Macro

In today’s briefing:

No Signs of Major Dollar Deleveraging, but Fed Policy Conduct and Inflation Backdrop Warrant Caution
How the USD Could Sink the S&P 500
A Battle Royale for Control of the Tape
US Economy Watch: The Recession That Never Came… Or?
Positioning Watch: Energy is not (yet) a consensus
The Weekly Market Monitor – The ECB’s Unreasonable Hike While the UK Falls into Recession

No Signs of Major Dollar Deleveraging, but Fed Policy Conduct and Inflation Backdrop Warrant Caution

By Said Desaque

Foreign banks’ reliance on commercial paper in the US has contributed to a much bigger compression in their net interest margins, contributing to fears that dollar deleveraging could be imminent.
US current account deficits produced large dollar outflows that facilitated offshore funding centres. The end of secular disinflation and arrival of structurally higher interest rates could create gradual dollar deleveraging.
Fed policy conduct is crucial to gradual deleveraging , particularly quantitative tightening’s impact on corporate bond yields. Dollar exchange rate movements in 2023 are inconsistent with major dollar deleveraging.

How the USD Could Sink the S&P 500

The USD has historically been inversely correlated with U.S. equity prices.
A number of risks are appearing to put upward pressure on the USD, namely a differential in fiscal dominance between the U.S. and other economies, and upward pressure on inflation.
The possible reversal of the BoJ’s easy monetary policy, while Yen bullish and Dollar bearish, is bearish for global risk appetite.

A Battle Royale for Control of the Tape

Both the S&P 500 and the NASDAQ 100 are forming wedge formations while testing their 50 dma supports with directional implications on breakouts or breakdowns.
We believe the odds favours the bears and the S&P 500 has unfinished business to the downside.
The index can find support at its August lows at about 4350. Strong secondary support can be found at roughly 4200, which is about the site of the 200 dma.

US Economy Watch: The Recession That Never Came… Or?

We see near-term upside risk to inflation. The labor market is softening in tandem with growth in real wages (rising LCI)
Consumer sentiment is shifting and spending is showing weakening tendencies. A 2024 services payrolls recession has to be the base-case still.
We remain invested in sectors with a high sales relative to employees. The current tightening cycle would be the most expeditious in history not to cause a recession, if the hopes of a soft- / no landing hold true.

Positioning Watch: Energy is not (yet) a consensus

Over the past week we received the monthly Fund Manager survey suggesting that UK and Europe are now (clearly) underweight relative to benchmark allocations, while also China is essentially un-investable according to the survey.
Interestingly, the survey also reveals that managers are still not net/net long Energy relative to benchmarks, which is an interesting observation given the performance in that sector in recent months.
With energy outperforming indices, higher rates typically follow as well.

The Weekly Market Monitor – The ECB’s Unreasonable Hike While the UK Falls into Recession

The awkward and conflicting statement of the ECB accompanying the tenth and likely final rate increase.
Chinese credit growth remains tepid at best, signaling downside risks for equities and the Euro.
Three ugly UK recession charts this week will put additional pressure on the British Pound. And our Fear & Frenzy is agonizingly close to Frenzy territory, triggering a sell signal.

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Sep 16

Daily Brief Macro: Saudi Arabia Is Now in Charge of the Federal Reserve and more

In today’s briefing:

Saudi Arabia Is Now in Charge of the Federal Reserve
CX Daily: Chinese NEV Industry Hits Back at EU Anti-Subsidy Probe
Portfolio Watch: Any juice left in the anti-Europe bet?
Asian Economics: US to Be a Driver of Asian Growth Despite Cyclical Headwinds

Saudi Arabia Is Now in Charge of the Federal Reserve

US headline inflation disappointed. But the underlying CPI data is less concerning than the headline inflation rate suggests.
This means another Fed rate hike is now de facto dependent on oil prices and Saudi Arabia. Not where you want to be as Chairman of the Federal Reserve.
Historically, stocks perform well following a peak in inflation, but historical performance has been entirely priced in with a return of almost 18% since last year’s peak.

