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.

Technical Analysis

<ul>
<li>The US market led the global equity rally as the invasion started. The long bond yields rose, and the yield curve steepened</li>
<li>European markets did well on Thursday and Friday but failed to recover as strongly as US stocks. Asia was a laggard in general.</li>
<li>I would have been more confident of the equity rally had the long bond yields rose on Friday, and the curve steepened.</li>
</ul>


The US market led the global equity rally as the invasion started. The long bond yields rose, and the yield curve steepened
European markets did well on Thursday and Friday but failed to recover as strongly as US stocks. Asia was a laggard in general.
I would have been more confident of the equity rally had the long bond yields rose on Friday, and the curve steepened.


Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

FX & Rates

<ul>
<li>Following the invasion of Ukraine by Russia, it is only a matter of time before the US and other western allies impose a new set of economic sanctions on Russia</li>
<li>A directive from the US Treasury this week expanded the restrictions on Russian bonds as it prohibits participating in the secondary market of new bonds, thereby cutting financing for Russia. </li>
<li>With new sanctions on the way, the risks to Russian bonds have increased. I list the possible risks for holders of Russian bonds under different scenarios.</li>
</ul>


Following the invasion of Ukraine by Russia, it is only a matter of time before the US and other western allies impose a new set of economic sanctions on Russia
A directive from the US Treasury this week expanded the restrictions on Russian bonds as it prohibits participating in the secondary market of new bonds, thereby cutting financing for Russia. 
With new sanctions on the way, the risks to Russian bonds have increased. I list the possible risks for holders of Russian bonds under different scenarios.


Risks to Russian Bonds from Escalating Sanctions

<ul>
<li>In an environment marked by uncertainty with regards to the dollar's next move, EM currencies have been stable and LatAm currencies have outperformed Asia and CEEMEA so far this year.</li>
<li>The strong start for LatAm currencies is partly to make up for their underperformance last year and partly supported by their high carry relative to other currencies.</li>
<li>If risk aversion remains low, this trend should persist but given the uncertainty, it is best to be selective and target relative-value trades to take advantage of differences across countries.</li>
</ul>


In an environment marked by uncertainty with regards to the dollar's next move, EM currencies have been stable and LatAm currencies have outperformed Asia and CEEMEA so far this year.
The strong start for LatAm currencies is partly to make up for their underperformance last year and partly supported by their high carry relative to other currencies.
If risk aversion remains low, this trend should persist but given the uncertainty, it is best to be selective and target relative-value trades to take advantage of differences across countries.


Will Latin American Currencies Continue to Outperform Against Asia and CEEMEA?

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

EURO STOXX 50 Price EUR / Technical Analysis

<ul>
<li>Big supports are under pressure in Europe on Ukraine tensions amid a strong USD/RUB thrust that shows potential to bleed into the global cycle.</li>
<li>Eurostoxx 50 4,000 support and DAX 14,900 are under pressure/breaking down. Both indices must re take key support to avert a painful decline.</li>
<li>USD/RUB is bullish above 75 with the next threshold at 81, above would target 85.</li>
</ul>


Big supports are under pressure in Europe on Ukraine tensions amid a strong USD/RUB thrust that shows potential to bleed into the global cycle.
Eurostoxx 50 4,000 support and DAX 14,900 are under pressure/breaking down. Both indices must re take key support to avert a painful decline.
USD/RUB is bullish above 75 with the next threshold at 81, above would target 85.


Europe Support Breaks and USD/RUB Breaking Higher

<ul>
<li>The turnaround of Asian currencies is likely to continue with growth resurfacing in the region ex-China and the interest rate differential with the rest of emerging markets narrowing.</li>
<li>The main risks to watch are whether the slowdown in China worsens and weighs on the region as a whole and whether central banks embark on FX interventions again.</li>
<li>While the overall view on Asian currencies is constructive, I prefer cross-country trades to take advantage of differences arising from idiosyncratic drivers and to eliminate the dollar risk.</li>
</ul>


The turnaround of Asian currencies is likely to continue with growth resurfacing in the region ex-China and the interest rate differential with the rest of emerging markets narrowing.
The main risks to watch are whether the slowdown in China worsens and weighs on the region as a whole and whether central banks embark on FX interventions again.
While the overall view on Asian currencies is constructive, I prefer cross-country trades to take advantage of differences arising from idiosyncratic drivers and to eliminate the dollar risk.


Drivers Behind the Turnaround of Asian Currencies

Russia

The Russian ruble is the official currency of The Russian Federation. 

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

RUB (USDRUB CURNCY)

Buy at the Sound of Cannons

The US market led the global equity rally as the invasion started. The long bond yields rose, and the yield curve steepened

Untying The Gordian Knot

Risks to Russian Bonds from Escalating Sanctions

With new sanctions on the way, the risks to Russian bonds have increased. I list the possible risks for holders of Russian bonds under different...

Gautam Jain, PhD, CFA

Will Latin American Currencies Continue to Outperform Against Asia and CEEMEA?

If risk aversion remains low, LatAm currencies should continue to outperform but given the uncertainty, it is best to target relative-value trades...

Gautam Jain, PhD, CFA

Europe Support Breaks and USD/RUB Breaking Higher

Big supports are under pressure in Europe on Ukraine tensions amid a strong USD/RUB thrust that shows potential to bleed into the global cycle.

Thomas Schroeder

Drivers Behind the Turnaround of Asian Currencies

The turnaround of Asian currencies is likely to continue with growth resurfacing in the region ex-China and interest rate differential with the...

Gautam Jain, PhD, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)