Zealand 0.25%e/p, South Korea 0.50%e/p </span></li> <li ><span >Fed speak: Brainard (later Mon @ a crypto conference! Is she a HODLer?), Bostic, Evans, Quarles. </span></li> <li ><span >BoE&rsquo;s Bailey speaking on Mon </span></li> <li ><strong><span >Hols</span></strong><span >: Quite a few countries are out today including Germany, France, Switzerland &amp; Canada. Worth noting the US should be out next Mon, 31 May on Memorial Day. So long wkd coming up in the US. &nbsp;&nbsp;&nbsp;</span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> </span></li> </ul> <p ><span >-</span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way<br /> <br /> Namaste,<br /> <br /> KVP</span></p> <p class="heading--4"> </p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/cryptocurrencies">Cryptocurrencies</a></div>Sun, 23 May 2021 23:00:00 Z2024-01-27T00:07:58Z{1B929506-E280-411C-8157-BA193E600436}https://www.home.saxo/en-mena/content/articles/cryptocurrencies/dragon-interview-with-casper-johansen-23052021Kay Van-PetersenPrimary-CryptocurrenciesInflationInflationSGFocus Inflationproduct-equitiesEducationproduct-forexproduct-forexproduct-commoditiessector-Commodityproduct-bondsproduct-bondsPrimary-CryptocurrenciesSetting the bell-curve in Crypto with The Spartan Group's Co-Founder & Partner, Casper B. Johansen<div class="article-excerpt">Our fifth Dragon Interview finally takes us to an exciting, controversial & new asset class that is dear to KVP's heart, Crypto. The first in a series of Crypto focused content, join us as we sit down with Casper B. Johansen, Co-Founder & Partner of The Spartan Group - an advisory & digital asset pioneer in the crypto space.<br><br>We take a walk-through Casper's background, how him & his co-founders stumbled across crypto, an overview of how to potentially think about this new, dynamic & constantly evolving space, as well as the rise of The Spartan Group.</div><div class="article-rte"><div class="rte--output"><h3 class="heading--3">Setting the bell-curve in Crypto with The Spartan Group's Co-Founder &amp; Partner, Casper B. Johansen&nbsp;</h3> <p>So we covered global macro trading with <a href="https://www.youtube.com/watch?v=KUMMeQWwMpg&amp;t=140s">the exceptional Ashvin Murphy from AVM</a>. Proprietary <a href="https://www.youtube.com/watch?v=M16pRNnQcE4&amp;t=698s">trading global currencies across banks with the talented Dacky (Keith Dack)</a>. As well as <a href="https://www.youtube.com/watch?v=qn4-73g2sqw&amp;t=298s">family office macro trader &amp; nature conservationist Geo Chen</a>. <br /> <br /> Yet you know we had to go crypto!&nbsp;<br /> <br /> <br /> For our latest Dragon Interview we had the pleasure of sitting down with an exceptional entrepreneur &amp; ex Goldman Sachs investment banker Casper B. Johansen.<br /> <br /> The first of a number of special series Dragon Interviews on Crypto, we cover a number of things on this first interview with Casper, including:<br /> <br /> -Casper's come-up story career wise, from being a Dane educated as a lawyer in the US &amp; jumping immediately to one of Wall Street's most prestigious banks, Goldman Sachs.<br /> <br /> -To his first tech start-up in Beijing in 2008, the folding of that a few years later alongside the stripes, lessons &amp; takeaways earned there.<br /> <br /> -To coming across crypto in 2017 initially as a VC investor &amp; the inception of The Spartan Group from that. We cover the set-ups, strategy &amp; long-term vision of the group, that Casper Co-founded with Melody He &amp; Kelvin Koh (all Goldman alumni).<br /> <br /> -We touch on the last bull market in 2017, as well as the "punched in the face" nuclear bear market that came after, that saw Bitcoin lose more than 80% of its value from its previous peak &amp; naturally a lot of tokens that went to zero.&nbsp;&nbsp;<br /> <br /> -We then delve deeper into crypto with an appreciation of decentralized vs. centralized, how to potentially look at the always evolving space, whilst also covering everything from:<br /> <br /> <br /> Bitcoin, to Ethereum, to DeFi (Decentralized Finance), to NFTs &amp; also touch on some of the pioneering players in the space including: Origin Protocol, Blockstack, Solana, Dapper Labs, Deribit, Blockfolio.<br /> <br /> There is a lot here to digest &amp; at bear minimum, likely one of two if not one of three more pieces to come from the dream team at The Spartan Group.<br /> <br /> We hope you enjoy the interview as much as we did putting it together.<br /> <br /> -KVP<br /> <br /> ps. For more <a href="https://blockcrunch.libsyn.com/">crypto related content one can also check out the BlockCrunch podcast</a>, that is run by crypto analyst Jason Choi, from Spartan Capital, the asset management arm of The Spartan Group.<br /> <br /> <a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA">For more Dragon Interviews please click here</a></p> <p>Namaste,</p> <p>-KVP</p></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=68812743"></iframe></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/cryptocurrencies">Cryptocurrencies</a> <span>Inflation</span> <span>InflationSG</span> <span>Focus Inflation</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>Education</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a> <span>Forex</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/commodities">Commodities</a> <span>Commodity</span> <span>Bonds</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/cryptocurrencies">Cryptocurrencies</a></div>Sat, 22 May 2021 23:00:00 Z2024-01-27T00:08:27Z{1C9F26A3-E20B-4491-8572-CD6476ABC8B0}https://www.home.saxo/en-mena/content/articles/macro/md-tue-18-may-2021-20052021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon: Reflections on Peloton [PTON] $92, -46% from its peak, +15% from recent lows<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon: Reflections on Peloton [PTON] $92, -46% from its peak, +15% from recent lows</h3> <p>(Note this piece should have been published on Tues, yet due to a technical glitch it was delayed. PTON closed on Wed @ $96.55)<br /> <br /> <strong ><span >Top of Mind&hellip;</span></strong></p> <ul > <li ><span >It goes without saying that when an equity analyst is talking about a stock (or valuations in general), one should raise one&rsquo;s filter &amp; bring a critical, yet open mind to the view as part of one&rsquo;s own due diligence &amp; research. </span></li> <li >Now when a Macro gal or guy starts talking about a stock, well one best +3x their filter &amp; critical framework. Also worth noting all formal Saxo House Views on equities &amp; single name stocks are at the discretion of our dedicated equity strategist Peter Garnry, as well as our CIO &amp; Chief Strategist Steen Jakobsen &ndash; who recent Macro Digest can be found below:</li> <li >&nbsp;<a href="https://www.home.saxo/content/articles/macro/macro-digest-we-need-to-talk-about-germany-and-spac--ipo-20042021">Macro Digest: Sell in May and go away. Also, German politics turning hard left!</a> Bottom line &ndash; official house view is taking risk lower by 50% exposure by the end of April (note was 20 Apr), given the epic run in 2020, as well as explosive start for a lot of assets in 2021. &nbsp;</li> <li >Also for those that cannot get enough about inflation, KVP recently watched the first part of this recent interview of Jakobsen that also extends into Macro, Geopolitics &amp; Cross-Assets.</li> <li ><a href="https://www.youtube.com/watch?v=wVa5YI81B1c">Commodities Boom Only In 'Early Innings', Much Higher To Go | Saxo Bank CIO</a> </li> <li >With all that said, we&rsquo;ve had a number of VIP clients here in the Asia Pacific &ndash; from Family Offices, to Hedge Funds, to UHNWs &ndash; asking about certain names, as well as having a default bias of being long equities over the long-term. The tactical decision making being around when to lighten up or get heavier over a few times a year. &nbsp;</li> <li >So we got a few names to touch on over the course of this &amp; the next few weeks, including Peloton, Coinbase, Beyond Meat, Compass Pathways, Square, AirBnB, to name a few. </li> <li >The one thing that these very different companies have in common, despite being very different businesses, is they have been getting smoked in the recent sell-off. &nbsp;&nbsp;</li> <li ><span >From a Macro lens, its never going to be predominantly valuation or solely driven by bottoms-up fundamentals, its whether there seems to be a high probability of multiple tailwinds (for longs) or headwinds (for shorts) coupled with a name being oversold (or over bought) giving one potential &lsquo;margin of safety&rsquo;. </span></li> <li ><span >If there are other names that are screaming convictions on your respective radars, or you just wanna talk up your own book &ndash; feel free to send through some bullets on the rationale of your short or long. <a href="https://www.cnbc.com/2021/05/17/michael-burry-of-the-big-short-reveals-a-530-million-bet-against-tesla.html">Speaking of shorts, look&rsquo;s like The Big Short&rsquo;s Michael Bury is building a mammoth short in Tesla with over half a billion dollars wagered in long puts (smart at least in that construction, as opposed to outright).</a> <br /> <br /> </span></li> </ul> <h4 class="heading--4"><strong><span >Peloton [PTON] $92.29 Price, $27.5bn Mkt Cap</span></strong></h4> <ul > <li >Likely a lot of you that don&rsquo;t know Peloton [PTON] that well, may still heard about the company during the remote-stocks mania of 2020. Others perhaps have even worked out on some of their equipment (which can be found in gyms) or joined one of their live instructor &amp; group classes, or even have a full blow-out Peloton bike or two at home.</li> <li ><span >Yet the price action stemming from both a broader market systematic (similar growth tech remote themed names getting killed) &nbsp;&amp; focused unsystematic event (recall of thousands of treadmills), to KVP at least, warrant a investigation into the name.</span></li> <li ><span >The product-service error in many different companies, across industries from the likes of recalls from Toyota, Tesla or e-coli issues with Chipotle years ago, etc. </span></li> <li ><span >From a systematic perspective, the growth &amp; tech space still seems to be on the back leg of the market &ndash; given a combination of stellar performance in 2020 &ndash; as evidence by the ARK Innovation etf [ARKK] which is down -17% YTD, after a +152% uplift last year. </span></li> <li ><span >PTON did +434% in 2020, topping ZM&rsquo;s (Zoom) c. +395%, yet falling well short of TSLA&rsquo;s +743% in 2020. &nbsp;</span></li> <li >After the death of a child &amp; over 70 incidents reported, Peloton voluntarily recalled its Tread+ Treadmills for a full refund. Here are the recall statements from Wed 5 May from <a href="https://www.onepeloton.com/press/articles/tread-and-tread-recall">Peloton</a> &amp; the <a href="https://cpsc.gov/Recalls/2021/peloton-recalls-tread-plus-treadmills-after-one-child-died-and-more-than-70-incidents">CPSC (Consumer Product Safety Commission)</a></li> <li ><span >Peloton is now down -46% from its peak of $171.090 (14 Jan 21) &amp; is up c. +15% from its recent $80.48 low of 6 May 21.</span></li> </ul> <strong></strong> <h4 class="heading--4">&nbsp;</h4> <h4 class="heading--4" ><span >The Bearish Case</span></h4> <p ><span >The bearish case for the name would focus on a number of things including:</span></p> <ul > <li ><span >The recall announcement was on May 5<sup>th</sup>, yet the stock was already heavily off the highs by -40%. This no doubt linked to the sensational &amp; exuberant performance of these &lsquo;remote stocks&rsquo; in 2020, where Peloton finished the year up +434%</span></li> <li ><span >All the &lsquo;remote stocks&rsquo; did was eat their future lunch &amp; earnings, so as the US (&amp; RoW) steadily goes back to re-opening, they are going to be repriced lower. PTON is still +224% since the start of 2020, the stock has plenty of downside.</span></li> <li ><span >Cockroach theory on the recall of its Tread+ Treadmill, what if there are more product &amp; equipment issues, leading to more recall. These are key risks of potentially more bad news to come that cannot be ruled out. </span></li> <li ><span >It will take time to regain consumer trust &amp; rebuild a damaged brand. &nbsp;</span></li> <li ><span >The name is in the growth bucket &amp; we are entering a regime where value is going to be outperforming growth, as also generally speaking value stocks are more geared towards a reopening &amp; more cyclical towards a world where inflation &amp; rates seem set to rise. </span></li> <li ><span >The short interest days to cover ratio is at 2.0x down from the 3.2x highs of mid Apr.&nbsp;&nbsp;</span></li> </ul> <ul > <li >Valuations are still stretched with Peloton trading at 152x fwd P/E ratio, with a price/cashflow ratio of +73x. Also being a growth stock there are no dividends that help to de-risk an investors capital overtime. &nbsp;</li> <li >From a weekly chart technicals perspective we&rsquo;ve broken a key Fibo retracement of 50% &amp; closed below the crucial 94.40, which likely opens us up for a test of the 76.30 &amp; perhaps even 53.90, fibo lvls of 61.8% &amp; 76.4%. The wkly MACD continues to trend down &amp; the daily looks set to roll back down. </li> <li >Things don&rsquo;t go down in a straight line, all we are doing is getting ready to make another big leg lower. A weekly close above 112/113 &ndash; both key 200DMA &amp; Fibo lvls &ndash; would likely refute the timing for a bearish move lower. </li> <li ><span >From the Dragon&rsquo;s perspective a NAV Allocation framework here could warrant 5-10%, whilst from a trading-stop perspective the risk would be 1-2% of one&rsquo;s capital. Tgts for the bears could be an initial move to $76 (-17%) to $60 (-35%) for the tactical leg of the position, with the 'core' being a long-term play for around $55 (-405). Would also potentially instill a trailing stop of $20 on the triggering of the first tgt. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br /> <br /> </span></li> </ul> <h4 class="heading--4"><strong><span >The Bullish Case</span></strong></h4> <p ><span >The bulls would naturally be inclined to say that if the lows are not already in, the worst has been priced in. &nbsp;</span></p> <ul > <li ><span >The technicals are actually bullish, as a 50% fibo retracement is quite &lsquo;healthy&rsquo; for the price action of a bullish security. Especially given the strong performance in 2021. Whilst the bears would argue to momentum is to the downside, the bulls will pull the contrarian card on Peloton. </span></li> <li ><span >Also two wks ago the name was down c. -15% on c. 210m shares, +4x the YTD wkly avg. of 53m, a sign of healthy capitulation. Last wk the stock was up c. +15% on 140m shares (2.6x YTD wkly avg), which potentially also indicates a strong follow through on the higher price &amp; the lows having been put in. </span></li> <li >Company proactively recalled the entire Tread+ line of treadmills, which were also not initially mass distributed but were on an invitation only basis. The takeout of this entire model, puts the safety concerns to rest. So worst news <span class="underline; ">should</span> be in. </li> <li >In a US population of +330m, Peloton has just under 2m subscribers (think cashflow model like a stream of bond coupon payments), that not even 1% of the population. The international markets have still not even seen the low hanging fruit being hit yet. </li> <li >The brand is a lifestyle association brand (think Apple, Tesla), that capitalizes on the wellness, health &amp; fitness structural trends that one tends to see in richer economies. As well as being part of the decentralization movement that brings less friction, more autonomy &amp; flexibility to the end user. There is a skew towards the younger generation that will bode well as millennials (biggest demographic group since the baby boomers) start to enter their peak earnings &amp; spending over the next 2-3 decades. Peloton equipment &amp; classes are also being used at gyms &amp; other training facilities. </li> <li >At a market cap of sub $30bn, its not a crazy expectation that the company could be worth $90-120bn (+3-4x) in 5-10yrs. I.e. The Amazons &amp; Apple&rsquo;s of the world at +$1-2 trn in mkt cap start to run into the law of large numbers, where the probability of them doing +3-4x over the next 5-10yr is quite low. Today Apple at $2trn is c. +2.4% of the $84 trn global economy, that&rsquo;s just mind boggling. Apple&rsquo;s value is almost 10% of US GDP. Peloton&rsquo;s is barely over 0.10%. &nbsp;</li> <li >And worth noting consensus estimates is still for Peloton to do +$5.3bn in rev for 2022, &nbsp;with top-line growth of +31% (post what is forecasted to be +120% for the full 2021, at +$4bn). Whilst PTON is still very much a growth stock, its worth noting its EBITDA is positive &ndash; this is not NKLA that at one point was at c. the same mkt cap with negligible revenue, let alone RV Trucks that worked (NKLA by the way is still a $5-6bn mkt cap). </li> <li >Also there is still a lack of appreciation on the subscription model for their classes &amp; training programs, that they continue to build besides selling fitness equipment. &nbsp;</li> <li ><span >With a close yest of $92.29, a technical break of the recent low of $80.48 (-13%), or even more importantly $76.30 (c. -17%) would constitute a review of the thesis and/or closing of the position. </span></li> <li ><span >From the Dragon&rsquo;s perspective a NAV Allocation framework here could warrant 5-10%, whilst from a trading-stop perspective the risk would be 1-2% of one&rsquo;s capital. Tgts for the bulls could be an initial move to $112 (+21%) to $134&nbsp;<span >(+45%)</span> for the tactical leg of the position, with the Core being a long-term play for above $150 to a retest of the c. $171 highs. Would potentially also be worth instilling a trailing stop of $20 on the triggering of the first tgt. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</span></li> </ul> <p ><span >-</span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p ><span >Namaste,<br /> <br /> -KVP</span></p> <p> <span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Thu, 20 May 2021 09:00:00 Z2024-01-27T00:09:45Z{87B63E66-D0AA-434B-A3B5-2AA3B081A879}https://www.home.saxo/en-mena/content/articles/macro/md-mon-17-may-2021-17052021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK #21: Inflation Divergence, Central Banks vs. Markets?<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #21:&nbsp;Inflation Divergence, Central Banks vs. Markets?</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul > <li ><span >TGIM &amp; welcome to WK #2</span>1<span >&hellip; </span></li> <li >&hellip;where in <a href="https://www.scmp.com/news/hong-kong/health-environment/article/3133655/coronavirus-hong-kong-does-not-have-sufficient">Singapore (similar to other places in Asia, Taiwan, Japan)</a> we have moved towards more restrictions, given <a href="https://www.channelnewsasia.com/news/singapore/covid-19-virus-variants-india-singapore-what-you-need-know-14746598">concerns on the latest Covid-19 mutation focus, with this strain being believed to have originated in India</a>. We&rsquo;ve had similar concerns around the UK &nbsp;Strain &amp; the South African Strain from.</li> <li >Naturally, better that all this is happening in a world where there is a vaccine, than say just 9months ago, when we had no vaccines. Its easier to manufacture a new vaccine for a new Covid strain, than if one had no vaccine. </li> <li >Yet once again, the opening &amp; closing, reopening dance shows that its not a linear path to the light at the end of the tunnel. With that said, KVP firmly believe it&rsquo;s a question of when, not If. And yes, further restrictions means more fiscal aid has to come through. </li> <li ><a href="https://www.gov.uk/government/news/further-easing-of-covid-restrictions-confirmed-for-17-may">Worth noting the UK will be &lsquo;opening&rsquo; up again today</a> &amp; hopefully that trend will continue, as also Greece &amp; New York get less restrictive. &nbsp;</li> <li >Last wk&rsquo;s market infatuation was on the big beat in US inflation at +4.2%a vs +3.6%e, +2.6%p</li> <li >Now know from base effect levels that a big number was possible, yet what likely threw the spanner in the works, was the abysmal -734K miss that we had in the US NFPs from two Fridays back. We also saw China with a strong PPI last wk +6.8%a 6.5%e 4.4%p.</li> <li >The divergence on the inflation narrative between most central banks &amp; the markets continues to play out &ndash; granted even within the Market camp, there are differing views. </li> <li >The official Saxo House view is inflation is here &amp; is not transitory, as we have been hearing from the Fed &amp; ECB. </li> <li >From KVP&rsquo;s side, would just love to see the world without the covid-induced logistics constraints on supply/demand &ndash; lot of noise out there. Yet with that said, there will always be pockets of inflation &amp; pockets of deflation, depending on what part of the ecosystem one is focusing on. &nbsp;&nbsp;</li> <li >Worth noting that UST 1.62% yields are still within the recent trading ranges &amp; gold $1,850 on the other hand continues to break out higher, whilst the crypto complex retraces with BTC $45,000 &amp; ETH $3,300. </li> <li >Lastly, we are still +11.1% YTD on the S&amp;P 500 at 4,173, with the Nasdaq +4.2% YTD at 13,429. Whilst the VIX jumped c. +13% last wk to close at 18.81, the big rally towards the end of the wk took us from the highs of 27.59 (US inflation print Weds).</li> </ul> <p ><strong><span>&nbsp;</span></strong></p> <p ><strong><span >2Q SaxoStrats Outlook</span></strong></p> <ul > <li ><span >Also check out our <a href="https://www.home.saxo/en-mena/insights/news-and-research/thought-leadership/quarterly-outlook">2Q Outlook that focuses on Scarcity</a> &amp; captures the latest analysis &amp; thoughts from the SaxoStrats team </span></li> <li ><span >KVP&rsquo;s very own cut is entitled: </span></li> </ul> <p ><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/in-a-globe-drowning-in-capital-speculation-is-eating-the-world-30032021">&ldquo;In a Globe Drowning in Capital, Speculation is Eating the World&rdquo;</a> </span></p> <p ><strong><span ><br /> Rest of the Week &amp; Other Reflections </span></strong></p> <ul > <li >Wk will be focused on Flash PMIs across the board, minutes out of the RBA &amp; FOMC, China monthly growth figures, as well as inflation &amp; retail sales out of the UK<span > </span></li> <li ><a href="https://www.reuters.com/article/us-israel-palestinians-idCAKCN2CX0M2">The situation in the middle east seems to be the biggest escalation in years between the triad of Israel, Palestine &amp; Hamas</a>. Very unsure about the potential spin-offs from this, or if the highs are already in from a volatility, conflict perspective&hellip;. Currently does not look like that is the case. &nbsp;</li> <li ><strong><span >CB</span></strong><strong>: </strong>South Africa 3.50%e/p</li> <li ><strong>FOMC</strong><span >:</span> Got quite a bit of both Clarida &amp; Bostic from the FOMC</li> <li >ECB&rsquo;s Lagarde will be speaking on Thu &amp; Fri </li> <li >SNB&rsquo;s Jordan speaking on Tue </li> <li ><strong><span >Hols</span></strong><span >: </span>Wed is a public holiday in HK<span >. &nbsp;&nbsp;</span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> </span></li> </ul> <p ><span >-</span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p> <span >Namaste,<br /> <br /> -KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 16 May 2021 23:00:00 Z2021-09-21T10:45:23Z{5954343E-558F-48A0-A899-AEA1CFFA614B}https://www.home.saxo/en-mena/content/articles/macro/md-mon-10-may-2021-10052021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK #20: NFP Iconic Miss (-734k btw actual & estimate) Takes Pressure off Fed for Jun 16th<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #20: NFP Iconic Miss (-734k btw actual &amp; estimate) Takes Pressure Off Jun 16th FOMC Meeting</h3> <h4 class="heading--4"></h4> <h4 class="heading--4"> <br /> Top of Mind&hellip;</h4> <ul> <li ><span >TGIM &amp; welcome to WK #20&hellip; where the start of the focus will be on last Friday&rsquo;s US monthly job numbers&hellip;</span></li> <li ><span >&nbsp;</span>Our FX Specialist John Hardy&rsquo;s initial take: <a href="https://www.home.saxo/content/articles/forex/fx-update-patience-required-after-an-nfp-miss-for-the-ages-07052021" >Patience required after an NFP miss for the ages.</a></li> <li ><a href="https://www.home.saxo/content/articles/forex/fx-update-patience-required-after-an-nfp-miss-for-the-ages-07052021" >&nbsp;</a>As per the Dragon&rsquo;s note to our VIPs on Fri (see mail below for those on the VIPs mailing list), going into the Friday NFP were expectations for 1m jobs, the risk was to the downside as there seemed to be a whisper number of an even bigger number, with estimates of 2m topping the high end of the range! So it felt that even 1m would have been &lsquo;priced in&rsquo;.</li> <li >So when we got that massive miss at 266k a vs. 1000k e (-734k shortfall to consensus), plus downward revisions to 770k (-146k) on the previous months print of 916k (where we had a +50% beat) &ndash; we got some big moves on a cross-asset perspective.</li> <li >With the USD massively on the back foot across currencies &amp; commodities, as well as the DOW + S&amp;P 500 breaking to ATHs. On equities, price action suggests that the rotation away from growth into value is continuing &ndash; at the very least a lot less demand for growth &amp; tech it seems.</li> </ul> <ul> <li ><span >Just for some context on some of the moves for last wk:</span></li> </ul> <ul > <li ><span >EM FX Complex: &nbsp;BRLUSD +3.89%, ZARUSD +3.20%, MXNUSD +1.88%</span></li> <li ><span >G10 FX Complex: SEKUSD +1.88%, AUDUSD +1.66%, NZDUSD +1.63%, EURUSD+1.20%, GBPUSD 1.17%</span></li> <li ><span >CMD Complex: Gold 1831 +3.51%, Silver 27.45 +5.91%, Copper 476.60 +6.41%, WTI 64.90 +2.08%, Brent 68.28 +1.53%</span></li> <li ><span >US Equity Complex: AirBnB 151.21 -12.45%, Palantir 19.75 -14.28%, Doordash 124.89 -12.45%, Amazon 3291 -5.07%, Tesla 672.37 -5.23%</span></li> </ul> <ul > </ul> <p ><span >Then on value front&hellip; </span></p> <p ><span >Exxon 62.43 +9.07% (breaking out higher), XLE 53.63 +8.58% (breaking out higher), Caterpillar 240.99 +5.65%, Deere &amp; Co 394.22 +6.30% </span></p> <p ><span >Worth noting Dow 34777 +2.67% &amp; S&amp;P 4332 +1.23% breaking out to new ATHs, while Nasdaq-100 13719 -1.02% is not. Its also worth noting that the latter&rsquo;s chart is not looking that bearish &amp; we could be retesting the 14,000ish resistance lvl soon.</span></p> <p ><span >Lastly VIX closed down -10.32% to sub 16.69. </span></p> <ul > <li ><span >Yet perhaps strangest of all was the knee-jerk reaction in US10yr yields, first spiking lower to new weekly lows of 1.4643%, before reversing &amp; closing higher on the yields of the day at c. 1.58% (still lower that previous wk&rsquo;s c. 1.63%</span></li> <li ><span >So folks will be looking to separate the signal from the noise on NFPs, especially as we only have one more before now &amp; the Jun 16 Fed meeting &ndash; which should be a forecast &amp; estimates meetings. There is no doubt a structural element to parts of the workforce in the US not being incentivized enough to get back into the labor force &ndash; i.e. for them the stimulus benefits outweigh the pros of getting a job. As well as perhaps the recovery continuing to be more fragmented than thought, i.e. that was a big revised number. At the same time the jobless claims was lowest since the pandemic kicked off. And we also know that from a structural perspective, that the benefits could run into Sep 6<sup>th</sup>. </span></li> <li ><span ><a href="https://www.cnet.com/personal-finance/states-canceling-unemployment-status-on-the-300-weekly-payments-refund-today/">Hard to see how some of this can be short circuited, but there are already some states - Montana &amp; South Carolina citing labor shortage - cancelling access to federal $300 weekly unemployment payments.