CX Daily: Chinese NEV Industry Hits Back at EU Anti-Subsidy Probe

NEVs /: Chinese NEV industry hits back at EU anti-subsidy probe
China-Venezuela /: China and Venezuela agree to upgrade official status
Property /Charts of the Day: China’s latest policy support boosts home sales, but briefly

Portfolio Watch: Any juice left in the anti-Europe bet?

Welcome to our weekly portfolio watch! In this piece, we look at the developments in our portfolio and try to assess the risk/reward in current markets.
Earlier this week, we received the monthly fund manager survey, and it seems like Energy remains underweight relative to benchmarks despite the recent performance.
Managers are also underweight equities in both Europe and the UK relative to benchmark allocations, while they also expect the Chinese economy to weaken further.

Asian Economics: US to Be a Driver of Asian Growth Despite Cyclical Headwinds

For all the talk of China’s growing footprint in the world economy, what the US does matters for the region, perhaps now more than ever.
Secular forces, industrial policy, and shifts in global supply chains mean that investments are holding up admirably despite aggressive monetary tightening.
Washington’s geopolitical strategy of countering China’s influence also brings economic upsides for the region via trade, investments, and technology transfers.

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Sep 15

Daily Brief Macro: EM by EM #21 Why China is uninvestable yet tough to short and more

In today’s briefing:

EM by EM #21 Why China is uninvestable yet tough to short
EUR watch: Why the ECB outlook is 100% off in 4 charts
Comment on Exchange Rate EUR/USD – August 4, 2023
PPI Nugget: New Pressures On Producer Prices To Come?
CX Daily: The Slow-Burning Insurance Crisis Unfolding in the Shadows
ECB Poses a Probable Peak After Hike

EM by EM #21 Why China is uninvestable yet tough to short

Key points upfront:The USDCNY tourist trade is no longer a quick and easy source of profit, as the PBoC aims to discourage speculative activities by letting speculators bleed.
Despite facing challenges related to structural growth and domestic fragility, the CCP remains committed to safeguarding its export sector, even if it means sacrificing consumption and local government investments.
We expect ongoing depreciation, albeit at a rate that aligns with the PBoC’s tolerance.

EUR watch: Why the ECB outlook is 100% off in 4 charts

By VRS (Valuation & Research Specialists)

The ECB hiked as we anticipated and the EUR weakened materially alongside a dovish re-pricing of EUR rates.
Smack dab at our forecast and positioning, but is the ECB outlook fair at this point?
We find the updated staff projections amusing to say the least and hence also struggle to understand current market pricing of the ECB relative to peers.

Comment on Exchange Rate EUR/USD – August 4, 2023

During the period under consideration, i.e. July 3rd – August 4th, 2023, the EUR/USD exchange rate was moving upwards until July 17th, 2023, but thereafter it followed a downward trend.
However at the start of August, the Euro notched an uplift and was still trading higher than the levels in beginning of July.
According to Graph 1, during the first twelve trading days of the period under consideration, the pair was fluctuating along the range 1.085-1.125.

PPI Nugget: New Pressures On Producer Prices To Come?

Energy is the main culprit behind the reacceleration but it is also starting to spill-over the various broader goods categories.
The cyclical inflation pressure is back in the US before the inflation reaches its target.
It will be tricky for the Fed to get CPI/PCE back to 2% with these cyclical trends.

CX Daily: The Slow-Burning Insurance Crisis Unfolding in the Shadows

Insurers /In Depth: The slow-burning insurance crisis unfolding in the shadows
Tax /: China’s nationwide property tax plan set for further delay
Housing /: Beijing district scraps price limits on pre-owned homes

ECB Poses a Probable Peak After Hike

By Phil Rush

The ECB responded to the persistent overshoot of headline inflation with another 25bp rate hike, contrary to the consensus, and indicated this is likely the peak policy rate.
Monetary policy will remain data-dependent, but the focus is increasingly shifting to how long rates stay at the peak before being cut. We expect a year on hold.
Leaning into a final rate hike raises peer pressure on the Fed and the BoE. The BoE has an inflation expectations issue to conquer, so it’s appropriate to go further.

