Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

FX & Rates

<p>For our next webinar, we're excited to host Insight Provider <a href="https://www.smartkarma.com/profiles/gautam-jain-phd-cfa" target="_blank" data-smartkarma-citation="accounts:16876" rel="noopener">Gautam Jain, PhD, CFA</a> , who will be going over the process with which he comes up with trade ideas in Emerging Markets FX and Rates. </p><div><h3>The webinar will be hosted on Wednesday, 28 April 2021, 11:00 SGT/HKT.</h3></div><div>
<div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=87206774217" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div>
<div id="ember2586"><div><div>Gautam Jain has over 20 years of experience covering global emerging fixed income markets, both as a strategist and a portfolio manager. He has worked in buy-side and sell-side firms, including The Rohatyn Group (TRG Management), Barclays Capital, and Millennium Partners. He has helped manage emerging markets local-currency and hard-currency debt funds. The assets that he covers include currencies, interest rates, sovereign credits, and related derivatives. He specialises in portfolio construction, smart-beta index creation, and asset allocation. He holds a Ph.D. in Operations Research from Columbia University and is a CFA charter holder.</div></div></div>
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For our next webinar, we're excited to host Insight Provider Gautam Jain, PhD, CFA , who will be going over the process with which he comes up with trade ideas in Emerging Markets FX and Rates. The webinar will be hosted on Wednesday, 28 April 2021, 11:00 SGT/HKT.
Register for the Webinar here
Gautam Jain has over 20 years of experience covering global emerging fixed income markets, both as a strategist and a portfolio manager. He has worked in buy-side and sell-side firms, including The Rohatyn Group (TRG Management), Barclays Capital, and Millennium Partners. He has helped manage emerging markets local-currency and hard-currency debt funds. The assets that he covers include currencies, interest rates, sovereign credits, and related derivatives. He specialises in portfolio construction, smart-beta index creation, and asset allocation. He holds a Ph.D. in Operations Research from Columbia University and is a CFA charter holder.



Smartkarma Webinar | Alpha Bites: Trade Ideas in FX and Rates

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. 

Technical Analysis

<p>Buy DXY 91 to 90.50 overshoot to a align with the SPX top of the rising wedge near 4,180 for a peak in risk. Late April is the ideal timeline for a USD low base to form as a rally platform for a risk off cycle in May/June.</p><p>Expect some key lows for the USD in EM to pressure EM equities in coming months. USD in Asia bearish tactically into targeted lows to reverse positioning to long the USD.</p>

Buy DXY 91 to 90.50 overshoot to a align with the SPX top of the rising wedge near 4,180 for a peak in risk. Late April is the ideal timeline for a USD low base to form as a rally platform for a risk off cycle in May/June.Expect some key lows for the USD in EM to pressure EM equities in coming months. USD in Asia bearish tactically into targeted lows to reverse positioning to long the USD.

Fixed Income and Currency Strategist

Gautam Jain, PhD, CFA

<p>In this week’s Alpha Bites, we recommend going long the Indonesian rupiah (IDR) against the Singapore dollar (SGD) in a beta-neutral ratio. SGD NEER has appreciated close to its strongest level in a year ahead of the MAS policy meeting where we do no expect tightening yet. Meanwhile, IDR has been hit by uncertainty due to potential changes to the central bank’s mandate. However, with real rates among the highest in the world, we expect flows to stay supportive in Indonesia.</p>

In this week’s Alpha Bites, we recommend going long the Indonesian rupiah (IDR) against the Singapore dollar (SGD) in a beta-neutral ratio. SGD NEER has appreciated close to its strongest level in a year ahead of the MAS policy meeting where we do no expect tightening yet. Meanwhile, IDR has been hit by uncertainty due to potential changes to the central bank’s mandate. However, with real rates among the highest in the world, we expect flows to stay supportive in Indonesia.

Alpha Bites: Long Indonesia Rupiah (IDR) Vs Short Singapore Dollar (SGD)

Founder

Olivier Desbarres

Exacting. Excellent. Exceeding. Exemplary.

4X Global Research

4X Global Research was founded in 2017 to provide institutional and corporate clients with the substantive research, high-quality analysis and thoughtful insight on Emerging and G20 economies and financial markets they need to make informed and timely decisions and gain an edge in their investments.

<p><strong>We estimate that the USD-value of central bank FX reserves – adjusted for currency-valuation effects – in China, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand rose by about $342bn (1.5% of GDP) between end-March 2020 and end-February 2021 (see </strong><a href="https://www.smartkarma.com/insights/non-japan-asia-neers-and-fx-intervention" target="_blank" rel="noopener"><strong>Non-Japan Asia: NEERs and FX intervention</strong></a><strong>, 26<sup>th</sup> March 2021). </strong></p><p><strong>The increase, which ranged from 0.3% of GDP in China to nearly 28% of GDP in Singapore, was partly the result of central banks buying foreign currency in the FX market. At the very least NJA central banks’ FX intervention capped the pace of appreciation (CNY, KRW, IDR, THB and TWD) or contributed to (modest) NEER depreciation (INR, MYR, PHP), in our view.</strong></p><p><strong>Of course the matrix of exchange rate policy AND balance of payment flows, and their underlying drivers, is key to past and future currency performance.</strong></p><p><strong>In the past 12 months the MAS has kept the Singapore Dollar NEER within a very narrow range of about 1.2%, effectively neutralising Singapore’s significant current account surplus, to support the critical external sector and ultimately reflate the economy.</strong></p><p><strong>However, the Singapore Dollar NEER’s recent rally and jump in Singapore CPI-inflation in February arguably complicate the currency’ near-term outlook. </strong></p><p><strong>Along with consensus, we forecast that the MAS will leave the parameters – (zero) slope, width and central rate – of the Singapore Dollar NEER band unchanged at its forthcoming semi-annual policy meeting. We think the NEER could dip temporarily before rebounding.</strong></p><p><strong>The People’s Bank of China has allowed large external trade surpluses and capital account inflows into China to push the Chinese Renminbi NEER to a 270-week high.</strong></p><p><strong>But the Renminbi is showing some signs of altitude sickness. The pace of monthly appreciation has halved recently and the PBoC has fixed USD/CNY higher in 6 of the past 7 sessions. Importantly CPI-inflation remains stuck at the bottom of its five-year ranges.</strong></p><p><strong>In this context, we think the risk is biased towards the PBoC more actively negating FX inflows into China and towards modest Renminbi NEER downside near-term.</strong></p>

