Smartkarma Daily Briefs

• We look at the key annual macro-property data for 2011-2023 and review the past ‘group forecasts’ for new home sales in China in 2023 and 2022
• The views in 2023 proved more in line with the actual than in 2022 but NBS revisions to 2022 new home sales data (Mar-Dec) add some complications
• You can join this year’s ‘draw the line’ for new home sales, part of Real Estate Foresight’s 12th Annual China Property Outlook

• Welcome to our PMI Watch where we look at the odds of betting on a rebound in the most followed growth gauge.
• Before addressing the S&P PMI numbers released for January on Wednesday (and the ISMs later this month), we’d like to point you in the direction of the seasonality adjustment issues still facing the statistical bureaus.
• January 2023 was a month of records in seasonal adjustments due to the outlier filter of 2021/2022 wreaking havoc with typical X13-ARIMA-SEATS models.

• Like we mentioned in the first positioning watch of the year, holders of risk-assets have entered a slightly more cautious stance, and the classic risk aversion dynamics seem to be back as inflation expectations have been on the rise yet again since December.
• The Fed now find themselves at an interesting crossroads as the inflation battle may turn out more difficult than anticipated, but the gifts have already been handed out, and markets are again pricing the Fed to be the most dovish central bank in 2024 (mispricing of central banks are apparently a market speciality).
• The chart below is also a clear proof of the market’s inability to be forward-looking.

• Markets raced to 52-week highs across US equity benchmarks with rally in tech stocks contributing to much of these gains. Nikkei raced to print another 34-year high.
• Oil & Copper ticked higher while other major commodities trended downwards last week. Beans and Corn marked their lowest price prints over the last 52-weeks.
• Life is too short to be spent writing for an echo chamber and rewriting to meet the often arbitrary demands of a reviewer, writes Dr Damodaran.

• The Past Week saw insights on Lendlease Global Commercial REIT, Berli Jucker (BJC TB), AEM (AEM SP), Airports of Thailand (AOT TB), and the upcoming Citicore Renewable Energy IPO.
• There was also macro insight on the new joint Singapore & Malaysia Special Economic Zone in Johor and an insight on the STTF rebalancing in Singapore. 
• 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.

• The market is pricing in a 25 basis point cut in the June meeting, with additional easing expected to reach a neutral level by the first half of 2025.
• The ECB is expected to remain on hold at the upcoming meeting, with the focus on their updated views on growth, inflation, and any forward guidance.
• The sell-off in recent weeks has been driven by the repricing of monetary easing expectations, but the strategic over duration stance remains comfortable, particularly in the medium term.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• In a soft-landing economic environment, history suggests that commodity indexes stay stable around the first rate cut then trend higher six months after.
• Historically, industrial metals tend to lag energy by several months.
• By contrast, prices of precious metals, especially gold, generally rise six months after the first rate cut then hit a temporary plateau —something we saw even during the extremes of the 2008 financial crisis and the recent pandemic. 

• The market is pricing in aggressive rate cuts by the Fed, but the data does not fully support this expectation.
• The dollar has performed well this week, and further upside is plausible due to low-grade US exceptionalism and underwhelming global economic data.
• The focus on the Fed and US rates is important, but the non-US side should not be overlooked, as there is a stark difference in initial conditions between the US and other G7 rate curves. The rate differentials could lead to a convergence with the US catching up to other rate curves, resulting in a volatile and high-impact dollar trend.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.