Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

FX & Rates

<ul><li>U.S. interest rates have been climbing since early January 2024 after reaching their lowest points between December 27th and January 11th.</li><li>For example, the yield on 2-year Treasury bonds has increased by 52 basis points (bps), and the yield on 10-year bonds has risen by 49 bps since their respective lows.</li><li>Similarly, the Dollar Index (DXY), which measures the value of the U.S. dollar against a basket of other currencies, experienced its weakest point on December 28th, 2023.</li></ul>

U.S. interest rates have been climbing since early January 2024 after reaching their lowest points between December 27th and January 11th.For example, the yield on 2-year Treasury bonds has increased by 52 basis points (bps), and the yield on 10-year bonds has risen by 49 bps since their respective lows.Similarly, the Dollar Index (DXY), which measures the value of the U.S. dollar against a basket of other currencies, experienced its weakest point on December 28th, 2023.

US Dollar: Trend Reversal or Start of Bull Run

Podcast by J.P. Morgan analysts on global markets, At Any Rate

At Any Rate

Podcast by J.P. Morgan analysts on global markets

Analysts from J.P. Morgan’s Research team take a closer look at the stories behind some of the biggest trends, themes and developments in markets today.

<ul>
<li>The increase in news articles mentioning tariff and trade war risks is making it difficult for cyclical currencies like the euro to factor in any potential growth outside of the US.</li>
<li>US exceptionalism is evident in strong services ISM and relative equity performance, which is leading to the dollar's dominance in capital flows.</li>
<li>The Chinese yuan is facing bearish sentiment due to double-digit drawdowns in onshore equity indices, deepening deflation, weak sentiment in the housing market, and limited policy options for policymakers. Outbound travel restrictions during the Chinese New Year season also add to the pressure on the currency. However, there have been some positive signs in financial flows, such as stabilization in equity flows and increased bond purchases by foreigners. Overall, the outlook for the yuan remains bearish.</li>
</ul>
This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.


The increase in news articles mentioning tariff and trade war risks is making it difficult for cyclical currencies like the euro to factor in any potential growth outside of the US.
US exceptionalism is evident in strong services ISM and relative equity performance, which is leading to the dollar's dominance in capital flows.
The Chinese yuan is facing bearish sentiment due to double-digit drawdowns in onshore equity indices, deepening deflation, weak sentiment in the housing market, and limited policy options for policymakers. Outbound travel restrictions during the Chinese New Year season also add to the pressure on the currency. However, there have been some positive signs in financial flows, such as stabilization in equity flows and increased bond purchases by foreigners. Overall, the outlook for the yuan remains bearish.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Global FX: Tariff Risks and US Exceptionalism Support the Dollar

<ul><li>The combination of policy decisions in the US rates markets has led to a significant decline in tenure yields.</li><li>There appears to be policy coordination between fiscal and monetary authorities, with the treasury displaying flexibility and the Fed focusing on tightening in financial conditions.</li><li>The upcoming Fed meeting is anticipated to provide forward guidance on policy tightening, with expectations of a move towards a neutral bias and steps towards eventual easing or cutting. Inflation language in the statement may also be up for debate.</li></ul>This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

The combination of policy decisions in the US rates markets has led to a significant decline in tenure yields.There appears to be policy coordination between fiscal and monetary authorities, with the treasury displaying flexibility and the Fed focusing on tightening in financial conditions.The upcoming Fed meeting is anticipated to provide forward guidance on policy tightening, with expectations of a move towards a neutral bias and steps towards eventual easing or cutting. Inflation language in the statement may also be up for debate.This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

US Rates: The Calm Before The (Policy) Storm

<ul><li>The bond basis is a significant concern for investors, as the long end of the curve has been steepening and rates are rising, increasing the probability of shifts in the cheapest deliverable (CTD).</li><li>There are several bonds that are nearly equally cheap, meaning they are not currently the CTD but are close enough to potentially become the CTD. This could impact futures pricing.</li><li>Investors who are long the March bond futures contract can hedge against the risk of CTD duration extension by buying March bond contract puts with a strike price of 118. This can mimic a long basis position.</li></ul>This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

The bond basis is a significant concern for investors, as the long end of the curve has been steepening and rates are rising, increasing the probability of shifts in the cheapest deliverable (CTD).There are several bonds that are nearly equally cheap, meaning they are not currently the CTD but are close enough to potentially become the CTD. This could impact futures pricing.Investors who are long the March bond futures contract can hedge against the risk of CTD duration extension by buying March bond contract puts with a strike price of 118. This can mimic a long basis position.This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

US Rates: Polar Vortex Duration Extension

<ul><li>The market is pricing in a 25 basis point cut in the June meeting, with additional easing expected to reach a neutral level by the first half of 2025.</li><li>The ECB is expected to remain on hold at the upcoming meeting, with the focus on their updated views on growth, inflation, and any forward guidance.</li><li>The sell-off in recent weeks has been driven by the repricing of monetary easing expectations, but the strategic over duration stance remains comfortable, particularly in the medium term.</li></ul>This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

The market is pricing in a 25 basis point cut in the June meeting, with additional easing expected to reach a neutral level by the first half of 2025.The ECB is expected to remain on hold at the upcoming meeting, with the focus on their updated views on growth, inflation, and any forward guidance.The sell-off in recent weeks has been driven by the repricing of monetary easing expectations, but the strategic over duration stance remains comfortable, particularly in the medium term.This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

Global Rates: January ECB Meeting and Euro Rate Markets

United States

The euro is the official currency of the European Economic & Monetary Union.  The US dollar is the official currency of the United States of America.

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US Dollar: Trend Reversal or Start of Bull Run

U.S. interest rates have been climbing since early January 2024 after reaching their lowest points between December 27th and January 11th.

Untying The Gordian Knot

Global FX: Tariff Risks and US Exceptionalism Support the Dollar

US exceptionalism is evident in strong services ISM and relative equity performance, which is leading to the dollar's dominance in capital flows.

At Any Rate

US Rates: The Calm Before The (Policy) Storm

The US rates market has experienced a slowdown in coupon auction increases and ruled out the possibility of further rate hikes, while the Federal...

At Any Rate

US Rates: Polar Vortex Duration Extension

Investors who are long the March bond futures contract can hedge against the risk of CTD duration extension by buying March bond contract puts with...

At Any Rate

Global Rates: January ECB Meeting and Euro Rate Markets

The ECB is expected to remain on hold at the upcoming meeting, with the focus on their updated views on growth, inflation, and any forward guidance.

At Any Rate

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)