</a> Those effects are likely to come through already in Jun &amp; if mirrored elsewhere in the US, could see some structural uplifts on the job markets in the May, Jun &amp; Jul NFPs. </span></li> <li ><span >Bottom line, from a high probability perspective &ndash; the Fed has gained wiggle room to delay any moves on signaling steps to taper, hike, get more hawkish, etc. KVP is currently just not sure how much of that may be delayed until Sep or 4Q, or if they may already start to signal quicker moves in Jun. The clearer picture would have been if we got +2m jobs last Friday. Yet it does seem to be less about direction (IF) &amp; more about timing (When) in regards to a more hawkish Fed, inflation coming through &amp; jobs flying back. </span></li> <li ><span >And of course, if one has the view that, that NFP was going to be the worst number &amp; they only get better (i.e. higher), then it feels like the most contrarian thing for one to do right now in this market is:</span></li> <ul > <li ><span >Go long the USD vs. other DM &amp; EM Currencies</span></li> <li ><span >Go short UST bond futures, as well as Gold </span></li> <li ><span >Go long growth stocks &amp; tech names, vs. show value-linked names </span></li> <li ><span >Play for a more pivotal &lsquo;hawkish pivot&rsquo; move from the Fed in Jun &nbsp;</span></li> <li ><span >Play for a deflationary skew, from the context that the inflation theme is a touch overstressed &amp; we could see a sharp near-term reversal in commodities which are either at ATHs or close to ATHs</span></li> </ul> </ul> <p ><strong><span>&nbsp;</span></strong>&nbsp;</p> <p ><strong ><span >2Q SaxoStrats Outlook</span></strong><strong ><span ></span></strong></p> <ul > <li ><span >Also check out our <a href="https://www.home.saxo/en-mena/insights/news-and-research/thought-leadership/quarterly-outlook">2Q Outlook that focuses on Scarcity</a> &amp; captures the latest analysis &amp; thoughts from the SaxoStrats team </span></li> <li ><span >KVP&rsquo;s very own cut is entitled:&nbsp;</span><a href="https://www.home.saxo/content/articles/quarterly-outlook/in-a-globe-drowning-in-capital-speculation-is-eating-the-world-30032021" >&ldquo;In a Globe Drowning in Capital, Speculation is Eating the World&rdquo;</a></li> </ul> <p ><span >&nbsp;</span></p> <p ><strong><span > Rest of the Week &amp; Other Reflections </span></strong></p> <ul > <li ><span >Outside of US jobs data digestion, folks will be focusing on the US Wed inflation reading where 3.6%e 2.6%p on headline &amp; 2.3%e 1.6%p on Core. There are also JOLTS job opening (which should continue to rise aggressively, if the labor shortage stories are true), retail sales &amp; industrial production also out of the US. There are also US bond auctions on both 10s &amp; 30s. </span></li> <li ><span >China will see inflation, PPI &amp; New Loan data. EZ will see regional CPI, EU Economic Forecasts &amp; German ZEW. Australia has their annual budget &amp; retail sales due. </span></li> <li ><strong><span >Earnings wise</span></strong><span > &ndash; we have done well over +400 of the companies in the S&amp;P 500. Yet this week could see a few interesting earnings due including: </span></li> <ul > <li ><span >Mon: Roblox [RBLX], BioNTech [BNTX], WEIBO [WO] </span></li> <li ><span >Tue: Palantir Technologies [PLTR]</span></li> <li ><span >Thu: Alibaba [BABA, 9988], Airbnb [ABNB], Disney [DIS], Coinbase [COIN], Doordash [DASH]</span></li> </ul> <li ><strong><span >Covid-19 &amp; Re-opening wise</span></strong><span > &ndash; we continue to see divergence with adjusted restrictions &amp;/or tick up in infections in places like Singapore, Australia, India&hellip; yet potentially we&rsquo;ll see a divergence in the likes of the UK which should announce an easing of restrictions for next wk. </span></li> <li ><strong><span >CBs</span></strong><span >: Rate decisions that are expected to remain unchanged out of&nbsp;</span><span >Philippines</span><span >&nbsp;2.00%e/p, Chile 0.50%e/p &amp; Mexico 4.00%e/p&nbsp;&nbsp;</span></li> <li ><strong><span >Fed</span></strong><span >: Evans later today on a digital conference, as well as host of other FOMC members later in the wk including Williams, Brainard, Daly &amp; Bostic. We also have Clarida due later this wk.</span></li> <li ><span >BoC&rsquo;s Macklem set to speak on Thu &ndash; interesting to see just how blazingly strong CAD has been vs. the USD. KVP is also hearing parts of Vancouver Housing market is seeing double digit gains in just the last few months. &nbsp;&nbsp;&nbsp;&nbsp;</span></li> <li ><strong><span >Hols</span></strong><span >: Some European countries out over Thu &amp; Fri this wk. &nbsp;&nbsp;</span></li> <li ><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> </span></li> </ul> <p ><span >-<br /> <br /> </span></p> <p ><span >Start&lt;&gt;End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <p><span >Namaste,<br /> <br /> KVP</span></p> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 09 May 2021 23:00:00 Z2021-09-21T11:06:47Z{73C83881-27FA-42BB-9254-3F89B90107D4}https://www.home.saxo/en-mena/content/articles/macro/md-mon-12-apr-2021-12042021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK 16: Calm & Dangerous... <div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK # 16: Calm &amp; Dangerous...</h3> <h4 class="heading--4"><strong ><br /> Top of Mind&hellip;</strong></h4> <ul > <li><span >TGIM &amp; welcome to WK #16&hellip;<br /> <br /> </span></li> <li><span ><a href="https://www.youtube.com/watch?v=ph7eUiFfWpw&amp;list=PLI1yx5Z0Lrv4iHmsL-VW35R7-yXgy_rOf&amp;index=6">So Powell over the WK on CBS&rsquo;s 60 mins,</a> pretty much saying expecting US economy to get hotter, yet they are going to be accommodative &ndash; as he see&rsquo;s a risk where a faster reopening also coincides with a resurgence in Covid infections<br /> <br /> </span></li> <li><span >From KVP&rsquo;s standpoint, we are likely not going to see Powell saying&hellip;<br /> <br /> </span></li> <li><span >&ldquo;Hey I think we were a touch conservative on moving in 2023/2024 back in the midst of the sell-off (as <span class="underline; ">should</span> always be the case)&hellip; &amp; we are likely going to adjust our targets at either the Jun 16 or Sep 22 quarterly forecast meetings&hellip;&rdquo;<br /> <br /> </span></li> <li><span >Yet that&rsquo;s what the Macro Dragon is picking up between the lines&hellip;<br /> <br /> </span></li> <li><span >For the rest cross-assets wise, nothing screaming out on the Macro Dragon &ndash; most things seems to be either in consolidation, or within recent trading ranges. With the one exception of US equities in the form of the S&amp;P 500 breaking higher, as it should in an asset inflationary world.<br /> <br /> </span></li> <li><span >From a Currency, Commodity &amp; Bonds perspective, waiting for trading range tops &amp; bottoms to be challenged &ndash; whilst trying to anticipate what could be the next trigger that moves us from the market feeling &ldquo;priced in&rdquo; to new signal for a &ldquo;repricing&rdquo; one way or another. Still EURUSD back over 1.1900 recently? "Hogg wash me thinks"&hellip;<br /> <br /> </span></li> <li><span >On single stock names, there are always opportunities &ndash; yet even there most things on our radar seem to be consolidating&hellip; everything else being equal, this tend to be bullish given the underlying convexity of the asset class.<br /> <br /> </span></li> <li><span >Whilst the Macro Dragon&rsquo;s creed is that there are <span class="underline; ">always</span> opportunities &ndash; there are also times to make money &amp; times to sit tight, Calm &amp; Dangerous, waiting for the right opportunities to present themselves.<br /> <br /> </span></li> <li><span >For now, KVP tactically remains in the latter camp. Strategically, KVP remains constructive on equities as a whole &ndash; yet will point out once again that the surface of the equity market, does not highlight the divergences within sectors (positive &amp; negative yield sensitive sectors, i.e. financials &amp; insurers vs. say utilities &amp; healthcare, value vs. growth, etc.).</span> <p><strong><span ></span></strong></p> </li> </ul> <h4 class="heading--4"><strong><span >2Q SaxoStrats Outlook</span></strong></h4> <ul> <li><span >Also check out our <a href="https://www.home.saxo/en-mena/insights/news-and-research/thought-leadership/quarterly-outlook">2Q Outlook that focuses on Scarcity</a> &amp; captures the latest analysis &amp; thoughts from the SaxoStrats team<br /> <br /> </span></li> <li><span >KVP&rsquo;s very own cut is entitled:<br /> <br /> </span> <p><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/in-a-globe-drowning-in-capital-speculation-is-eating-the-world-30032021">&ldquo;In a Globe Drowning in Capital, Speculation is Eating the World&rdquo;</a></span></p> </li> </ul> <br /> <h4 class="heading--4">Rest of the Week &amp; Other Reflections<strong ><span ></span></strong></h4> <ul> <li><span >From a central bank perspective globally, likely the biggest focus from a Macro perspective, will be the central bank rate decision out of Turkey this Thu &ndash; given Erdogan&rsquo;s sacking of the previous governor that had overseen over 850 bp in hikes.<br /> <br /> </span></li> <li><span >Economists are expecting the central bank to hold rates at 19.00% e/p, yet given the new governor seems to be an Erdogan pawn &ndash; one should not be surprised if we see a major reversal in tightening of policy, despite a &lsquo;business as usual&rsquo; set of rhetoric.<br /> <br /> </span></li> <li><span >Worth noting USDTRY has moved from 7.2185 (prior to the sacking of the previous governor, to the current 8.1780 lvls. That&rsquo;s a +13% move in just the spot price in c. 3wks. &nbsp;Its one of the few currencies that has broken out of recent trading ranges.<br /> <br /> </span></li> <li><span >Another focus will be earnings now that 1Q is under the belt, as is usually the case the financials will lead the pack. So watch out for some of the usual suspects including Goldman, JPMorgan, Wells Fargo, Citigroup, Bank of America, etc. Generally speaking KVP is bullish on higher yields, which means he&rsquo;s bullish on financials, yet feels insurers are in a sweater spot.<br /> <br /> </span></li> <li><span ><a href="https://www.forbes.com/advisor/investing/coinbase-ipo-direct-listing/">Coinbase (crypto exchange) is also set to list this wk</a>, which judging from its c. +$1bn in revenue a year is a legit business that once again underlines that crypto, blockchain &amp; digital assets are here to stay.<br /> <br /> </span></li> <li><strong><span >Econ wise</span></strong><span > US inflation (2.5%e 1.7%p, 1.5%e 1.3%p), retail sales, Beige Book, Housing Data &amp; Capacity Utilization will give us clues as to the health &amp; pace of the US economy, as well as vaccination drive. &nbsp;<br /> <br /> </span></li> <li><span >CH will have usual monthly growth numbers, as well as new loans &amp; money supply figures due, in addition to the big kahuna data point of 1Q GDP 18.5%e 6.5%p (yes, that is due to the low base effects of 1Q20).<br /> <br /> </span></li> <li><span >Europe data is light with regional + block CPI measures, IP for the block &amp; German ZEW + 30yr bond auction on the docket.<br /> <br /> </span></li> <li><span >Canada get the BoC Business Outlook Survey today. We have business confidence surveys due out of Australia &amp; New Zealand, in addition to Aussie jobs data on Thu.<br /> <br /> </span></li> <li><strong><span >CBs</span></strong><span >: New Zealand 0.25%e/p, Turkey 19.00%e/p &amp; South Korea 0.50%e/p.<br /> <br /> </span></li> <li><strong><span >Fed</span></strong><span >: Lots of Fed speak this wk, yet key focus will be Powell on Wed speaking at the Economic Club of Washington. Clarida is also set to speak twice this wk on Thu.<br /> <br /> </span></li> <li><span >Lagarde due to speak on Wed<strong>. &nbsp;<br /> <br /> </strong></span></li> <li><strong><span >Hols</span></strong><span >: No major mkt hols this wk. <br /> &nbsp;<br /> </span></li> <li><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> </span></li> </ul> <p><span >-</span></p> <p ><span >Start-End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <span >Namaste,<br /> <br /> KVP</span> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 11 Apr 2021 23:00:00 Z2021-09-21T10:48:33Z{11EFB079-9571-4BD4-89EF-8AE9B8A83C52}https://www.home.saxo/en-mena/content/articles/macro/md-mon-5-apr-2021---2q21-05042021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK 15: Saxo’s 2Q Outlook + US Dominance Theme with Yields Higher, Gold Much Lower, USD Higher, US EQ > RoW EQ<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon: Saxo&rsquo;s 2Q Outlook + US Dominance Theme with Yields Higher, Gold Much Lower, USD Higher, US EQ &gt; RoW EQ</h3> <h4 class="heading--4"><strong ><br /> Top of Mind&hellip;</strong></h4> <ul > <li><span >TGIM &amp; welcome to WK #15&hellip;<br /> <br /> </span></li> <li><span >For those back from the Easter WKD, hope you capitalized on some well needed R&amp;R, plsu reading + reflecting, some quality time with people that you love &amp; of course some selfless time by yourself.<br /> <br /> </span></li> <li><span >Most folks are still out until Tues, including most of Europe, Australia, New Zealand &amp; China &ndash; meaning its really gonna be the US setting the potential bell-curve on the start of the wk<br /> <br /> </span> <p><span ></span></p> </li> </ul> <h4 class="heading--4"><span >US Dominance Theme</span></h4> <ul> <li><span >Again re-iterating something that is not yet consensus in positioning from a cross-asset basis (yet) but will be by E-2021, the US Dominance theme &ndash; <a href="https://www.home.saxo/content/articles/macro/dragon-interview-with-ash-murthy-avm-28032021">for those of you who may have missed the re-published latest Dragon Interview, would encourage you to pay attention to AVM&rsquo;s Ashvin view on the US Dominance Theme&hellip;<br /> <br /> </a> </span></li> <li><span >From KVP&rsquo;s take some things to reflect on in regards to the theme:<br /> <br /> </span></li> <li><span >The DXY at these 93 lvls (two wkly closes above the 200DMA of 94.481) likely has an easy move to the 96lvls before we have even gotten to the critical Jun 16 Fed meeting.<br /> <br /> </span></li> <li><span >Gold $1730, is heading much lower&hellip; the $1676 lows last wk on the 30<sup>th</sup> of Mar is but a taste. The bulls will say the c. 1680 line has held well, the bears will be point out then why do we keep testing it &amp; why are we not breaking back above the key $1770 lvl? KVP reckons we are heading to the $1500-$1600 lvls at least on Gold over the next 1-2months (that&rsquo;s a -9% to 12% move) &ndash; with the lows likely being set around the time we get the first Fed hike, which could be upgraded to 2022. &nbsp;<br /> <br /> </span></li> <li><span >Yields with UST at 1.72 (1.7742 was set last wk, when gold was 1676), have a path of least resistance to the upside. We are seeing trillions being added to bills, before even one is out of the kitchen&hellip; $3trn in infra is now $4trn &amp; there is more on the table.<br /> <br /> </span></li> <li><span >The Macro Dragon is not surprised&hellip; this is why we went from being bullish risk from the US Nov elections, to being mega bullish post the Blue Ninja Sweep of the Senate in Jan. This administration is dead set on delivering on what they promised, plus making up for 4yrs of a presidential debacle in regards to execution on nearly everything.