Smartkarma Daily Briefs

• Welcome to our flagship editorial! Is it the year 2021, 2007 or 1995?
• These historical analogies are often used in sell-side reports, and we are going to jump the bandwagon with a few semi-fishy analogies today.
• I do get some vibes that are reminiscent of melt-up years ahead of crisis years.

• Gold Prices Surge: Gold reaches all-time highs against the US dollar and fiat currencies worldwide, signaling skepticism towards central bank policies.
• Economic Indicators: India maintains strong economic activity despite political uncertainties, while China’s export performance exceeds expectations.
• Corporate Profits and Currency Impact: Japan’s corporate profits fall short of expectations, highlighting vulnerabilities to external factors like currency values.

• Gold price has rallied to new highs, but market cap of US’s biggest gold ETF has shrunk
• Push higher driven by quick money inflows, fundamental/ETF inflows, safe haven bid, technical drivers, FOMO
• Physical demand from central banks and Chinese retail buyers has been strong, but recent rally seems driven by financial quick money inflows

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• The yen has been the worst performing currency this year, but has been trading in a tight range around 150 against the dollar.
• Recent developments suggest the Bank of Japan may make policy changes in March or April, possibly exiting negative rates.
• Market may be getting ahead of itself with expectations for a hawkish shift from the BOJ, potentially leading to short-lived movements in the dollar-yen pair.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The past week saw insights on Sea Ltd (SE US), Grab Holdings (GRAB US), Cisarua Mountain Dairy (CMRY IJ), AMMB Holdings (AMM MK), and Sheng Siong (SSG SP).
• There were also macro insights on Malaysia, Thailand, and the Philippines, a sector insight on Malaysian Banks, and a credit insight on Delta Dunia Makmur (DOID IJ).
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.

• China is mobilizing the entire nation to achieve the critical technological advancements it needs as the country faces increasing blockades by the United States and allies. 
• The semiconductor industry is the most glaring example of how the battle for intellectual property rights leads to deglobalization.
• On a macro level, splitting global supply chains into local ones, whether through political intervention or not, will likely lead to higher prices.

• China set a growth target of “around 5%” for 2024, according to the “Government Work Report” released Tuesday as part of the opening of the National People’s Congress annual meeting.

• Last year China’s economy grew by 5.2%, matching the official target of around 5%.

• China set a deficit-to-GDP ratio of 3% for the year, down from a rare upward revision to 3.8% late last year from the original 3%.

• When I first started writing for Money Week, I found myself in a slightly awkward position.
• At the time – this was many years ago – editors Merryn Somerset Webb and John Stepek were notably bearish on the UK housing market.
• I think it fair to say they were the masters of doom and gloom, not for entirely unfair reasons (you can guess all the rational drivers they focused on).

• We see US inflation printing at 0.37% MoM in headline terms and 0.26% MoM in core terms.
• That leaves us in line with consensus, but with a bias/tilt towards an 0.1%-points surprise on the low side of consensus.
• The re-acceleration of owners equivalent of rent to levels close to 0.6% in January looked odd, but on a “good day” we should likely expect a reversal to the trend just above 0.4% MoM in February (see chart 1).

• Take aways: Chinese deflation and high USD rates really putting a damper on copper. Interesting divergence in the USD and crude oil. Russia not sticking to its production cuts pledge. The risk/reward in commodities is getting increasingly compelling across the board, but it is early days. Since the beginning of last year when the world had all its chips on the Chinese reopening copper has been range bound between USD 360 and 390.
• In other words copper has almost been as boring as watching paint dry.
• It hasn’t gotten much help either up until now.