Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

REAL-Economics.com

Macroeconomics

Fed chair Jeremy Powell indicated that full employment is "in the low 4s", inflation is going to get to 2% quite smoothly, and the economy was stronger than he believed it was in December (at the time of the last rate hike). The dot plots at the 21st March FOMC are going to be closely watched, but as of now Powell is an unambiguous hawk on rates. Bad for bonds, good for the US dollar, and bad for EMs (unless he changes his mind when speaking to the Senate on Thursday!).Republican Jeb Hensarling…

Fed chair Jeremy Powell indicated that full employment is "in the low 4s", inflation is going to get to 2% quite smoothly, and the economy was stronger than he believed it was in December (at the time of the last rate hike). The dot plots at the 21st March FOMC are going to be closely watched, but as of now Powell is an unambiguous hawk on rates. Bad for bonds, good for the US dollar, and bad for EMs (unless he changes his mind when speaking to the Senate on Thursday!).Republican Jeb Hensarling…

Unambiguously Hawkish Powell to Trigger Higher Yields and a Stronger Dollar

Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

Technical Analysis

... the Dollar Index is, nevertheless, close to ending a 5-wave decline from the 2017 high, and the weekly momentum indicators lie not far above oversold, with bullish divergence forming.  We don't think the decline is quite complete for two reasons:<ul>
<li>all of the daily momentum indicators made new lows in line with DXY at the late-January low, signalling that further lows are more-likely-than-not </li>
<li>that fits with the short-term wave count, which is missing a minor 5th wave.  </li>
</ul>We are therefore still…

... the Dollar Index is, nevertheless, close to ending a 5-wave decline from the 2017 high, and the weekly momentum indicators lie not far above oversold, with bullish divergence forming.  We don't think the decline is quite complete for two reasons:
all of the daily momentum indicators made new lows in line with DXY at the late-January low, signalling that further lows are more-likely-than-not 
that fits with the short-term wave count, which is missing a minor 5th wave.  
We are therefore still…

US Dollar: Final DXY Low Still Lies Ahead, but ...

Multi-asset Macro/Emerging Markets Strategist

Virgil Fernandez Esguerra

Thematic (Sector/Industry)

<div class="content-highlight">
Executive summary: Our guide to this week’s global macro risk events and trading opportunities. 
<ul>
<li>
Trade ideas: We position for a policy-driven RMB depreciation by going long SGD-CNH. We take profit on long VIX but stay short 10-year USTs. We add long AUD-NZD, short Indian equities, long EUR-GBP to our watchlist. We may short the Philippine peso if the BSP keeps rates on hold.</li>
<li>
Monday: Composite PMIs, Turkey CPI, Indonesia GDP and the Korea High Court's ruling on Samsung heir Jay Y. Lee</li>
<li>
Tuesday…</li>
</ul>
</div>


Executive summary: Our guide to this week’s global macro risk events and trading opportunities. 


Trade ideas: We position for a policy-driven RMB depreciation by going long SGD-CNH. We take profit on long VIX but stay short 10-year USTs. We add long AUD-NZD, short Indian equities, long EUR-GBP to our watchlist. We may short the Philippine peso if the BSP keeps rates on hold.

Monday: Composite PMIs, Turkey CPI, Indonesia GDP and the Korea High Court's ruling on Samsung heir Jay Y. Lee

Tuesday…



Week Ahead in Global Macro: US Stopgap #5, UST Auctions, RBA, RBNZ, BOE, China Trade, Phils. BSP

Economist

Richard Iley

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/043/154/original/Screen%20Shot%202018-01-29%20at%208.30.30%20AM.png?1517176854" class="editor-image img-responsive" data-smartkarma-image-id="43154"></figure><div class="content-highlight">
At 2.6% q/q SAAR,<a href="https://www.bea.gov/newsreleases/national/gdp/2018/pdf/gdp4q17_adv.pdf" target="_blank"> the advance estimate of US Q4 GDP</a> was superficially disappointing but the more the data are dug into, the better they look. Private-sector domestic demand (what maters most for equities) in fact surged on some measures at its fastest pace in over a decade. Booming domestic demand sucking in imports at close to their fastest pace in a decade was the dominant factor crimping headline growth. 
The key metric to focus on in the GDP report is final sales to private domestic…
</div>