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Sep 14

Daily Brief Macro: US CPI Review – 10% increase in Energy Inflation! and more

In today’s briefing:

US CPI Review – 10% increase in Energy Inflation!
EUR Watch – The ECB will soon reveal their true inflation vs growth preferences
The Growing Central Bank Dilemma and the FX Trade that Goes with It

US CPI Review – 10% increase in Energy Inflation!

What a report that just dumped in our inbox.
Both core and headline surprise on the upside of expectations MoM, with headline increasing from 3.2% YoY to 3.7%, while core comes in at 4.3% YoY vs 4.7% previously – the era of rising headline inflation and falling core inflation is here.
The change is mostly driven by a HUUGE rebound in Energy inflation, coming in at 5.58% MoM vs 0.11% in July, with Gasoline prices up 10.5% since last month.

EUR Watch – The ECB will soon reveal their true inflation vs growth preferences

The ECB is likely going to hike tomorrow and even after the repricing this morning, we still see risk/reward favoring a bet on a hike.
With the inflation forecast likely being hawked up (as per sources in Reuters), we see a very high probability that the ECB will react to the hawkish adjustment of staff projections with a hike and continued hawkish messaging.
If the ECB raises the inflation profile to >3% territory in Q4-2023 and Q4-2024, that would constitute a >0.3%-points increase in the profile, which will most certainly have to be followed up by policy action.

The Growing Central Bank Dilemma and the FX Trade that Goes with It

The most recent UK wage growth figures are a big disappointment for Bank of England Governor Bailey and his colleagues.
The Bank of England must choose between battling inflation or anticipating a recession with GDP growth and employment dwindling.
Sooner and deeper rate cuts in the UK compared to the US is what likely takes down the GBPUSD exchange rate further.

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Sep 13

Daily Brief Macro: Global Liquidity: Where Are We In The Cycle? and more

In today’s briefing:

Global Liquidity: Where Are We In The Cycle?
Manufacturing Nugget: The Inflation Refueling Act?
CX Daily: Chinese Battery Makers Gird For Price War In Competition To Supply EV Producers
Inflation Watch: A bottom above 2%? 10 charts on USD inflation
The Great Game – Who’s more powerful, Joe Biden or Kim Kardashian?
UK: Cycle Burn-Out Partly Seasonal
The Energy Cable #37 – The good old fossil fuels are back in business

Global Liquidity: Where Are We In The Cycle?

By Michael J. Howell

Everything is bottoming! Global Liquidity, stock markets, bond term premia, the World economy and even inflation pressures
We remain upbeat towards risk assets , but must acknowledge that the big gains are likely over for a while given gathering duration tensions in bond markets
The Global Liquidity cycle and asset allocation are unfolding on track in 2023. It is leading the World economy and currently sit in its Rebound investment phase

Manufacturing Nugget: The Inflation Refueling Act?

The combination of the IRA and CSA makes up the largest investment in rural US electrification since 1936, and the most notable effect has been in construction spending within the manufacturing sector.
Favorable terms, hereunder significant tax credits, have drawn investments like moths to a flame.
Manufacturing construction is currently up some 70% YoY – Tailwinds for our cyclically tilted portfolio.

CX Daily: Chinese Battery Makers Gird For Price War In Competition To Supply EV Producers

Batteries /Cover Story: Chinese battery makers gird for price war in competition to supply EV producers
G20 /: Chinese premier meets Biden at G20
China-U.K. /: U.K. welcomes China investment in ‘key areas,’ trade minister says

Inflation Watch: A bottom above 2%? 10 charts on USD inflation

Welcome to our inflation watch ahead of the all-important US CPI report on Wednesday.
Before showing our charts and models, we’d like to present you with our key take-aways up front
Headline/energy inflation will continue to accelerate and likely to a higher degree than priced in

The Great Game – Who’s more powerful, Joe Biden or Kim Kardashian?

By Mikkel Rosenvold

Welcome to this week’s Great Game! Now, I know that we have been quite critical of the U.S. Administration and Joe Biden in particular.
While it’s still fair to have some concerns about the well-being of the Commander-in-Chief, I think it’s time to heap some praise on his team and administration for their foreign policy work over the past months.
This week was particularly bright for U.S. interests – let’s go over events one by one – and finish up with how Kim Kardashian might be the most popular woman in Iran!

