- The strong move in USDJPY and other USD pairs towards the end of last week caught our attention and is due to Powell letting go of the wheel on USD real interest rates.
- The US economy’s weekly credit data continues to weaken and we are on track for a US credit contraction in the first/second quarter of next year.
- Powell is probably right to give up on tightening USD real interest rates, but the question is whether he might be tempted to take back control in December with a final policy blunder?
- Korea Exchange today announced the realignment and delisting of KOSPI 200. There were 14 new additions and 14 deletions (7 each).
- Surprises in the KOSPI 200 realignment included the addition of Seah Besteel and the deletion of HDC Hyundai Development.
- There were many more additions and deletions in KOSDAQ 150 (34 additions and deletions in total). New additions to the KOSDAQ 150 included Neowiz, JNTC, Lunit and Jeio.
- Japan is facing a number of economic headwinds, reflected in the underperformance of the yen. Given short-term problems and structural challenges, the BoJ’s work is not to be envied.
- Since early September, the yen has been the strongest performer among major currencies, falling to a 33-year low against the USD.
- The weak outlook justifies continued loose monetary policy. However, this leads to other problems that force BoJ intervention to support the yen.
- Available data through October suggests that prevailing GDP growth may be weaker than in the previous quarter
- An indicator of private households’ propensity to save appears to remain at an elevated level, partly due to greater uncertainty
- Despite recent disinflationary numbers, the most persistent category of HICP inflation appears to remain at around double the pre-pandemic average level
- Poor results from the U.S. Treasury Department’s recent 30-year bond auction highlight limited interest from private investors. Pressure has increased on the Treasury to continue taking out large amounts of short-term borrowing.
- Aggressive quantitative easing and reserve compounding have significantly reduced U.S. banks’ trading in the federal funds market, while Federal Home Loan Banks currently dominate lending.
- The Fed’s key interest rate could switch to the Secured Overnight Funding Rate. Functionality could be affected by changing perceptions of the collateral quality of government bonds due to high levels of borrowing.
- The meeting between Biden and Xi signals a positive phase for reduced geopolitical risks in the Asia-Pacific region. Beijing and Washington are prioritizing overcoming their domestic challenges over intensifying competitive activities.
- Taiwan’s presidential polls also reinforce China’s wait-and-see approach as the Sino-skeptical DPP faces headwinds in maintaining its hold on power.
- Japan’s more nuanced strategy has resonated with Asian countries. For this reason, the country is proving to be a real winner in the geopolitical game in Asia.
- The recovery of US stocks after the low point at the end of October is characterized by strong price momentum and has high upside potential.
- Scatter and number charts represent measured goals that show percentage gains in the high teens or low 20s.
- We also offer a number of sell signal triggers that indicate potential turning points in risk-reward potential.
- We start the 5 things we’re watching this week with a look at the Ifo survey due this Friday in the midst of the black zero ruling.
- We then talk about US interest rates and Nvidia earnings, then we talk about the USD and finally we finish with gasoline demand.
- This week we’re paying attention to the following five themes within global macroeconomics: IFO, US interest rates, earnings revisions, the USD, gasoline.
- Happy Monday to everyone from cold and rainy Copenhagen.
- We are now long crude oil again as we believe the narrative is too pessimistic given the fundamentals.
- Before we start talking about our crude oil case, we would like to highlight the volatility in energy markets post-COVID-19 and how this benefited sellers in futures markets more than buyers who kept storage costs constant.
- The proportion of global funds invested in Taiwan reaches an all-time high of 57.8%.
- Taiwan has been one of the main beneficiaries of manager rotation over the past six months, alongside India, Argentina and South Korea.
- TSMC is the dominant equity holding with 49.8% of funds and has achieved record ownership among global funds.
Weekly top ten macro and cross-asset strategy
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