<br /> <br /> </span></li> <li><span >The Fiscal Dominance regime is here to stay, this is not a drill.<br /> <br /> </span></li> <li><span >The US bond market is the biggest in the world &amp; if yields are going up there, it will pull yields up globally. USTs are not gonna &lsquo;rest&rsquo; until c. 2.25% to 2.50% &amp; if then it will be a function of how much we are spending.<br /> <br /> </span></li> <li><span >Bottom line, the world largest economy at +$22trn (c. +25% of global GDP), with the <a href="https://siblisresearch.com/data/us-stock-market-value/">deepest equity (+$50 trn)</a> &amp; government bond markets (c. $20 trn), plus also having +60% of the global reserve currency &amp; the biggest spending on the fiscal front&hellip; is going to likely be growing at +6% to +8% in the 2H of the year. That will be the equivalent of +$1.3trn to +$1.8trn in growth, or the equivalent of larger than Turkey, Mexico or Australia on the low end to bigger than a Russia, South Korea or Canada on the high end.&nbsp;<br /> <br /> </span></li> <li><span >Why would one look to EM or the RoW to compete with that level of both percentage &amp; nominal growth? i.e. the risk-premium in other countries just does not justify that. &nbsp;<br /> <br /> </span></li> <li><span >This is the point that folks operating in Investing, Macro &amp; especially life forget &ndash; it&rsquo;s a relative world &amp; it&rsquo;s by no means a maximalist world. You can moan about the debt lvls going up in the US economy, yet where else will you find that level of transparency, rule of law, talent, resources, ecosystem, size, yield, etc.<br /> </span><br /> <p><span ></span></p> </li> </ul> <h4 class="heading--4"><span >2Q SaxoStrats Outlook</span></h4> <ul> <li><span >Also check out our <a href="https://www.home.saxo/en-mena/insights/news-and-research/thought-leadership/quarterly-outlook">2Q Outlook that focuses on Scarcity</a> &amp; captures the latest analysis &amp; thoughts from the SaxoStrats team<br /> <br /> </span></li> <li><span >KVP&rsquo;s very own cut is entitled:<br /> <br /> </span> <p><span ><a href="https://www.home.saxo/content/articles/quarterly-outlook/in-a-globe-drowning-in-capital-speculation-is-eating-the-world-30032021">&ldquo;In a Globe Drowning in Capital, Speculation is Eating the World&rdquo;<br /> <br /> </a></span></p> </li> </ul> <h4 class="heading--4"><span >Rest of the Week &amp; Other Reflections</span><strong ><span ></span></strong></h4> <ul> <li><span >Easy to read too much or too little into last wk&rsquo;s price action, given both month finish/start, as well as more importantly the 1Q to 2Q transition. I.e. there can be a lot more noise than signal on those calendar transitions due to rebalancing &amp; other structural needs.<br /> <br /> </span></li> <li><span >You know what is a lot of signal &amp; very little noise? That&rsquo;s right&hellip; US jobs numbers&hellip; another blowout session on the NFPs&hellip; including upgrades on previous numbers. This economy is going from Moto, to Moto Moto (hot hot)&hellip;<br /> <br /> </span></li> <li><span >Mar NFP came in at 916k vs. 660k that was expected. Plus Feb figures got upgraded by almost 100k from 379k to 468k.<br /> <br /> </span></li> <li><span >The unemployment rate is at 6% at expected from a previous 6.25%. It worth noting that a year ago, in Apr 2019 the U/R got to 14.8% from a previous Mar figure of 4.4%. The handle pre-Covid was 3.5%.<br /> <br /> </span></li> <li><span >Don&rsquo;t forget that the one sector that has not fully re-opened up yet is the F&amp;B space, which pre-Covid was responsible for c. 10m workers. Its likely not going to be a linear move lower, especially at the amazing progress that the vaccines have been making in the US.<br /> <br /> </span></li> <li><strong><span >Econ wise</span></strong><span > this wk, final service PMIs due this will + &nbsp;US ISM Services 58.3e 55.3p.<br /> <br /> </span></li> <li><strong><span >CBs</span></strong><span >: Rate decision out of Australia&rsquo;s RBA on Tues<br /> <br /> </span></li> <li><strong><span >Hols</span></strong><span >: Most major markets (outside of the US &amp; CA) are not back in until Tues<br /> <br /> </span></li> <li><strong><span >Other</span></strong><span >: We got daylights saving time shift over the wkd for AU &amp; NZ.<br /> <br /> </span></li> <li><span ></span><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos" >Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a></li> </ul> <p ><span >-</span></p> <p ><span >Start-End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <span >Namaste,<br /> <br /> KVP</span> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 04 Apr 2021 23:00:00 Z2021-09-21T11:01:27Z{4839632C-B2A9-4745-934B-5F4675C5CDC0}https://www.home.saxo/en-mena/content/articles/quarterly-outlook/in-a-globe-drowning-in-capital-speculation-is-eating-the-world-30032021Kay Van-PetersenPrimary-Quarterly OutlookPrimary-Quarterly OutlookIn a globe drowning in capital, speculation is eating the world<div class="article-excerpt">Is it time to apply a 'scarcity framework' to your wealth allocation strategy?</div><div class="article-rte"><div class="rte--output"><p>As we continue to slowly but surely emerge into a post-Covid world, one of the few things that is beyond doubt is the level of money that has been pumped into the global economy. By some measures, just from a fiscal perspective we&rsquo;ve seen over $20tn in government support globally, which is over 20% of the 2019 pre-Covid world GDP of $88tn.&nbsp;</p> <p>The fact that more than 80% of this has likely been from &lsquo;developed markets&rsquo; also skews the distribution of that stimulus. And if you start to calculate the effects from just the Fed/Treasury and ECB alone from a monetary policy perspective, you easily get above another $10tn. So altogether we likely saw well over 30% of global GDP in both fiscal and monetary support in 2020.</p> <h4 class="heading--4">Speculation is eating the world&hellip; surplus money is a commodity that is firing up asset class inflation&nbsp;</h4> <p class="text--body">The bottom line, regardless of whether or not this is your first rodeo, is that we are in a meta-regime like never before&mdash;make no mistake about that. Both fiscal and monetary taps have been unleashed at the same time, in magnitudes that border science fiction compared to just one or two years ago.&nbsp;</p> <p class="text--body">We are seeing a shift in policy regimes, from one that has been a multi-decade monetary dominance regime, to one that is going to be a potentially a multi-year fiscal dominance regime. The latter cannot function without aid from the former, which likely means any last semblance of central bank independence is long out the door. What we have learned from the financial crisis of 2008 is that the &ldquo;temporary&rdquo; measures that the Fed and other central bankers put into place during the sub-prime crisis have been anything but temporary.&nbsp;</p> <p class="text--body">Everyone talks about software eating up the world, but the real global &lsquo;cookie monster&rsquo; is speculation. <strong>Speculation is eating up the world, through monetary and fiscal measures that circumvent, to delay, the need for structural change for an equitable society that is sustainable and addresses the climate crisis.&nbsp;</strong></p> <p class="text--body">Speculation is rampant across the ecosystem of capitalism. It does not stop with the hedge funds and proprietary traders, but also includes politicians, policymakers, taxpayers, non-taxpayers, corporations, CEOs, unions, lobbyists, political parties and other vested interests. Everyone is complicit, be they cognisant or ignorant of the fact.&nbsp;</p> <h4 class="heading--4">Deflationary assets such as the Amazon forest and Bitcoin are finite in their supply&hellip;</h4> <p class="text--body">So the social zeitgeist exploding in the west is one of MMT: a nanny state (after all, Wall Street has been bailed out literally for over 100 years&mdash;doesn&rsquo;t main street deserve to be looked after?), colossal levels of debt in the system and financial repression, all which will continue to drive up asset class inflation. Money is a commodity that is losing value with every new accommodative measure from governments and central banks.&nbsp;</p> <p class="text--body">The allocation of that capital to talent and compelling investment opportunities is the true value creation. Even more so in an inflationary world,<strong> where we have seen multi-year spikes in commodities such as base metals (copper) or in the agriculture space (corn). It looks like the price of negative oil in the Mar/Apr liquidation event of 2020 marked the low of the commodity cycle in prices and demand</strong>.&nbsp;</p> <p class="text--body">Oil has been on fire, up well over 30% YTD, as has the combination of having structural supply shortfalls that work in favour of the producers, as well as a levered play on the reopening of the world, both in terms of global activity picking up, and tourism and travel returning. The latter is likely to explode in the next 6 to 18 months, as we have been flagging on the Macro Dragon, as well as our Misery Index theme from our equity strategist Peter Garnry. It&rsquo;s worth noting the energy etf XLE, names like Exxon [XOM], BP [BP/] and Woodside Petroleum [WPL] all fall in the &lsquo;value&rsquo; camp and are still relatively cheap compared to their &lsquo;growth&rsquo; basket peers in the tech space, even after the massive rallies YTD.&nbsp;&nbsp;</p> <h4 class="heading--4">Paradoxically, it seems like the world is running out of commodities&hellip;</h4> <p class="text--body"><strong>The paradox is that it seems like the world is running out of commodities</strong> which, by definition, should not be rare. This is also happening before we have even fully opened up, let alone considered the potential trillions in infrastructure spend that are no doubt on the Biden/Harris agenda post the vaccination campaign, as well as to lesser extent in the eurozone. If this spending has to be financed through an increase in corporate taxes and/or financial transaction taxes, so be it.&nbsp;</p> <p class="text--body"><strong>The asset classes that I am fascinated about are those that are deflationary, whether by construction in something like Bitcoin</strong> (there&rsquo;s a maximum total supply of 21 million keys but in practice, given that around 4 million are lost, it&rsquo;s more like 17m), or by mismanagement such as the Amazon forest (nature), <strong>or by thematically being a new investment thesis such as in the alternative protein or the psychedelic medicinal and therapeutic sectors</strong>.&nbsp;</p> <p class="text--body">In one of our recent Macro interviews, we sat down with Geo Chen, a talented Macro Trader and passionate nature conservationist. Towards the end of the interview, he pointed out the enigma that nature globally is on an accelerated decline caused by lack of accountability, sustainability, incentives and actions by humans. According to the World Wildlife Fund (WWF), over the last 50 years our planet Earth has seen a decline of around 70% in the population sizes of mammals, birds, fish, reptiles and amphibians.&nbsp;</p> <p class="text--body"><strong>So nature&mdash;which is part of the biosphere tapestry that keeps us alive, breathing air and having access to water&mdash;should be appreciating in value every second</strong>. And what&rsquo;s the value of the biosphere, given that human beings cannot sustainably survive without it? Is it in the trillions? In the tens to hundreds of trillions?&nbsp;</p> <p class="text--body">Those that find a way to tap into nature in a symbiotic and sustainable manner, as well as reverse-to-mitigate the current pace of the climate crisis, are going to make hundreds of billions of dollars. It is likely to spur the world&rsquo;s first US dollar trillionaire and is likely part of the hype around Elon Musk who saw his wealth exponentially explode by over $100bn in 2020 alone.&nbsp;</p> <p class="text--body">Deflationary assets&mdash;be they traditional financial securities, crypto, physical, land, nature or some hybrid combination&mdash;have scarcity working in their favour. By having a finite supply (for example, 5-star hotels close to the Kaaba in the Islamic holy city of Mecca, or around the corner from the Vatican, the home of the Roman Catholic Church) and inflationary demand, their price has a structurally positive convexity.&nbsp;</p> <h4 class="heading--4">One cannot &lsquo;print&rsquo; more Vaticans, or Bitcoins, or Amazon rainforests&hellip;</h4> <p class="text--body">One cannot &lsquo;print&rsquo; more Vaticans, or Bitcoins, or Amazon rainforests, or any other &lsquo;one-of-a-kind&rsquo; type of assets or investment theme. These range from patents, to toll roads on a key transport hub, to Singapore as a beacon city from global financial repression (where taxes are going up globally), to pioneering new frontiers such as psychedelics for medicinal and therapeutic uses (etf PSYK, Compass Pathways [CMPS], MindMed [MMED]), to exceptionally talented people and entities (think how little competence and leadership we have seen in response to the Covid pandemic), to non-fungible tokens (NFTs that will run on something like the Flow token), or even cashflows being seen as a form of scarcity over businesses that are valued solely on future hype.&nbsp; &nbsp;</p> <p class="text--body">The fund managers, long-term investors and family offices that <strong>bring a &lsquo;scarcity framework&rsquo; to assets and business models on their wealth allocation process and overall strategy will be the ones most likely to be outperforming in the future of this regime</strong>.&nbsp;</p> <p class="text--body"><strong>In a world that is being eaten up by speculation, deflationary assets are the celestial anti-fragile pieces.