UK: Cycle Burn-Out Partly Seasonal

By Phil Rush

The UK unemployment rate rose as expected by another 0.1pp in July to 4.3%. This slackening trend may slow soon, having been exaggerated by residual seasonality.
Labour demand remains elevated, but there are early signs that it is waning enough to trim wage settlements, consistent with the cycle burning out.
Wage growth isn’t remotely consistent with the inflation target, so the BoE should keep hiking. However, it could stop in November if settlements definitively break lower.

The Energy Cable #37 – The good old fossil fuels are back in business

Welcome back to the Energy Cable, where we always try to be concise and concrete about what’s going on in the energy space.
The last couple of weeks have presented us with what might be a new energy bull run, as markets liked the message from the Saudis amidst a global economy that is in far better shape than feared.
So how’s the outlook?

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Sep 12

Daily Brief Macro: The Week That Was in ASEAN@Smarkarma – Sea Ltd & TikTok’s Trouble and more

In today’s briefing:

The Week That Was in ASEAN@Smarkarma – Sea Ltd & TikTok’s Trouble, Astra Building EVs, and AKRA.
Data Dependent Financial Markets Risk Losing Sight of Bigger Issues
Pasta & Economic Activity
Conclusion on Services Week: Our Take on Equities and the Labor Market
Steno Signals #64 – The one on ESG-flation, oil and other tangibles
CX Daily: Public Security Penalty Expansion Risks ‘Abuse Of Power,’ Legal Experts Say
Malaysia Economics: As Winds Blow in Malaysia’s Favour, Gov’t Sets Out Policy Vision

The Week That Was in ASEAN@Smarkarma – Sea Ltd & TikTok’s Trouble, Astra Building EVs, and AKRA.

By Angus Mackintosh

The Past week saw insights on Sea (SE US), Astra International (ASII IJ), AKR Corporindo (AKRA IJ), VNG (VinaGame) (VNG US) IPO, and Metro Pacific Investments Co (MPI PM).
There were also insights on Vietnam’s latest index rebalance together with Singapore’s macro and politics plus an update on ASEAN Fintech Unicorns.
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 South-East Asia.

Data Dependent Financial Markets Risk Losing Sight of Bigger Issues

By Said Desaque

Financial markets and central banks are addicted to data dependency, but they both risk losing sight of bigger structural issues that could have greater consequences for investors .
Economic outlooks vary on a cross-border basis, but the mainstream financial media have become obsessed with China’s real estate issues and, consequently, pushed for Western-style stimulus.
The narrative about China’s outlook is overly-pessimistic. Sino-US relations will be impacted by Taiwan’s Presidential Election in January. Arguably, bad outcomes in Asia remain the biggest undiscounted risks for investors.

Pasta & Economic Activity

By Thomas Lam

While financial stability considerations have become more prevalent, financial conditions are not easy to define and measure
Broad measures of financial and financial market conditions, like pasta, come in many different shapes and sizes
I harness my Financial Market Conditions Index to tease out the likely imprint on the US economy

Conclusion on Services Week: Our Take on Equities and the Labor Market

Welcome back to another piece in our Services Week, where we have a look at what the development in services and manufacturing PMIs might mean for markets, and give you our take on where we are heading, as well as where low-hanging fruits are.
Today we have made our way to equity markets, which in their current state look to have a hard time figuring out in which direction they are heading.
The start of a weakening of the labor market had markets rallying, while stronger-than-expected PMIs and unit labor costs pushed the market in the other direction.

Steno Signals #64 – The one on ESG-flation, oil and other tangibles

Welcome to our weekly flagship editorial.
Remember that you can always follow our portfolio live right here.
As per usual, this is where you will get the unbiased and uncensored macro strategy that will hopefully allow you to make profitable investment decisions going forward.