At 2.6% q/q SAAR, the advance estimate of US Q4 GDP was superficially disappointing but the more the data are dug into, the better they look. Private-sector domestic demand (what maters most for equities) in fact surged on some measures at its fastest pace in over a decade. Booming domestic demand sucking in imports at close to their fastest pace in a decade was the dominant factor crimping headline growth. 
The key metric to focus on in the GDP report is final sales to private domestic…


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. 

DXY bear call from 101 is nearing our macro target at 88.50 where we see at least an intermediate rally cycle unfolding. DXY roadmap is outlined. Any USD rise is unlikely to provide major headwinds for EM equities until we clear the 92 handle.Macro Euro cycle peak target outlined in the weekly chart.Top bets to front run a DXY low are seen in TRY, BRL, AUD and GBP. We are taking off our USD/SGD short within our Asian transition scenario.USD downside looks limited as down trends in Asia lose bear momentum/conviction as bull divergence takes shape. Can weaker Asian FX turn ahead or a DXY low? The Peso is leading the USD bull turn making the SGD more vulnerable. Korea's Won chart decline is maturing. MYR and CNH long vs the dollar still have more gas.A domino USD bottoming cycle is due in February with a backfill and re test touted into March which should complete an intermediate equity peak, commodity peak and USD low.

DXY bear call from 101 is nearing our macro target at 88.50 where we see at least an intermediate rally cycle unfolding. DXY roadmap is outlined. Any USD rise is unlikely to provide major headwinds for EM equities until we clear the 92 handle.Macro Euro cycle peak target outlined in the weekly chart.Top bets to front run a DXY low are seen in TRY, BRL, AUD and GBP. We are taking off our USD/SGD short within our Asian transition scenario.USD downside looks limited as down trends in Asia lose bear momentum/conviction as bull divergence takes shape. Can weaker Asian FX turn ahead or a DXY low? The Peso is leading the USD bull turn making the SGD more vulnerable. Korea's Won chart decline is maturing. MYR and CNH long vs the dollar still have more gas.A domino USD bottoming cycle is due in February with a backfill and re test touted into March which should complete an intermediate equity peak, commodity peak and USD low.

United States

The U.S. Dollar Index(USDX) indicates the general int'l value of the USD. The USDX does this by averaging the exchange rates between the USD and major world currencies. The ICE US computes this by using the rates supplied by some 500 banks. FOR REAL TIME SEE EIS ICEA<GO>.

Price Gauge
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Dollar Index (DXY CURNCY)

Unambiguously Hawkish Powell to Trigger Higher Yields and a Stronger Dollar

Fed chair Jeremy Powell indicated that full employment is "in the low 4s", inflation is going to get to 2% quite smoothly, and the economy was...

Prasenjit K. Basu

US Dollar: Final DXY Low Still Lies Ahead, but ...

... the Dollar Index is, nevertheless, close to ending a 5-wave decline from the 2017 high, and the weekly momentum indicators lie not far above...

Peter Beuttell

Week Ahead in Global Macro: US Stopgap #5, UST Auctions, RBA, RBNZ, BOE, China Trade, Phils. BSP

Executive summary: Our guide to this week’s global macro risk events and trading opportunities. Trade ideas: We position for a policy-driven...

Virgil Fernandez Esguerra

Chart of the Day: What Lies Beneath

At 2.6% q/q SAAR, the advance estimate of US Q4 GDP was superficially disappointing but the more the data are dug into, the better they look....

Richard Iley

USD Short to Long Transition Cycle

DXY bear call from 101 is nearing our macro target at 88.50 where we see at least an intermediate rally cycle unfolding. DXY roadmap is outlined....

Thomas Schroeder

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