&nbsp; &nbsp;</strong></p></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=67879023"></iframe></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/thought-leadership/quarterly-outlook">Quarterly Outlook</a> <a href="https://www.home.saxo/en-mena/insights/news-and-research/thought-leadership/quarterly-outlook">Quarterly Outlook</a></div>Tue, 30 Mar 2021 03:50:00 Z2021-03-30T08:49:12Z{93CE5A99-50B6-4545-A926-77C84733E9B9}https://www.home.saxo/en-mena/content/articles/macro/md-mon-29-mar-2021---1q21-29032021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK 14: +$3 trn Infra, US NFP, Block Trades & Chinese ADRs, Archegos Capital, Quarter End + Easter WKD<div class="article-excerpt">Macro Dragon = Cross-Asset Quasi-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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon: +$3 trn Infra, US NFP, Block Trades &amp; Chinese ADRs, Archegos Capital, Quarter End + Easter WKD</h3> <h3 class="heading--3">&nbsp;</h3> <h4 class="heading--4" ><span><strong>Top of Mind&hellip;</strong></span></h4> <ul > <li><span >TGIM &amp; welcome to WK #1</span><span >4</span><span >&hellip;<br /> <br /> </span></li> <li><span >Lots of moving parts folks, which we will get into soon enough &ndash; <a href="https://www.home.saxo/content/articles/macro/dragon-interview-with-ash-murthy-avm-28032021">for those of you who may have missed the re-published latest Dragon Interview, would encourage you to pay attention to AVM&rsquo;s Ashvin view on the US Dominance Theme&hellip;<br /> <br /> </a> </span></li> <li><span >&hellip;.which KVP feels is still very much mispriced [particularly in the USD (should be much higher, with DXY 92.754 likely easily heading to the 94-96 range post last wk&rsquo;s close above the key 200DMA lvl) &amp; gold (should be much lower that current $1730 &amp; is likely heading to the $1500-1600 range over next 1-2months )]<br /> <br /> </span></li> <li><span ><a href="https://www.forbes.com/sites/jonathanponciano/2021/03/28/biden-new-3-trillion-stimulus-plan-infrastructure/?sh=134434a91232">+$3 trn seems to be the next bill on the Biden|Harris agenda, yet this one fully devoted to Infrastructure &ndash; how much of that finally get through, how &amp; when are likely factors that are hard to gauge now</a>.<br /> <br /> </span></li> <li><span >You know what is not hard to gauge, probability wise?<br /> <br /> </span></li> <li><span >USTs at 1.66% being way too low for the hotness of the US economy &amp; as a function of more fiscal on the way, not to mention a Fed that is transition to hawkishness&hellip; we should be well above +2.00% &amp; likely at 2.50% before we even get our first hike</span><span >.<br /> </span><span ><br /> </span></li> <li><span >In regards to delta on the Fed&rsquo;s decision making, keep the Apr 29<sup>th</sup> &amp; more importantly Jun 16<sup>th</sup> dates on your calendars. Granted every US economic data point, is likely going to be acting as an anthem exercise for the US dominance theme. &nbsp;&nbsp;<br /> <br /> </span></li> <li><span >On that note &ndash; should be no surprise that on a wk where we see one month &amp; quarter end, with another beginning there is a lot on. On top of which, it&rsquo;s a shortened wk for most of the world given good Friday. So watch out for final PMIs across the board, including ISMs &amp; NFPs out of the US.<br /> <br /> </span></li> <li><span >Given the upcoming long wkd for many major markets, we may already see liquidity starting to dissipate from Wed &amp; Thu.<br /> <br /> </span></li> <li><span >Big focus out this Asia morning &amp; from the wkd seems to be on two fronts, that may be related or just coincidental &ndash; <a href="https://www.bloomberg.com/news/articles/2021-03-26/china-adrs-rebound-after-bellwethers-said-to-be-in-block-trades?sref=WtZ2aql3">one is the big block trades on Friday focused around some Chinese ADRs on Friday</a>. Reads of capitulation on expecting US/CH relations to improve &ndash; which likely means at some point the local legs of those names could be interesting.<br /> </span></li> </ul> <ul> <li><span >The other is a headline from one of <a href="https://www.nomuraholdings.com/news/nr/holdings/20210329/20210329.pdf">Japan&rsquo;s biggest banks Nomura announcing a potential $2bn loss linked to a client</a> (could be less or more) &ndash; which has sent the name down c. -16%, which is +4x standard deviations on 30d vol of 3.6%, likely biggest drop in 10yrs.<br /> <br /> </span></li> <li><span >With the stock at c. 611 yen, that leaves the bank with a mkt cap of 1.9 trn yen or c. USD 19 bn &amp; as per their statement a Tier 1 capital that is well above the required lvl. Macro wise KVP likes financials (&amp; insurers even more), as US dominance means global yields will continue to move up.<br /> </span></li> </ul> <ul> <li><span >How much of this is cockroach theory &ndash; ripple effect to be seen on a few other banks, i.e. if you see one, there is more&hellip; yes KVP is Event-Driven/Special-Sits bred &ndash; vs. isolated incident &amp; apparently bonus season, remains to be seen.<br /> <br /> </span></li> <li><span >KVP is still looking into full details around the loss, <a href="https://www.zerohedge.com/markets/archegos-fallout-nomura-crashes-after-reporting-record-2bn-loss-transactions-us-client">yet there is a thesis that this is linked to Archegos Capital (part of the Tiger Cubs &amp; run by Bill Hwang), which seems to have gotten margin calls</a>. So whether this is Archegos Capital =&gt; Prime Brokers =&gt; Banks like Nomura? Again remains to be seen&hellip; given Fiscal Year-End in Japan plus end of 1<sup>st</sup> Quarter, Senior Management at Nomura may have thought it prudent to be proactive on this &amp; open up the new fiscal year on a clean slate &ndash; smart! &nbsp;&nbsp;<br /> <br /> </span></li> <li><span >Its the Hedge Fund hotels that KVP would be worried about, i.e. there is a lot of concentrated position among the big multi-billion hedge funds, despite their respective spiels of being different&hellip; <a href="https://www.wsj.com/articles/ex-tiger-asia-founder-triggers-30-billion-in-large-stocks-sales-11616973350">&amp; when there is blood in the water&hellip; there is a &ldquo;there is blood in the water&hellip; lets go kill someone&rdquo; mentality<br /> <br /> </a> </span></li> <li><span >Some equity names that seem to be in the confluence of this storm include Tencent, Alibaba, Baidu, Farfetch, Discovery, GSX Techedu, ViacomCBS (someone tried to do a massive block over the wkd) &amp; IQiyi. &nbsp;</span> <p><strong><span ><br /> </span></strong><strong><span ></span></strong></p> </li> </ul> <h4 class="heading--4"><strong><span >Rest of the Week &amp; Other Reflections</span></strong></h4> <ul> <li><span >Again probability generally higher of noise &gt; signal into quarter end &amp; quarter start &ndash; on top of which we have for most of the trading world a four day wk, with Friday being a public holiday. With that said, KVP feel's strongly that US Dominance theme is underpriced from a cross-asset perspective... particularly in regards to further USD strength &amp; a lot more weakness in gold.&nbsp;<br /> <br /> </span></li> <li><span >Econ wise </span><span >final Mfg. PMIs across the board, whilst in the US ISM mfg. 61.4e 60.8p, ADPs, NFP 643k e 379k p, AHE 4.5%e 5.3%p &amp; unemployment rate are due 6.0%e 6.2%p.<br /> <br /> </span></li> <li><strong><span >CBs</span></strong><span >: Outside of Chile 0.50% e/p, no major Central Banks scheduled&nbsp;<br /> <br /> </span></li> <li><span ><strong>Fed Speak</strong>: We got Waller, Quarles, Williams, Harker &amp; Bostic on the docket&nbsp;<br /> <br /> </span></li> <li><strong><span >Hols</span></strong><span >: </span><span >Most markets are out on Fri, worth noting the Danes are out from Thu &amp; back in on Tue 6 Apr. Most of Europe will be out both Fri &amp; Mon. AU, NZ &amp; CH will also be out on Mon.<br /> <br /> </span></li> <li><strong><span >Other</span></strong><span >: We got daylights saving time shift over the wkd in Europe. This coming wkd of Apr will see daylights saving time shift in AU &amp; NZ.<br /> <br /> </span></li> <li><span ></span><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a><span ></span></li> </ul> <p ><span >-</span></p> <p ><span >Start-End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <span >Namaste,<br /> <br /> KVP</span> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 28 Mar 2021 23:00:00 Z2021-09-21T10:58:15Z{8B23526D-89BA-4E1E-83F3-C050A1295BC2}https://www.home.saxo/en-mena/content/articles/macro/dragon-interview-with-ash-murthy-avm-28032021Kay Van-Petersenproduct-macroInflationInflationSGFocus Inflationproduct-equitiesEducationproduct-forexproduct-forexproduct-commoditiessector-Commodityproduct-bondsproduct-bondsAVM's Global Macro CIO Ashvin Murthy on reflation, positive real rates, US dominance, Fed & no YCC<div class="article-excerpt">Our fourth Dragon Interview takes us back to checking in with AVM's Global Macro CIO Ashvin Murthy - Ash walks us through his latest top of mind thoughts, including positioning in the shifting market regime, inflation, real yields, no YCC, the Fed & the potential US dominance theme - which judging by where the DXY & gold closed on Fri Mar 26, at 92.766 & 1732.52, is still largely mispriced by the market. <br><br>A US dominance theme should see much strong US Dollar (DXY easily back above 94 to 96 lvls), gold getting hosed potentially back to $1580/$1530 lvls -9% to -12%, as well as US equities outperforming Emerging Markets & Euro-Zone equities, plus higher US bond yields & overall higher real rates. In addition to US economic data, the Fed meetings of Apr 28 & especially Jun 16 are going to be pivotal. </div><div class="article-rte"><div class="rte--output"><h3 class="heading--3">Republished for the Weekend-Warriors - we check in with AVM's Global Macro CIO, Ashvin Murthy from our Dragon Interviews series</h3> <p><a rel="noopener noreferrer" rel="noopener noreferrer" href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA" target="_blank">Join the Dragon Interviews series</a>, as Global Macro Consigliere KVP, interviews some of the best of breed players in the craft of steadily compounding wealth - be that across liquid or illiquid assets, global macro investing, venture capital, crypto, equities, commodities, currencies, bonds, private equity, property, etc. </p> <p>Its all about the craft &amp; the exceptional talented individuals behind their craft.<br /> <br /> We originally published this interview on Wed 17 Mar 21, before the Fed meeting that later saw them upgrade their US GDP expectations to +6% - a figure that Ashvin feels could be passed.&nbsp;<br /> <br /> <a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA">Those looking for faster playability options &amp; one landing page for all the interviews can check-out our Dragon Interviews Channel here</a>.&nbsp;<br /> <br /> We will have a crypto focused interview that should be published in early Apr.&nbsp;<br /> <br /> -</p> <p>Post our foundation piece with Global Macro Hedge Fund AVM's Ashvin Murthy in Oct of 2020, we catch up with <a rel="noopener noreferrer" rel="noopener noreferrer" href="https://www.youtube.com/watch?v=KUMMeQWwMpg" target="_blank">Ash to get his latest thoughts as we head into a likely series of very key Fed meetings</a> in regards to them being neutral, vs potentially hiking, vs the YCC route. </p> <p>We touch on a number of things, including: </p> <ul> <li>Bond yields &amp; real interest rate levels - including context from previous ranges<br /> <br /> </li> <li>Inflation &amp; deflationary forces<br /> <br /> </li> <li>Powell doing a great job at the Fed, letting the market doing the heavy lifting<br /> <br /> </li> <li>Biden administration &amp; the corp. taxes on the way, as a function of funding infra.<br /> <br /> </li> <li>Red hot US economy, all pre the full opening of the country &amp; still with a cold 1Q21 winter, plus with latest +$1.9 trn bill<br /> <br /> </li> <li>Yield curve control (YCC) likely in the pit-stop for a while<br /> <br /> </li> <li>US exceptionalism &amp; the risks to emerging markets, especially the fragile five&nbsp;<br /> <br /> </li> <li>The broader global macro regime that we find ourselves in </li> </ul> <p>Links: AVM Global Opportunity Fund &mdash; <a rel="noopener noreferrer" rel="noopener noreferrer" href="https://www.youtube.com/redirect?event=video_description&amp;redir_token=QUFFLUhqblUwR0sweW9pMFRuSHFuTld5YkJqTndrd2R5UXxBQ3Jtc0tsVWlvZ3czS0R4czdxVFhQb2NBWjRkRktHYlVTZk5lNkpQZ2oxQmE2U2ZIMFdkT1VPS3MwUDdJZmdaSkVpbXA0MWJhY0FHYUJvaU9aZnZySnBINzFyRkIxMFlwR181Sm1Kbkd5blVCWFVqdEpTbTRIYw&amp;q=https%3A%2F%2Favmglobal.fund%2F" target="_blank">https://avmglobal.fund/</a> </p> <p>Watch our debut Dragon Interviews piece here &mdash; <a rel="noopener noreferrer" rel="noopener noreferrer" href="https://www.youtube.com/redirect?event=video_description&amp;redir_token=QUFFLUhqay1LREJXZ1dBeFdpcUdvSlpzUHRqb3JoNEMyUXxBQ3Jtc0tuVW9mZnc5aUM1enIyRjZWS2M0enh2b2lFang0R3U5OGx0LVFuWFVreHlTZ0ViSWo3OUstSjk2Vkc5Vmc2NktXZks0RU1RVm5LbHhhdTVlYjI5RVRLODZCMDhCc3IwVGtlUUVma3V1ZU1WbFRua2x6RQ&amp;q=http%3A%2F%2Fbit.ly%2Fditvashvin" target="_blank">http://bit.ly/ditvashvin</a></p> <p>As always we hope you enjoy the interview as much as we did putting it together, please feel free to share. </p> <p>Namaste,</p> <p>-KVP</p></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=67778748"></iframe></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>Inflation</span> <span>InflationSG</span> <span>Focus Inflation</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>Education</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a> <span>Forex</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/commodities">Commodities</a> <span>Commodity</span> <span>Bonds</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a></div>Sat, 27 Mar 2021 23:00:00 Z2021-03-28T08:27:01Z{00CFF2F4-B662-4915-9676-E9AE5B62F6D4}https://www.home.saxo/en-mena/content/articles/macro/dragon-interview-with-ash-murthy-avm-17032021Kay Van-Petersenproduct-macroInflationInflationSGFocus Inflationproduct-equitiesEducationproduct-forexproduct-forexproduct-commoditiessector-Commodityproduct-bondsproduct-bondsAVM's Global Macro CIO Ashvin Murthy on reflation, positive real rates, US dominance, Fed & no YCC<div class="article-excerpt">Our fourth Dragon Interview takes us back to checking in with AVM's Global Macro CIO Ashvin Murthy - Ash walks us through his latest top of mind thoughts, including positioning in the shifting regime, inflation, real yields, no YCC, the Fed & the potential US dominance theme. </div><div class="article-rte"><div class="rte--output"><h3 class="heading--3">Latest Dragon Interviews series, we check in with a very special guest, AVM's Global Macro CIO, Ashvin Murthy</h3> <p><a rel="noopener noreferrer" href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA" target="_blank">Join the Dragon Interviews series</a>, as Global Macro Consigliere KVP, interviews some of the best of breed players in the craft of steadily compounding wealth - be that across liquid or illiquid assets, global macro investing, venture capital, crypto, equities, commodities, currencies, bonds, private equity, property, etc. </p> <p>Its all about the craft &amp; the exceptional talented individuals behind their craft. </p> <p>Post our foundation piece with Global Macro Hedge Fund AVM's Ashvin Murthy in Oct of 2020, we catch up with <a rel="noopener noreferrer" href="https://www.youtube.com/watch?v=KUMMeQWwMpg" target="_blank">Ash to get his latest thoughts as we head into a likely series of very key Fed meetings</a> in regards to them being neutral, vs potentially hiking, vs the YCC route. </p> <p>We touch on a number of things, including: </p> <ul> <li>Bond yields &amp; real interest rate levels - including context from previous ranges<br /> <br /> </li> <li>Inflation &amp; deflationary forces<br /> <br /> </li> <li>Powell doing a great job at the Fed, letting the market doing the heavy lifting<br /> <br /> </li> <li>Biden administration &amp; the corp. taxes on the way, as a function of funding infra.