CX Daily: Public Security Penalty Expansion Risks ‘Abuse Of Power,’ Legal Experts Say

Law /: Public security penalty expansion risks ‘abuse of power,’ legal experts say
China-ASEAN /: China wants an East Asia supply chain ‘matchmaking conference’ next year
Hydrogen /Analysis: China’s largest green hydrogen mega project hints at vast potential

Malaysia Economics: As Winds Blow in Malaysia’s Favour, Gov’t Sets Out Policy Vision

Malaysia’s government has released a slate of key policy documents that outline its strategy to overcome the middle-income trap and create renewed growth momentum.
The Madani Economic Narrative integrates top-down improvements in economic competitiveness and bottom-up measures in social policy. Other documents on industrial policy and energy transition show welcome ambitions.
Early successes in attracting investments are potent building blocks for follow-on action by the government and businesses. A renewed momentum for growth is on the horizon.

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Sep 11

Daily Brief Macro: Investing in an Era of Fiscal Dominance and more

In today’s briefing:

Investing in an Era of Fiscal Dominance
Tripwires to a Deeper Correction
Positioning Watch: The USD Wrecking Ball & Oil’s Roaring Rally
Portfolio Watch: Anyone still in doubt of the US superiority?
Supply Tightness, Robust Demand Could Push Crude Oil Prices Into Triple Digit Territory
To Hike or Not Hike? ECB Doves and Hawks to Delicately Balance Between a Rock and Hard Place.

Investing in an Era of Fiscal Dominance

The Big Idea at Jackson Hole in 2023 is fiscal dominance or the problem of big government deficits and skyrocketing debt around the world.
Governments will have less fiscal room to deal with the next crisis and monetary policy will have to step in to do more of the heavy lifting.
For investors, risk estimates based on historical data may no longer be applicable in a Fiscal Dominance regime characterized by heightened cross-asset volatility in the next crisis.

Tripwires to a Deeper Correction

While our base-case scenario calls for an S&P 500 bottom at about 4350, we nevertheless have to allow for the possibility of a deeper correction.
It could be argued that a lack of extreme fear and oversold conditions opens the door to further downside risk.
We would prefer to see relative support broken on either megacap growth or small caps and monitor how market psychology evolves.

Positioning Watch: The USD Wrecking Ball & Oil’s Roaring Rally

In a week where the USD is celebrating its longest rally streak in 9 years with 8 consecutive weeks of outperforming currency peers, it’s noteworthy how both commodities have remained resilient and energy managed to rally
Not only does this reinforce our US bull case, but it also lends support to my recent bearish stance on emerging markets
US imports being down some 5% on a YoY basis for Q2 is not exactly helping struggling players here either.

Portfolio Watch: Anyone still in doubt of the US superiority?

Avid readers of our research have likely noted how we have mentioned the US macro superiority to the Euro area in right about every single article this week.
ISM Services rebounded (in sharp contrast to consensus), while Services declined faster than feared in core countries in Europe.
It takes a very stubborn Chinese, German or Frenchman to argue that the US is not in the driver’s seat of economic growth globally, but has the market turned long US bets into the consensus position?

Supply Tightness, Robust Demand Could Push Crude Oil Prices Into Triple Digit Territory

By Srinidhi Raghavendra

Oil majors to extend voluntary production cuts with an eye to pushing crude oil prices to $100/barrel.
Demand for oil at record highs, fueled by strong travel, increased oil usage in power production & solid Chinese petrochemicals activity.
Refiners are reaping near-record profits as their throughputs are set to reach a summer peak of 83.9m bpd in August.

To Hike or Not Hike? ECB Doves and Hawks to Delicately Balance Between a Rock and Hard Place.

By Srinidhi Raghavendra

Under 12 months, the ECB has lifted interest rates, an unprecedented nine times from minus 0.5% to +3.75% to combat surging inflation.
Ahead ECB meeting on 14/Sep, surveys show an almost even split between those anticipating a tenth sequential hike and a “hawkish pause”.
ECB is data dependant. But the data is sending mixed signals. Will the ECB hike to fight stagflation risk or resort to a hawkish pause?

