Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>With core PCE and core CPI both rising more than 4.8%MoM annualised in recent months, and up 4.7%YoY and 5.3%YoY respectively, the pause could only be justified with forward hawkishness.  </li>
<li>ISM manufacturing PMI below 50 for six months, manufacturing new orders below 50 for 9 months, and Services PMI at 50.3 now, suggest that the US is already in recession.</li>
<li>We continue expecting the FedFunds rate to peak at 5.5%, with the Apr-Sep'23 recession and lagged impact of rate hikes enabling core PCE inflation to subside to 3%YoY by end-2023.</li>
</ul>


With core PCE and core CPI both rising more than 4.8%MoM annualised in recent months, and up 4.7%YoY and 5.3%YoY respectively, the pause could only be justified with forward hawkishness.  
ISM manufacturing PMI below 50 for six months, manufacturing new orders below 50 for 9 months, and Services PMI at 50.3 now, suggest that the US is already in recession.
We continue expecting the FedFunds rate to peak at 5.5%, with the Apr-Sep'23 recession and lagged impact of rate hikes enabling core PCE inflation to subside to 3%YoY by end-2023.


FOMC's Hawkish Pause: Recession and a FF Peak of 5.5% to Finally Restrain Core PCE

Global Multi-Asset Investment Strategist, True Insights

Jeroen Blokland

Global Multi-Asset Investment Strategist

Build Well-Diversified Multi-Asset Portfolios

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Our research helps investors build well-diversified multi-asset portfolios and profit from market developments. In addition, our unique and proven Macro – Sentiment – Valuation (MSV) investment framework ensures a consistent flow of new investment opportunities. Together with our market views, these opportunities will be reflected in our live ETF-based Global Multi-Asset Portfolios.

Cross Asset Strategy

<ul>
<li>The ISM Manufacturing Index scenarios call for a long US Treasuries, short (US) Equities strategy in each scenario.</li>
<li>Financial conditions paint a rosier picture for equities than the ISM Manufacturing, yet downside prevails. </li>
<li>Despite the uptick in US Macro surprises, global economic surprises are dropping. As a result, a massive gap has opened between the MSCI World Index performance and macro surprises. </li>
</ul>


The ISM Manufacturing Index scenarios call for a long US Treasuries, short (US) Equities strategy in each scenario.
Financial conditions paint a rosier picture for equities than the ISM Manufacturing, yet downside prevails. 
Despite the uptick in US Macro surprises, global economic surprises are dropping. As a result, a massive gap has opened between the MSCI World Index performance and macro surprises. 


Macro Market Indicators (June 2023)(Update)

<ul>
<li>Since 1970, there hasn’t been a single time continuing claims were up as they are today, without a recession attached to it.</li>
<li>After being bearish for nearly the entirety of the past 18 months, US retail investors have capitulated. A strong contrarian signal.</li>
<li>And we look at drawdowns and the distance to the 200-day moving average to find cracks in market sentiment.</li>
</ul>


Since 1970, there hasn’t been a single time continuing claims were up as they are today, without a recession attached to it.
After being bearish for nearly the entirety of the past 18 months, US retail investors have capitulated. A strong contrarian signal.
And we look at drawdowns and the distance to the 200-day moving average to find cracks in market sentiment.


The Weekly Market Monitor (23) - Fighting Sentiment?

<ul>
<li>Based on the historical lag between yield curve inversion and the beginning of a US recession, the next downturn should commence in Q4 of this year or Q1 of 2024.</li>
<li>Our research reveals that all asset classes performed quite well between the start of yield curve inversion and the start of a recession. </li>
<li>None of the asset classes in our sample experienced negative returns between the first inversion and the start of the US recession. </li>
</ul>


Based on the historical lag between yield curve inversion and the beginning of a US recession, the next downturn should commence in Q4 of this year or Q1 of 2024.
Our research reveals that all asset classes performed quite well between the start of yield curve inversion and the start of a recession. 
None of the asset classes in our sample experienced negative returns between the first inversion and the start of the US recession. 


Navigating the Yield Curve: What It Means for Equities, Other Assets, and Recession

United States

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31, 1969. MXWO includes developed world markets, and does not include emerging markets. MXWD includes both emerging and developed markets.

MSCI World Index (MXWO INDEX)

FOMC's Hawkish Pause: Recession and a FF Peak of 5.5% to Finally Restrain Core PCE

We've FOMC critics since Dec'21. ISM manuf'g new orders <50 for 9 months affirm the US is in recession. That, with the FF rate at 5.5% by Sep'23,...

Prasenjit K. Basu

Macro Market Indicators (June 2023)(Update)

We look at 'Macro Market Indicators' that say something about the direction of markets and the relative attractiveness of different asset classes.

Jeroen Blokland

Macro Market Indicators (June 2023)

We look at 'Macro Market Indicators' that say something about the direction of markets and the relative attractiveness of different asset classes.

Jeroen Blokland

The Weekly Market Monitor (23) - Fighting Sentiment?

US labor market data, US Recession Scoreboard, Eurozone recession, the looming Credit Crunch, market sentiment, momentum, drawdowns, cross-asset...

Jeroen Blokland

Navigating the Yield Curve: What It Means for Equities, Other Assets, and Recession

Shedding more light on what US yield curve inversion actually means for the likelihood of US recessions and asset class returns.

Jeroen Blokland