<br /> <br /> </li> <li>Red hot US economy, all pre the full opening of the country &amp; still with a cold 1Q21 winter, plus with latest +$1.9 trn bill<br /> <br /> </li> <li>Yield curve control (YCC) likely in the pit-stop for a while<br /> <br /> </li> <li>US exceptionalism &amp; the risks to emerging markets, especially the fragile five&nbsp;<br /> <br /> </li> <li>The broader global macro regime that we find ourselves in </li> </ul> <p>Links: AVM Global Opportunity Fund &mdash; <a rel="noopener noreferrer" href="https://www.youtube.com/redirect?event=video_description&amp;redir_token=QUFFLUhqblUwR0sweW9pMFRuSHFuTld5YkJqTndrd2R5UXxBQ3Jtc0tsVWlvZ3czS0R4czdxVFhQb2NBWjRkRktHYlVTZk5lNkpQZ2oxQmE2U2ZIMFdkT1VPS3MwUDdJZmdaSkVpbXA0MWJhY0FHYUJvaU9aZnZySnBINzFyRkIxMFlwR181Sm1Kbkd5blVCWFVqdEpTbTRIYw&amp;q=https%3A%2F%2Favmglobal.fund%2F" target="_blank">https://avmglobal.fund/</a> </p> <p>Watch our debut Dragon Interviews piece here &mdash; <a rel="noopener noreferrer" href="https://www.youtube.com/redirect?event=video_description&amp;redir_token=QUFFLUhqay1LREJXZ1dBeFdpcUdvSlpzUHRqb3JoNEMyUXxBQ3Jtc0tuVW9mZnc5aUM1enIyRjZWS2M0enh2b2lFang0R3U5OGx0LVFuWFVreHlTZ0ViSWo3OUstSjk2Vkc5Vmc2NktXZks0RU1RVm5LbHhhdTVlYjI5RVRLODZCMDhCc3IwVGtlUUVma3V1ZU1WbFRua2x6RQ&amp;q=http%3A%2F%2Fbit.ly%2Fditvashvin" target="_blank">http://bit.ly/ditvashvin</a></p> <p>As always we hope you enjoy the interview as much as we did putting it together, please feel free to share. </p> <p>Namaste,</p> <p>-KVP</p></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=67778748"></iframe></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>Inflation</span> <span>InflationSG</span> <span>Focus Inflation</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>Education</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a> <span>Forex</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/commodities">Commodities</a> <span>Commodity</span> <span>Bonds</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a></div>Wed, 17 Mar 2021 09:30:00 Z2024-03-16T00:09:23Z{16634BF6-1422-439F-9EA7-5ABD00A92105}https://www.home.saxo/en-mena/content/articles/macro/md-mon-8-mar-2021---new-month-08032021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK 11: Oil on Fire, $1.9trn bill passes senate & what if YCC is dead?<div class="article-excerpt">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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon: Oil on Fire, +$1.9 trn Fiscal Bill passes Senate &amp; what if YCC is dead?</h3> <h3 class="heading--3">&nbsp;</h3> <h4 class="heading--4" ><span><strong>Top of Mind&hellip;</strong></span></h4> <ul > <li><span >TGIM &amp; welcome to WK #</span><span >11</span><span >&hellip;<br /> <br /> </span></li> <li><span ><a href="https://www.msn.com/en-us/news/politics/senate-passes-bidens-2419-trillion-covid-relief-bill/ar-BB1ehnI9">Equity futures mixed Asia morning despite the $1.9 trn coronavirus relief package bill passing the senate over the wkd.</a> The fact that it was a 50-49 all democrats for &amp; all republicans against, suggest that congress still does not deserve to get paid a dime. They continue to consistently tow party lines, practicing tribalism &amp; could not give two vaccines about the average American.<br /> <br /> </span></li> <li><span >Technically speaking, the bill (which had to be amended for the Dems to clear it without Rep support) goes back to the House on Tue, before POTUS can sign off on it.<br /> <br /> </span></li> <li><span >Its been a while since we have done some inversion on what seem to be currently consensus views &amp; also as we all know in the case of YCC &ndash; a key component to the Dragon Leviathan Liquidity Regime Thesis!<br /> <br /> </span></li> <li><span >Lets just get right into it&hellip; </span> <p><span ></span></p> </li> </ul> <h4 class="heading--4"><span >What if YCC control is dead?</span></h4> <ul> <li><span >Pretty much since last summer, on the Dragon we&rsquo;ve postulating that Abenomics/BoJ from Sep 2012, is pretty much where we are now in Bidenomics/Fed&hellip; &amp; part of that pathway (given blackhole of debt, synthetic parameters &amp; leverage in the system) includes other monetary measures such as YCC, buying debt &amp; general financial repression<br /> <br /> </span></li> <li><span >There are at least two key risks to KVP&rsquo;s thesis:<br /> <br /> </span></li> <li><span >One &ndash; just being flat out wrong &amp; we are going back into a world of hawkish central bank policies &amp; much higher rates to come, even with 10s at 1.585 (new highs on Fri to 1.6238%) &amp; 30s at 2.30% (Fri highs of 2.3477%). That would also likely mean than fiscal policies are done, i.e. given the already large level of debt in the system (record deficit in the US coming).<br /> <br /> </span></li> <li><span >Two &ndash; too early&hellip; a multi-year global macro thesis, has a lot of moving parts &amp; sequential events to the overall tide. So its not uncommon to run into counter pockets of smaller regimes, that seem to suggest that we&rsquo;ve broken the broader meta regime of structurally lower yields &amp; real rates being negative.<br /> <br /> </span></li> <li><span >Yet lets take a look at some of the arguments for why YCC will not happen:<br /> <br /> </span></li> <li><span >1. Fed does not need to do it&hellip;</span> <p><span >=&gt;They are only concerned with short-term rates &amp; in fact don&rsquo;t mind the back end of the curve rising </span></p> <p><span >=&gt;US is printing +4% GDP &amp; that's before we fully reopen, I.e. things are running hot </span></p> <p><span >=&gt;Signs of inflation abound in asset prices &amp; last ISM paid prices being stratospherically high, 89</span></p> <p><span >=&gt;Fed &amp; CBs, also tend to be reactive<br /> <br /> </span></p> </li> <li><span >2. YCC would Cement MMT &amp; loosen the Kraken in the form of politicians who will spend, spend, spend with no accountability, transparency &amp; optimization<br /> <br /> </span></li> <li><span >3. YCC would decimate the USD, accelerating the structural decline of its world reserve status </span> <p><span >=&gt;Less influence the USD has globally, less influence US policy will have globally, plus less &lsquo;pricing&rsquo;/negotiating power<br /> <br /> </span></p> </li> <li><span >4. They&rsquo;ll save all the bullets they can for the next big recession... as they have tapped a lot of the tool kit<br /> <br /> </span></li> <li><span >5. With an economy that is running so hot, credit &amp; HY can fail... I.e. very diff to underwrite the bond mkt in a liquidity event, than in an economy booming event </span> <p><span >=&gt;in fact this is a key structural tail risk that no one talks about, I.e. Powell &amp; Yellen announcing in 2H21/2022 that they are not gonna be there to underwrite debt<br /> <br /> </span></p> </li> <li><span >6. Real rates are still negative, so why should they do YCC? &ldquo;Chill bro &amp; pass me another beer...&rdquo;<br /> <br /> </span></li> <li><span >7. Austerity is coming politically, we could only pass the latest $1.9trn fiscal stimulus through the senate with all the Dems on board &ndash; potentially puts further big fiscal infra spending plans on hold or at the very least, greatly diluted.<br /> <br /> </span></li> <li><span >8. If they did YCC they are also in essence losing their independence as a CB, synthetically pricing their debt in the market really as a reaction function to fiscal policies<br /> <br /> </span></li> <li><span >9. &lsquo;You can never have negative rates in the US&rsquo;, would be a disaster... that&rsquo;s why they would not go down the YCC pathway...<br /> <br /> </span></li> <li><span >10. UST 10s are going to break 1.65%, above which there is massive convexity due to mortgage re-hedging needs... I.e. if we break 1.65% it&rsquo;s quick rerate to 2.00%...<br /> <br /> </span></li> <li><span >11. YCC doesn&rsquo;t really solve anything, all it does is exacerbate the structural holes, slippage, lack of accountability, lack of reform &amp; modernization that is needed in the system </span> <p><span >=&gt;It delays the needed hard decisions by &ldquo;our&rdquo; policy makers &amp; &ldquo;leaders&rdquo;<br /> </span></p> </li> </ul> <h4 class="heading--4"><span >Rest of the Week &amp; Other Reflections</span></h4> <ul> <li><span >Oil is on fire, both literally &amp; price wise as we are c. +2% on Brent &amp; WTI this morning in Asia given the strikes at Saudi oil facilities &ndash; something that we have been through before. This brings YTD performance to a range of +36% to 39%.<br /> <br /> </span></li> <li><span >For even energy bulls like the Dragon, we continues to love the direction strategically (especially on equity &amp; credit names &ndash; usual blue chip suspects we&rsquo;ve been talking about since E-Sep 2020: XLE etf, XOM, WPL, BP/, etc), yet tactically remain wary of the one-sided velocity so far. At some point we are going to have a few strings of -5% to -10% corrections, before stabilizing &ndash; not sure what the trigger there will be, with the stimulus bill through the senate! &nbsp;<br /> <br /> </span></li> <li><span >Econ wise we got inflation out of the US, crude oil inv on Weds that more key given lvl of oil, Jols on Thu &amp; PPI on Fri. China also has inflation, PPI, new loans &amp; money supply. EZ will be revised GDP readings, jobs data, IP &amp; regional CPI.<br /> <br /> </span></li> <li><strong><span >CBs</span></strong><span >: </span><span >rate decision out of Canada, Euro-Zone<br /> <br /> </span></li> <li><span >Bailey speaking on Mon 8 Mar, Lowe on Wed 10 Mar<br /> <br /> </span></li> <li><strong><span >Hols</span></strong><span >: </span><span >No major markets out.<br /> <br /> </span></li> <li><span ><a href="https://www.youtube.com/channel/UCO60yf1iMNqq-PGRRhs-KeA/videos">Dragon Interviews U-Tube Channel for easier play-ability&hellip;</a> plus we got more on the way over the next two wks, as did new video shoots over the wkd.</span></li> </ul> <p><strong >-<br /> <br /> New Dragon Interview&ndash; Global Macro &amp; Nature Conservationist Geo Chen</strong></p> <p> <a href="https://www.home.saxo/content/articles/macro/dragon-interview-with-geoffrey-chen-20022021">Our third Dragon Interview takes us to an outlier&rsquo;s outlier, with a world class trader &amp; investor Geo Chen.</a> </p> <p>We had the pleasure of sitting down &amp; speaking with Geo who is:</p> <p><a href="https://www.rainforesttrust.org/">Board Member @ The Rain Forest Trust</a><br /> <br /> <a href="https://huangchenfoundation.org/">Co-Founder of the Huang Chen Foundation </a>&nbsp;[Nature Conservation Focus]</p> <p><a href="https://twitter.com/geochen">@geochen</a>&nbsp;twitter channel&nbsp;</p> <p> Whilst the interview was filmed at the tail-end of Nov 2020, there is something here for everyone to take something away, including bigger picture thoughts on 2021, broader implications of the macro regime that we are in, as well as overall framework, allocation &amp; investment process<span >.</span><br /> <br /> Geo has been running his own capital across both liquid &amp; illiquid strategies since 2017, chalking up world class returns in the process, which more importantly fuel<span >s</span> Geo &amp; his family&rsquo;s passion &amp; calling, for Nature Conservation. <br /> <br /> What is impressive outside of the large returns over the period, is that Geo somehow does it all &ndash; from trading to investing, to internal capital allocations as well as external allocations across the entire asset class &amp; strategies spectrum. I.e. its tough enough to consistently do well in one area, lets alone across the board. <br /> <br /> We cover his come up story, his framework + process &amp; approach, his passion &amp; the importance of the Nature Conservation. Lastly we close with Top of Mind Thoughts &amp; views for 2021 &amp; the general global macro regime that we are in.<br /> <br /> We hope you enjoy the interview, as much as we did putting it together. And if there is something that you take away from this, be it inspiration, enhanced framework, investment thesis that resonates, left you thinking, etc&hellip; &nbsp;<br /> <br /> <a href="https://www.rainforesttrust.org/?form=donation">Do consider making a donation to the Rain Forest Trust</a> &ndash; which buys up rainforest land around the world &amp; maintains them within an ecosystem of local residents. <br /> <br /> From a markets perspective these are some of the areas we touched on:</p> <ul> <li>How Geo fared in 2020, given the massive bullishness in Jan, crazy sell-off in Feb &amp; Mar, then once again bullish recovery in Apr &amp; May<br /> <br /> </li> <li>Inflationary regime &amp; the huge fiscal forces that we are seeing<br /> <br /> </li> <li>Precious Metals &amp; US duration<br /> <br /> </li> <li>Bitcoin &amp; Crypto<br /> <br /> </li> <li>Energy<br /> <p>&nbsp;</p> </li> </ul> <p>&nbsp;</p> <p><a href="https://www.home.saxo/content/articles/macro/dragon-interview-with-geoffrey-chen-20022021" >We hope you enjoyed this Dragon Interview, as much as we enjoyed putting it together</a></p> <h4 class="heading--4"><span>Previous Dragon Interviews</span>&nbsp;</h4> <ul> <li><span >Ever wondered what it would be like to be a Proprietary Trader of Global Currencies over multiple market regimes across the world?<br /> <br /> </span></li> <li><span ><a href="https://www.home.saxo/content/articles/macro/kvp-interview-with-keith-dack-22012021">In the our second Dragon Interview series, we sit down &amp; jam with the talented, as well as always witty Keith Dack &ndash; known as Dacky in the markets.<br /> </a></span> <p><span >-<br /> <br /> </span></p> </li> <li><span >Ever wondered how a Macro CIO would approach the top-down process?