Global Macro Strategist
Summary: Morning APAC Global Macro & Cross-Asset Snapshot
TGIF & Happy Macro Fri 27 Sep 2019
APAC Global Macro Morning Call
O/N, Levels & Thoughts:
Nothing new & material standing out to me overnight… expected steam around the whistle blower & the dem's move to start an impeachment investigation
Asset Class Overview:
Continuing to see the grind up in the US Dollar Continue, DXY above 99 into the end of the wk is technically very bullish – it could mark the first wkly close on the DXY since May 2017, giving Trump & the Fed one more headache into the wkd
Spot gold 1505 was basically flat o/n, yet spot Silver 17.82 continued on the retreat with a -0.49% move. Brent Crude revered it previous day’s move with a +0.34% climb to 62.60. Copper 257.75 & Palladium 1643, went separate ways at -1.35% & +1.93% respectively
US equities closed down, despite a positive close across the board from their European cousins. We have the Dax up +0.44% at 12288 whilst the S&P 2977 & the Nasdaq100, 7772 were down -0.24% & -0.40%. VIX whilst up c. +14% over the last 4 trading days, was up +0.69% o/n to 16.07
Bond yields were a touch tighter, yet we are not too far off of the ranges we have been: USTs 1.69%, Bunds -58bp & JGBs -25bp
Central Banks:
As per consensus views, we saw 25bp cuts o/n from central banks out of Mexico & the Philippines, bringing those respecting rates to 7.75% & 4.00%
ECON:
The EZ saw an expansion in Money Supply at 5.7%a 5.1%e, private loans meanwhile were in-line at 3.4%. US final 2Q GDP reading was also in-line at 2.0%
Wholesale inventories missed climbed to 0.4%a vs. 0.1%e & the unemployment claims at 213K were not far off from the 210k that was expected
Today:
Next Week:
Other:
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
