Global Macro Strategist
Summary: Macro Dragon = Daily Cross-Asset Global Views
2020-Jan-10
We’ll be shaking things up from KVP’s side, so expect a lot more trade views going forward, as well as 20 long-term trades views for 2020 – which KVP will do a special piece & mini-series on.
Ok let’s get after it…
KVP: You know sometimes these Macro Dragons just write themselves… & other times its like trying to conduct surgery to separate a cluster of quarks…
Stan: Are you reading more Neil DeGrasse Tyson books?
KVP: Hey man don’t knock Astrophysics… it generally makes more sense than the markets…
Stan: So how many Macro Dragons have you done?
KVP: Like in total?
Stan: Yeah dude, in total … sum of… all of the above…
KVP: Eh… including today? Cinco…
Stan: [long pause… rolls eyes slowly… then goes back to reading the paper]
We continue to lift higher on equities & general risk-on sentiment.
As per KVP’s morning Saxo Wire, which you can catch on the SaxoTraderGo platform:
Asia Fri Start: Risk-on sentiment cont. as covered in KVP’s Macro Dragon on Mon. SPX +0.67% 3274, DAX +1.31% 13495. USTs still same 1.87 lvls of Thu. DXY now up 3 Days in a row for +0.81% to 97.45. Gold pulls back for 2nd day -0.26% 1552, Brent starting to settle -0.11% to 65.37
If you don’t already know, the Saxo Wire are alerts that come pop up for clients that are logged on – coming directly from our phenomenal Global Trading team, as well as the Sensation SaxoStrats squad. So on days like earlier this wk, it can make a big difference for clients looking for anchors of clarity amidst the noise. Here was a phenomenal example, that ended up being back on if you had the same skew for a bounce.
Wed Jan 8 Singapore Morning
US/Iran Trade Views: Think more risk-off look to potentially short both USDCHF & EURCHF -0.05% & -0.03% vs. -0.27% for USDJPY. Those playing a bounce can reverse those shorts trade views, plus long USDJPY at these c. 108 lvls & long Puts on gold c. $1590, with $1550-75 strikes
So that’s The Wire… “A man got to have a code”
It worth noting that AUD & NZD did not join the risk-on sentiment party o/n as they were down -0.12% & -0.47% vs. the USD…
So KVP would be looking at laggards, if your skew is that the Risk-on party cont. Which is KVP’s former & current view – for now…
On a side-side note, apart from extending the 4yr prezi term to a one 8yr term, not paying congress if they go 2-3 months without significant agreements/progress, think having a VP from another party would also be a great principle for cohesion in the system. And yes, the US needs more parties – if you really only have two, you have a duopoly & we all know how “fair” those systems are.
Anyhow, no one has done the calculus on Pence vs. rest of Dems Fields – yet he has the economy going for him (this is a massive deal, especially for minorities that generally rate this as #1), no doubt Trump’s supporters, as well as the Christian base. What he definitely does not have, is Trump’s Charisma which can cut both ways.
Probably still the only one that can really beat Trump is Sanders. To paraphrase roughly, the only way to beat Crazy is by Crazier! And by that, it’s the voter base. It going to sound crazy, but the American voters are still not ready for a woman president – Yet once they do (& they will get one), we are likely never going back which is likely a good thing.
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.