<br /> <br /> </span></li> <li><span >Discussing Global Macro &amp; the Building Out of a Hedge Fund the AVM Way, with the Class-of-One Ashvin Murthy<br /> <br /> </span></li> <li><span ><a href="https://www.home.saxo/content/articles/macro/ashvins-avm-global-sat-24-oct-2020-24102020">Going into year 5 in one of the toughest &amp; dynamic changing Global Macro Regimes, AVM has returned +42.7% since its Nov 2016 inception, with an astounding Sharpe of +1.7x. Catch the great interview with Ashvin here</a>. &nbsp;</span></li> </ul> <p ><span >-</span></p> <p ><span >Start-End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p ><span >This is The Way </span></p> <span >Namaste,<br /> <br /> KVP</span> <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 07 Mar 2021 23:00:00 Z2024-02-03T06:12:28Z{446D7A9E-0243-4346-90A0-D6E46D0DE7C7}https://www.home.saxo/en-mena/content/articles/macro/md-mon-1-mar-2021---new-month-01032021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK 10: New Month + New Horizons = Pure Bliss <div class="article-excerpt">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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon: New Month + New Horizons = Pure Bliss&nbsp;</h3> <h3 class="heading--3">&nbsp;</h3> <h4 class="heading--4" ><span><strong>Top of Mind&hellip;</strong></span></h4> <ul > <li><span >TGIM &amp; welcome to WK #</span><span >10</span><span >&hellip;<br /> <br /> </span></li> <li><span >Amazing discovery over the wkd in the Dragon household, would encourage everyone to go through the following exercise.<br /> <br /> </span></li> <li><span >Step 1. Sit somewhere comfy &amp; where you will not be disturbed, be it with a nice cup of early grey tea or hot cocoa, or maybe even a chilled rozeeeeee or clean whisky<br /> <br /> </span></li> <li><span >Step 2. Slip on some noise cancelling headphones, <a href="https://www.youtube.com/watch?v=lp3d3bpFsSg">get the track ready</a> &amp; close your eyes.<br /> <br /> </span></li> <li><span >Step 3. <a href="https://www.youtube.com/watch?v=lp3d3bpFsSg">Press play &amp; just let go&hellip;.<br /> <br /> </a> </span></li> <li><span >Your welcome :)&hellip;<br /> <br /> </span></li> <li><span >This. This. Is. Global Macro Investing. This. Is. Life&hellip; with valleys, peaks, wins, losses, victories, defeats, joy, sadness, playfulness, despair&hellip; &amp; the same constants&hellip; process, the love for one&rsquo;s craft &amp; the continued work in progress that we all are.<br /> <br /> </span></li> <li><span >Here is to a beautiful &amp; limitless upside Mar, lets have an epic close for 1Q21<br /> <br /> </span></li> <li><span >Market focus this wk in addition to the classic new month staples - of final PMIs, US NFP / ISMS, month start flows - , <a href="https://edition.cnn.com/2021/02/26/politics/stimulus-package-covid-relief-house-vote/index.html">will be on the latest US $1.9 trn Fiscal Package (c. +9% of US pre-covid GDP) finally being passed in the House.</a> It is now about the Senate (which has always been the case) &amp; whilst the Dems control the senate with Kamala Harris as a potential tie breaker, its worth noting two democrats in the House opposed the bill (Golden from Maine, Schrader from Oregon) &amp; there were exactly zero republicans that voted for it.<br /> <br /> </span></li> <li><span >Worth noting part of the package (Which has to clear the Senate, then potentially go back to the House &ndash; as to clear the Senate with a simple majority, looks like there need to be a tweak in the bill) is the +$1,400 stimulus direct checks to Americans. Will be interesting to see how much of that ends up in the WSB/Robihood crowd.<br /> <br /> </span></li> <li><span >From the Dragon&rsquo;s standpoint the key thing to watch is the inception of the move towards YCC. Remain highly convicted of the view it&rsquo;s a question of WHEN not IF&hellip; &amp; bear in mind the convexity of bond prices changes as yields go higher, its not like equities &ndash; momentum as a strategy is not symmetrical across life, nor is it symmetrical across assets.<br /> <br /> </span></li> <li><span >So watch for a coordinated narrative from the likes of Clarida &amp; Powell when they are getting ready to do implement YCC. As <a href="https://www.piznaircapital.com/">Piznair Capital</a>&rsquo;s CIO Gez said, &ldquo;its not going to be digital, they will flag it first&rdquo;.<br /> <br /> </span></li> <li><span >So question is that US 10s at 2.0% from these 1.41% or 30s at 2.50%/2.75% from these 2.18%? Actually the accelerated move up is the best scenario from get a quicker &amp; clearer response from the Fed. A more gradual grind up, would introduce a lot more noise over signals.<br /> <br /> </span></li> <li><span >Lastly, regular readers of the Dragon will know of our ultra-high conviction on energy both for oil &amp; equity since one wk before the US elections in 2020. And damn, have we been phenomenally on point there, with some grateful luck on the thesis, given the freeze across the US.<br /> <br /> </span></li> <li><span >There is the direction of an investment thesis playing out &amp; there is the magnitude of that move &ndash; still remain a high conviction bull on energy, as that a lot of these energy names will still likely pop +50% to +100% over next 12-18m (XLE $48.15, XOM $54.37, BP 291.75, WPS A$24.77) &amp; are well below their Jan 2020 pre-covid lvl. Remember some of these names closed last year down -40% &amp; they are in one of the sectors were valuation are cheap, plus they are also very much in the value bucket &amp; a leverage play on the world re-opening out, vaccines being rolled out, etc.<br /> <br /> </span></li> <li><span >Yet tactically worth noting how quickly we have moved in a very short amount of time. We are kicking off this Asia morning with WTI firmly above $60 at $62.65 +1.8% &amp; Brent $65.60 +1.8% &amp; when Texas eventually defrosts, winter in the Northern Hemisphere disperses, we are likely going to see a pretty brutal reversal on oil.</span></li> </ul> <p><span >Rest of the Week &amp; Other Reflections</span></p> <ul> <li><span >Yes China PMIs came in worse than expected this morning, all noise as 1Q data always has the Lunar New year effects&hellip; generally an acceleration of activity into it &amp; as a consequence of that, a deceleration post that.<br /> <br /> </span></li> <li><span >Powell set to speak again this wk &ndash; did an interesting job of playing relaxed on the need to move rates up last wk&hellip; good Jay, good Jay &ndash; on Thu, so again&hellip; hints of YCC? Likely will depend where 10s &amp; 30s are&hellip; if we are at 2.0% &amp; 2.75%... he will talk YCC.<br /> <br /> </span></li> <li><span >Australia GDP on Wed could be a big mover for currency traders on Aussie crosses.<br /> <br /> </span></li> <li><span >UK should set its budget release this Wed.<br /> <br /> </span></li> <li><strong><span >CBs</span></strong><span >: </span><span >Australia</span><span > 0.</span><span >10</span><span >% e/p</span><span > (remember RBA recently bought an unscheduled few yards of points to keep their YCC in place) </span><span >&amp; </span><span >Malaysia </span><span >1.</span><span >75</span><span >% e/p.<br /> <br /> </span></li> <li><span >ECB&rdquo;s Lagarde set to speak on Tue, with RBNZ&rsquo;s Orr on Thu<br /> <br /> </span></li> <li><strong><span >Hols</span></strong><span >: JP out on Tues. &nbsp;</span></li> </ul> <p><span ><br /> New Dragon Interview&ndash; Global Macro &amp; Nature Conservationist Geo Chen</span></p> <p><a href="https://www.home.saxo/content/articles/macro/dragon-interview-with-geoffrey-chen-20022021">Our third Dragon Interview takes us to an outlier&rsquo;s outlier, with Global Macro Trader &amp; Nature Conservationist Geo Chen.</a> </p> <p>We had the pleasure of sitting down &amp; speaking with Geo who is:</p> <p ><a href="https://www.rainforesttrust.org/">Board Member @ The Rain Forest Trust</a><br /> <br /> <a href="https://huangchenfoundation.org/">Co-Founder of the Huang Chen Foundation </a>&nbsp;[Nature Conservation Focus]</p> <p ><a href="https://twitter.com/geochen">@geochen</a></p> <p>Whilst the interview was filmed at the tail-end of Nov 2020, there is something here for everyone to take something away, including bigger picture thoughts on 2021, broader implications of the macro regime that we are in, as well as overall framework, allocation &amp; investment process<span >.</span><br /> <br /> Geo has been running his own capital across both liquid &amp; illiquid strategies since 2017, chalking up world class returns in the process, which more importantly fuel<span >s</span> Geo &amp; his family&rsquo;s passion &amp; calling, for Nature Conservation. <br /> <br /> What is impressive outside of the large returns over the period, is that Geo somehow does it all &ndash; from trading to investing, to internal capital allocations as well as external allocations across the entire asset class &amp; strategies spectrum. I.e. its tough enough to consistently do well in one area, lets alone across the board. <br /> <br /> We cover his come up story, his framework + process &amp; approach, his passion &amp; the importance of the Nature Conservation. Lastly we close with Top of Mind Thoughts &amp; views for 2021 &amp; the general global macro regime that we are in.<br /> <br /> We hope you enjoy the interview, as much as we did putting it together. And if there is something that you take away from this, be it inspiration, enhanced framework, investment thesis that resonates, left you thinking, etc&hellip; &nbsp;<br /> <br /> <a href="https://www.rainforesttrust.org/?form=donation">Do consider making a donation to the Rain Forest Trust</a> &ndash; which buys up rainforest land around the world &amp; maintains them within an ecosystem of local residents. <br /> <br /> From a markets perspective these are some of the areas we touched on:</p> <ul> <li>How Geo fared in 2020, given the massive bullishness in Jan, crazy sell-off in Feb &amp; Mar, then once again bullish recovery in Apr &amp; May<br /> <br /> </li> <li>Inflationary regime &amp; the huge fiscal forces that we are seeing<br /> <br /> </li> <li>Precious Metals &amp; US duration<br /> <br /> </li> <li>Bitcoin &amp; Crypto<br /> <br /> </li> <li>Energy</li> </ul> <p><a href="https://www.home.saxo/content/articles/macro/dragon-interview-with-geoffrey-chen-20022021" >We hope you enjoyed this Dragon Interview, as much as we enjoyed putting it together</a></p> <p><span >Previous Dragon Interviews</span></p> <ul> <li><span >Ever wondered what it would be like to be a Proprietary Trader of Global Currencies over multiple market regimes across the world?<br /> <br /> </span></li> <li><span ><a href="https://www.home.saxo/content/articles/macro/kvp-interview-with-keith-dack-22012021">In the our second Dragon Interview series, we sit down &amp; jam with the talented, as well as always witty Keith Dack &ndash; known as Dacky in the markets.</a></span> <p><span ><br /> -<br /> <br /> </span></p> </li> <li><span >Ever wondered how a Macro CIO would approach the top-down process?<br /> <br /> </span></li> <li><span >Discussing Global Macro &amp; the Building Out of a Hedge Fund the AVM Way, with the Class-of-One Ashvin Murthy<br /> <br /> </span></li> <li><span ><a href="https://www.home.saxo/content/articles/macro/ashvins-avm-global-sat-24-oct-2020-24102020">Going into year 5 in one of the toughest &amp; dynamic changing Global Macro Regimes, AVM has returned +42.7% since its Nov 2016 inception, with an astounding Sharpe of +1.7x. Catch the great interview with Ashvin here</a>. &nbsp;</span></li> </ul> <p><span >-</span></p> <p ><span >Start-to-End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p class="text--body"><span><strong> <span ></span></strong><span >This is the way&nbsp;</span></span></p> <p class="text--body"> </p> KVP <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 28 Feb 2021 23:00:00 Z2021-09-21T11:18:46Z{72AEDF8C-A520-416E-B8B0-E40EBA6878E3}https://www.home.saxo/en-mena/content/articles/macro/md-mon-22-feb-2021---wk-9-22022021Kay Van-Petersenproduct-macrocurrency-audcurrency-jpycurrency-chfcurrency-eurcurrency-gbpcurrency-nzdproduct-bondscommodity-goldforex-usdtryforex-usdnokforex-eurnokforex-usdmxnFX TechnicalUK-elections-Brexitforex-usdrubMacro Dragon WK #9: Powell Testimony, RBNZ, BoK, E-Feb, KVP's Tues Asymmetrical Trades Webinar<div class="article-excerpt">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. <br></div><div class="article-rte"><div class="rte--output"><span >(These are solely the views &amp; opinions of KVP, &amp; do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)</span> <p ><span ></span></p> <p ><span ></span></p> <h3 class="heading--3">Macro Dragon WK #9:&nbsp; Powell Testimony, RBNZ, BoK, E-Feb, KVP's Tues Asymmetrical Trades Webinar</h3> <h3 class="heading--3">&nbsp;</h3> <h4 class="heading--4" ><span><strong>Top of Mind&hellip;</strong></span></h4> <ul > <li><span >TGIM &amp; welcome to WK #9&hellip;<br /> <br /> </span></li> <li><span >Hope everyone has an excellent wkd, with concentrated bets across some R&amp;R, great company, loved ones, some meditation, some form of movement &amp; some reading<br /> <br /> </span></li> <li><span >We are going into the last wk of Feb which leaves us with c. 15% of the year already under the belt. That. Was. Quick.<br /> <br /> </span></li> <li><span >KVP has pretty esoteric webinar tmr @ 1700 SGT | 1000 CET that is titled:<br /> <br /> </span> <p><span ><a href="https://www.home.saxo/insights/events-and-webinars">Asymmetrical trades and high conviction investment themes: <br /> <br /> SPACs, Psychedelics for Medicine &amp; Treatment, Alternative Protein and Crypto<br /> <br /> </a></span></p> </li> <li><span >Feel free to sign-up &amp; join the webinar if you have not already, will aim to share the recording when its available later in the wk. As usual when KVP is on deck, we&rsquo;ll touch on cross-assets, tactical &amp; strategic horizons &amp; a closing AMA session.<br /> <br /> </span></li> <li><span >The Wkd chart works just continues to underline the break-out higher in yields, which basically shows a few things looking ready to either continue their pop upwards or pop upwards big time including:<br /> <br /> </span></li> <li><span >Financial both in the US [IYF] &amp; Europe [Euro Stoxx Banks] are breaking out higher.<br /> <br /> </span></li> <li><span >Airplane etf JETS, taking off. At $24.82, the JETS etf still has a +305 move to get back to its Jan 22020 lvvls of $32.34.