Asia Wrap : Rhyme or Reason
There does not appear to be too much rhyme or reason to move the market today; pre-Lunar New Year is typically a low liquidity period for Asian assets, although it is hard not to be bullish across the region based on the improving economic landscape. Hence some tiny buy orders coming down the pipe could…
Oil update: The Problem With Getting Too Far Over Your Skis
Commodity markets are spot assets, meaning they cannot overlook the various short-term shocks and air pockets, in the same way, discounting assets as equities and bonds can. As such, the asset class is outlandishly volatile, and virtually everyone’s speculative position remains hostage to the non-stop stream of macroeconomic, political, and financial market crosswinds. After 30…
Asia Open : East vs West divergence continues
Given the sizable upside for regional trade supporting local economies and the ASEAN Bursas, stocks in Asia are nudging up despite weakness in the US market as East vs. West divergence continues. After all, Mainland China is the largest export market for most regional economies, so the China reopening bounce is particularly pronounced locally. Australia is…
Ominous Dark Clouds
GLOBAL MARKETS US stocks are trading lower again as stronger-than-expected macro releases are being set against a bunch of slightly weaker earnings updates. On the growth front, investors are digesting that business sentiment and the US housing market may be finding a bottom, but rate hikes ominously that the labour market remains tight. The Philly…
Asia Wrap : Grappling with Peak Fed Lag Effects
MARKETS I suspect hard US economic data will be under the magnifying glass for the foreseeable future after the US consumers finally catch down, as they often do to the soft survey data. But the US may also be grappling with the peak Fed lag effect, which could weigh on immediate growth and even trigger…
European Open: Lessons to be learned
To say that a further slowdown in industrial production was telegraphed in advance would be an understatement, as now investors take the run of soft survey data in the US at the stated value. And while it felt like we were in cruise control on China reopening and moderation in gas prices that have massively…
Asia Open: Clear message to start 2023
While the US Beige book was a portrait of an economy at a virtual standstill, China reopening paints a picture of an economy on the verge of the hustle and bustle. The clear message to start 2023 has been clear as a whistle: while last year was about Fed and ECB normalization, this year will…
Those nasty Fed lag effects
GLOBAL MARKETS US stocks are trading considerably lower Wednesday as concerns around softer growth indicators appear to be overwhelming the ‘good news’ from a benign PPI release triggering a steep drop in Treasury yields as recessionary concerns shift back into the forefront. And while the fundamental backdrop for stocks has improved over the past month,…
24 Hour Round Tripper? USDJPY + Oil Markets
Despite the BoJ exercising their best efforts to keep the Yen from strengthening too much too soon by holding the line on YCC, traders quickly looked through the messaging and concluded, given the current environment where bond traders will show little respect to YCC, FX traders were quickly off the mark selling USDJPY, which incredulously, after…
Asia Wrap: Cruise Control + BoJ Debate
China re-opening and moderation in gas prices have improved the global growth outlook and reduced the recessionary tail. Add to this the easing in financial condition and rising real disposable incomes, with inflation moderating, and we are likely more in cruise control than deceleration mode. The post-BoJ debate has predictably started among Tokyo center banks….