We estimate that the USD-value of central bank FX reserves – adjusted for currency-valuation effects – in China, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand rose by about $342bn (1.5% of GDP) between end-March 2020 and end-February 2021 (see Non-Japan Asia: NEERs and FX intervention, 26th March 2021). The increase, which ranged from 0.3% of GDP in China to nearly 28% of GDP in Singapore, was partly the result of central banks buying foreign currency in the FX market. At the very least NJA central banks’ FX intervention capped the pace of appreciation (CNY, KRW, IDR, THB and TWD) or contributed to (modest) NEER depreciation (INR, MYR, PHP), in our view.Of course the matrix of exchange rate policy AND balance of payment flows, and their underlying drivers, is key to past and future currency performance.In the past 12 months the MAS has kept the Singapore Dollar NEER within a very narrow range of about 1.2%, effectively neutralising Singapore’s significant current account surplus, to support the critical external sector and ultimately reflate the economy.However, the Singapore Dollar NEER’s recent rally and jump in Singapore CPI-inflation in February arguably complicate the currency’ near-term outlook. Along with consensus, we forecast that the MAS will leave the parameters – (zero) slope, width and central rate – of the Singapore Dollar NEER band unchanged at its forthcoming semi-annual policy meeting. We think the NEER could dip temporarily before rebounding.The People’s Bank of China has allowed large external trade surpluses and capital account inflows into China to push the Chinese Renminbi NEER to a 270-week high.But the Renminbi is showing some signs of altitude sickness. The pace of monthly appreciation has halved recently and the PBoC has fixed USD/CNY higher in 6 of the past 7 sessions. Importantly CPI-inflation remains stuck at the bottom of its five-year ranges.In this context, we think the risk is biased towards the PBoC more actively negating FX inflows into China and towards modest Renminbi NEER downside near-term.

Crunch Time for Singapore Dollar and Renminbi

Cross-Asset Liquidity Strategist, CrossBorder Capital

Michael J. Howell

Cross-Asset Liquidity Strategist

Implementing Research Using Alt Data & AI

CrossBorder Capital

CrossBorder Capital is a London-based independent investment advisory firm. Founded in 1996, it exploits a gap in the investment arena by focusing on Central bank liquidity. 

It specialises in the monitoring and analysis of global liquidity flows - an important determinant of asset prices, from currencies through to bonds, equities and real estate.

CrossBorder Capital implements its investment strategy and currently manages over US$ 350m.


Cross Asset Strategy

<ul>
<li>A new currency regime in Asia?</li>
<li>Wildly inaccurate media reports wrongly suggest large-scale capital outflows from EM</li>
<li>Rather EM enjoying best forex reserve growth for a decade</li>
<li>
<em>De facto</em> Asian Currency Unit, a ‘Euro-like’ policy, allowing monetization</li>
<li>Loose US fiscal and monetary policies are more likely to spill-over into EM</li>
</ul>


A new currency regime in Asia?
Wildly inaccurate media reports wrongly suggest large-scale capital outflows from EM
Rather EM enjoying best forex reserve growth for a decade

De facto Asian Currency Unit, a ‘Euro-like’ policy, allowing monetization
Loose US fiscal and monetary policies are more likely to spill-over into EM


Could The New Asian ‘Euro’ Mean A Coming Decade of Outperformance From Emerging Markets?

Singapore

The Singapore dollar is the official currency of the Republic of Singapore. 

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SGD (USDSGD CURNCY)

Smartkarma Webinar | Alpha Bites: Trade Ideas in FX and Rates

On 28 April, 11am SGT, join our webinar with Insight Provider Gautam Jain, who will be going over the process with which he comes up with trade...

Smartkarma Research

USD Buy Levels to Sync with Peak in Risk

Buy DXY 91 to 90.50 overshoot to a align with the SPX top of the rising wedge near 4,180 for a peak in risk. Late April is the ideal timeline for a...

Thomas Schroeder

Alpha Bites: Long Indonesia Rupiah (IDR) Vs Short Singapore Dollar (SGD)

In this week’s Alpha Bites, we recommend going long the Indonesian rupiah (IDR) against the Singapore dollar (SGD) in a beta-neutral ratio.

Gautam Jain, PhD, CFA

Crunch Time for Singapore Dollar and Renminbi

We forecast MAS will leave parameters of Singapore Dollar NEER band unchanged at its policy meeting. NEER could dip temporarily before rebounding....

Olivier Desbarres

Could The New Asian ‘Euro’ Mean A Coming Decade of Outperformance From Emerging Markets?

Asian cross-currency volatility is at its all-time low. A de facto Euro-like unit is forming. This could be hugely bullish for Emerging Markets

Michael J. Howell

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