<br /> <br /> </span></li> <li><span >The Aerospace &amp; Defense etf ITA $99.01 is looking very bullish on weekly confirmation &amp; bullish MACD. We are still south of the ATH of c. $119 from Feb 2020, i.e. a +25 move<br /> <br /> </span></li> <li><span >And the space that we have been blowing the trumpets on, since the wk prior to the US elections, so late Sep 2020, the energy sector.<br /> <br /> </span></li> <li><span >Energy etf XLE weekly is looking very bullish, big candle closing up over key WMA of $42.72, with last wk&rsquo;s $46.18. More importantly from a technical perspective, we are above the c. $45 high in Jun last year that saw the fake bounce in energy &amp; value in general. Where were we in Dec 2019? C. $68! This implies that there is still a c. +48% move to get back to Pre-Covid lvls, yet the Dragon would argue that the structural demand/supply dynamics for Oil have actually only gotten better for the oil majors in the space.<br /> <br /> </span></li> <li><span >And it worth noting that unlike IYF the financials ETF, ITA, XLE &amp; JETS are still well below their pre-covid lvls &ndash; not many stocks &amp; sectors that can make that claim.<br /> <br /> </span></li> <li><span >And yes with US10s at 1.385 &amp; gunning for 1.50% and US30s at 2.17% &amp; gunning for 2.50%... gold at these $1784 lvls (despite the awesome tactical short call from $1830 by our CIO Steen Jakobsen) is likely going to breakdown through the $1750/1780 support lvl&hellip; in fact.. more than likely in the Dragon&rsquo;s books. Unless of course Powell drops three letters during his testimony, Y-C-C! Meanwhile Bitcoin at +$55,000 continues to make ATHs wk in wk out.<br /> <br /> </span></li> <li><span >S</span><span >peaking of the webinar tmr &amp; Psychedelics for Medicine &amp; Treatment, <a href="https://compasspathways.com/our-research/psilocybin-therapy/about-psilocybin-therapy/">Compass Pathways</a> (CMPS) had a decent c. +11% lift on Friday to $53.12. This is after a wk that saw +617K of volume, prior to the previous two wks of +660K &amp; +311K &amp; respectively +9%, +8% +3% rtns. Someone should dig around, yet smells like it could be accumulation to KVP.<br /> <br /> </span></li> <li><span ><a href="https://www.home.saxo/en-sg/content/articles/macro/md-tue-22-sep-2020-22092020">Recall last KVP check (a while back, so a bit stale when we flagged it at $29 post its IPO +71% pop),</a> there were at least three broad events to watch on CMPS:<br /> <br /> </span> <ul > <li><span >17 Mar lock-up expiry &ndash; which could naturally see some insiders &amp; backers of the company diversify to exiting their concentration.<br /> <br /> </span></li> <li><span >1 Mar scheduled earnings release (these earnings dates can move around)<br /> <br /> </span></li> <li><span >2H21 &ndash; Most importantly the big update on their trials.<br /> <br /> </span></li> </ul> </li> <li><span >Back-end of the wk, KVP will get back on a deeper dive into the space &ndash; as there are quite a few names that he has not touched on (We&rsquo;ll touch on some of this on tmr&rsquo;s webinar) &amp; of course SPACs.&nbsp; &nbsp; &nbsp;&nbsp;</span></li> </ul> <h4 class="heading--4"><strong><span >Rest of the Week &amp; Other Reflections</span></strong></h4> <ul> <li><span >G20 towards the back of the wk should be the most civil one in what? 5yrs, given the new POTUS in the US&hellip; would expect a coordinated blanket statement around vaccine for everyone, governments need to do more &amp; perhaps more actionably, firm return of the US to the climate crisis agenda (see latest Dragon Interview below).<br /> <br /> </span></li> <li><span >US/mkts still really focused on continued break-out higher in yields (watch questioning of Powell around that this wk), the freeze across the Midwest &amp; in Texas specifically, the fiscal stimulus package (believe should be going to the house this wk) &amp; testimonies around the whole GME / Robinhood / WSB / Melvin Capital / Point72 / Citadel drama.<br /> <br /> </span></li> <li><span >Despite last wk of the month, we will not be getting the super Friday NFPs out of the US, that will be for Fri 5 Mar. We do have secondary readings on the US 4Q GDP 4.2%e 4.0%p, as well personal income, personal spending &amp; inventories due. PCE is also on the cards as are a few Fed activity measures (Chicago &amp; Dallas), consumer confidence &amp; durable goods. &nbsp;<br /> <br /> </span></li> <li><strong><span >CBs</span></strong><span >: Light with rate decision out of New Zealand 0.25% e/p &amp; South Korea 0.50% e/p.<br /> <br /> </span></li> <li><span >Key focus is likely on Powell Testimony on Tue &amp; Wed<br /> <br /> </span></li> <li><strong><span >Hols</span></strong><span >: JP out on Tues.<br /> </span></li> </ul> <h4 class="heading--4"><span >New Dragon Interview&ndash; Global Macro &amp; Nature Conservationist Geo Chen</span></h4> <p> Our third Dragon Interview takes us to an outlier&rsquo;s outlier, with a world class trader, investor &amp; Nature Conservationist Geo Chen.&nbsp;</p> <p>We had the pleasure of sitting down &amp; speaking with Geo who is:</p> <p > <a href="https://www.rainforesttrust.org/">Board Member @ The Rain Forest Trust</a><br /> <br /> <a href="https://huangchenfoundation.org/">Co-Founder of the Huang Chen Foundation </a>&nbsp;[Nature Conservation Focus]</p> <p ><a href="https://twitter.com/geochen">@geochen</a></p> <p> Whilst the interview was filmed at the tail-end of Nov 2020, there is something here for everyone to take something away, including bigger picture thoughts on 2021, broader implications of the macro regime that we are in, as well as overall framework, allocation &amp; investment process.<br /> <br /> Geo has been running his own capital across both liquid &amp; illiquid strategies since 2017, chalking up +8x returns in the process, which more importantly fuel Geo &amp; his family&rsquo;s passion &amp; calling, for Nature Conservation. <br /> <br /> What is impressive outside of the large returns over the period, is that Geo somehow does it all &ndash; from trading to investing, to internal capital allocations as well as external allocations across the entire asset class &amp; strategies spectrum. I.e. its tough enough to consistently do well in one area, lets alone across the board. <br /> <br /> We cover his come up story, his framework + process &amp; approach, his passion &amp; the importance of the Nature Conservation. Lastly we close with Top of Mind Thoughts &amp; views for 2021 &amp; the general global macro regime that we are in.<br /> <br /> We hope you enjoy the interview, as much as we did putting it together. And if there is something that you take away from this, be it inspiration, enhanced framework, investment thesis that resonates, left you thinking, etc&hellip; &nbsp;<br /> <br /> <a href="https://www.rainforesttrust.org/?form=donation">Do consider making a donation to the Rain Forest Trust</a> &ndash; which buys up rainforest land around the world &amp; maintains them within an ecosystem of local residents. <br /> <br /> From a markets perspective these are some of the areas we touched on:</p> <ul> <li>How Geo fared in 2020, given the massive bullishness in Jan, crazy sell-off in Feb &amp; Mar, then once again bullish recovery in Apr &amp; May<br /> <br /> </li> <li>Inflationary regime &amp; the huge fiscal forces that we are seeing<br /> <br /> </li> <li>Precious Metals &amp; US duration<br /> <br /> </li> <li>Bitcoin &amp; Crypto<br /> <br /> </li> <li>Energy</li> </ul> <p><a href="https://www.home.saxo/content/articles/macro/dragon-interview-with-geoffrey-chen-20022021">We hope you enjoyed this Dragon Interview, as much as we enjoyed putting it together</a><br /> <br /> Namaste,</p> <p>-KVP</p> <p >Ps. Yes, the video player in the platform/website is a pain with no ability for an acceleration option (been kicking up a storm about this internally for years). Will have a u-tube linked version later this wk, as its one of those pieces that is worth re-watching a few times&hellip; lot to digest.&nbsp;&nbsp;</p> <h4 class="heading--4"><span >Previous Dragon Interviews</span></h4> <ul> <li><span >Ever wondered what it would be like to be a Proprietary Trader of Global Currencies over multiple market regimes across the world?<br /> <br /> </span></li> <li><span ><a href="https://www.home.saxo/content/articles/macro/kvp-interview-with-keith-dack-22012021">In the our second Dragon Interview series, we sit down &amp; jam with the talented, as well as always witty Keith Dack &ndash; known as Dacky in the markets.<br /> </a></span> <p><span >-</span></p> </li> <li><span >Ever wondered how a Macro CIO would approach the top-down process?<br /> <br /> </span></li> <li><span >Discussing Global Macro &amp; the Building Out of a Hedge Fund the AVM Way, with the Class-of-One Ashvin Murthy<br /> <br /> </span></li> <li><span ><a href="https://www.home.saxo/content/articles/macro/ashvins-avm-global-sat-24-oct-2020-24102020">Going into year 5 in one of the toughest &amp; dynamic changing Global Macro Regimes, AVM has returned +42.7% since its Nov 2016 inception, with an astounding Sharpe of +1.7x. Catch the great interview with Ashvin here</a>.&nbsp;&nbsp;</span></li> </ul> <ul> </ul> <p class="Default" ><strong><span > </span></strong></p> <ul ></ul> <p ><span >-</span></p> <p ><span >Start-to-End = Gratitude + Integrity + Vision + Tenacity | Process &gt; Outcome | Sizing &gt; Position.</span></p> <p class="text--body"><span><strong> <span ></span></strong><span >This is the way&nbsp;</span></span></p> <p class="text--body"> </p> KVP <h4 class="heading--4"></h4> <p><span> </span></p></div></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>AUD</span> <span>JPY</span> <span>CHF</span> <span>EUR</span> <span>GBP</span> <span>NZD</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a> <span>Gold</span> <span>USDTRY</span> <span>USDNOK</span> <span>EURNOK</span> <span>USDMXN</span> <span>FX Technical</span> <span>Brexit</span> <span>Usdrub</span></div>Sun, 21 Feb 2021 23:00:00 Z2021-09-21T11:22:59Z{3CB20B47-C9C5-40A4-9B58-4A1894B52FF9}https://www.home.saxo/en-mena/content/articles/macro/dragon-interview-with-geoffrey-chen-20022021Kay Van-Petersenproduct-macroInflationInflationSGFocus Inflationproduct-equitiesEducationproduct-forexproduct-forexproduct-commoditiessector-Commodityproduct-bondsproduct-bondsExceptional Returns, with Global Macro Trader & Nature Conservationist Geoffrey Chen<div class="article-excerpt">Our third Dragon Interview takes us to an outlier's outlier, with world-class trader & investor Geo Chen. Geo has been running his own capital across both liquid & illiquid strategies & allocations since 2017, Clocking exceptional returns in the process, which more importantly fuels Geo & his family's passion & calling for nature conservation.</div><div class="article-rte"><div class="rte--output"><p>We had the pleasure of sitting down and speaking with Geoffrey Chen&nbsp;who is:</p> <ul> <li>Board Member @ <a rel="noopener noreferrer" href="https://www.rainforesttrust.org/" target="_blank">The Rain Forest Trust<br /> <br /> </a></li> <li>Co-Founder @ The <a rel="noopener noreferrer" href="https://huangchenfoundation.org/" target="_blank">Huang Chen Foundation<br /> <br /> </a></li> <li><a href="https://twitter.com/geochen">@geochen on Twitter&nbsp;</a></li> </ul> <p >Post a career in banking, Geo has been running his own capital since 2017 through his family office.&nbsp;<br /> <br /> What is impressive outside of the large returns over the period, is that Geo somehow does it all &ndash; from trading to investing, to internal capital allocations as well as external allocations.&nbsp;<br /> <br /> We cover his come-up story, his framework + process &amp; approach, his passion &amp; the importance of nature conservation, as well as Top of Mind Thoughts &amp; views for 2021 &amp; the general global macro regime that we are in.<br /> <br /> We hope you enjoy the interview, as much as we enjoyed putting it together. <br /> <br /> And if there is something that you take away from this, be it inspiration, enhanced framework, made you think, investment thesis that resonates, etc&hellip;&nbsp;&nbsp;<br /> <br /> <a rel="noopener noreferrer" rel="noopener noreferrer" href="https://www.rainforesttrust.org/?form=donation" target="_blank">Do consider making a donation to the Rain Forest Trust</a> &ndash; <span >which buys up rainforest land around the world &amp; maintains them within an ecosystem of local residents.&nbsp;</span></p> <div>From a markets perspective these are some of the areas we touched on:</div> <ul > <li>How Geo fared in 2020, given the massive bullishness in Jan, crazy sell-off in Feb &amp; Mar, then once again bullish recovery in Apr &amp; May<br /> &nbsp;</li> <li>Inflationary regime &amp; the huge fiscal forces that we are seeing<br /> <br /> </li> <li>Precious Metals &amp; US duration<br /> <br /> </li> <li>Bitcoin &amp; Crypto<br /> <br /> </li> <li>Energy&nbsp;</li> </ul> <div>Namaste,<br /> <br /> -KVP<br /> <br /> <span class="underline; ">Previous Dragon Interviews</span>:<br /> <br /> - Proprietary Trading Global Currencies with&nbsp;<a rel="noopener noreferrer" rel="noopener noreferrer" href="https://www.home.saxo/content/articles/macro/kvp-interview-with-keith-dack-22012021" target="_blank">Keith Dack</a><br /> <br /> - Global Macro Investing the AVM Way with&nbsp;<a rel="noopener noreferrer" rel="noopener noreferrer" href="https://www.home.saxo/content/articles/macro/ashvins-avm-global-sat-24-oct-2020-24102020" target="_blank">Ashvin Murthy</a></div></div></div><div class="article-video"><iframe title="" src="//saxobank.23video.com/13846859.ihtml/player.html?source=embed&photo_id=67250790"></iframe></div><div><img style="float: left; margin-right: 12px;" src="https://www.home.saxo/-/media/images/icons/saxostrats/strats-kay-2020-400x400.jpg?mw=48" alt="Kay Van-Petersen" /><div>Kay Van-Petersen</div><div>Global Macro Strategist</div><div>Saxo Bank</div></div><div ><b>Topics:</b> <a href="https://www.home.saxo/en-mena/insights/news-and-research/macro">Macro</a> <span>Inflation</span> <span>InflationSG</span> <span>Focus Inflation</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/equities">Equities</a> <span>Education</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/forex">Forex</a> <span>Forex</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/commodities">Commodities</a> <span>Commodity</span> <span>Bonds</span> <a href="https://www.home.saxo/en-mena/insights/news-and-research/bonds">Bonds</a></div>Sat, 20 Feb 2021 07:00:00 Z2021-02-22T08:52:59Z