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Sep 09

Daily Brief Macro: Out of the Box #18: Time for the Second Inflation Wave? AAAAAAH! and more

In today’s briefing:

Out of the Box #18: Time for the Second Inflation Wave? AAAAAAH!
EM by EM #20 Another energy squeeze in the cards?
Services Nugget: How Do the Central Banks React?
The Weekly Market Monitor – Valuation Woes and Currency Moves

Out of the Box #18: Time for the Second Inflation Wave? AAAAAAH!

In our Out of the Box series we aim at addressing emerging topics before they turn into consensus narratives to be ahead of the curve in price action.
The below chart made the rounds lately as energy prices have started increasing again due to the tight supply side caused by the Saudi Arabians and Russians.
We admit that the study comparing the 1970s to today is mostly esoteric, but we have ourselves pondered whether inflation dynamics could return in a second wave.

EM by EM #20 Another energy squeeze in the cards?

In our analysis last week, we delved into the situation in Turkey and arrived at the following conclusion: The capable technocratic approach is more likely to succeed than the resurgence of economic populism.
However, what currently deters us from fully engaging in this trade is the potential for inflationary pressures to escalate due to the harsh impact of energy price fluctuations, which can be particularly unforgiving for net-importing economies like Turkey.
That seems to have aged fairly well as Turkey’s CPI has since printed above expectations and Oil and Energy has continued its tear on the back of the Saudi production cut.

Services Nugget: How Do the Central Banks React?

Takeaways: Divergence between Fed and ISM sentiment. OPEC cuts and manufacturing bullish oil?
More ground to cover for Powell to be reflected in USD strength
We have built a sentiment tracker that uses FOMC minutes and speeches of Fed members as data and assigns positive and negative scores to adjectives in order to gauge what the Fed’s sentiment on the economy is.

The Weekly Market Monitor – Valuation Woes and Currency Moves

Why did the seemingly marginally negative Apple news coming from China erase a whopping USD 200 billion in market cap?
It seems like the US labor market has wrongfooted investors again, judging from the latest ISM Services and claims data.
The Chinese Yuan has also rejoined its downward trend after a brief revival, and this does not bode well for equities.

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Sep 08

Daily Brief Macro: BOJ’s Looser for Longer Stance Risks Pushing Yen To 155/USD and more

In today’s briefing:

BOJ’s Looser for Longer Stance Risks Pushing Yen To 155/USD
Commodities Are Surprising, but Not in the Way You Think
CX Daily: Low-Carbon Transition Has China’s Shipbuilders Seeing Green
India: Robust Economic Momentum Despite Some Seeming Fiscal Deterioration
UK Critical Inferences Extend into 2025

BOJ’s Looser for Longer Stance Risks Pushing Yen To 155/USD

By Pranay Yadav

US jobs data last week hints at a slowdown. But is it slow enough for the Fed to trust that they have done enough to bring inflation under control?
Japan is at the cusp of exiting decades of deflation. Despite CPI >2% target, BoJ fears that it is premature to declare victory.
BOJ’s looser-for-longer stance v/s Fed’s higher-for-longer policy divergence risks tipping the Yen 155 to the dollar.

Commodities Are Surprising, but Not in the Way You Think

Our analysis of commodity returns surrounding recessions reveals that commodity prices typically do NOT decline in the run-up to a recession.
This is also the case once the recession starts, even though the historical results are mixed.
Interestingly, recent commodity price development diverges significantly from historical patterns, raising the question if there will a recession at all.

CX Daily: Low-Carbon Transition Has China’s Shipbuilders Seeing Green

Shipbuilding /In Depth: Low-carbon transition has China’s shipbuilders seeing green
Luxury /: China’s appetite for luxury is back
Corruption /: Former top Xiamen legislator sentenced to life in prison

India: Robust Economic Momentum Despite Some Seeming Fiscal Deterioration

By Prasenjit K. Basu

India remains the fastest-growing large economy, with RGDP accelerating to 7.8% YoY growth in Q1FY24. Services (53% of the economy) grew 10.3%YoY, and should enable 7%+ RGDP growth for FY24.
Fixed investment spending grew 8%YoY, the fifth consecutive quarter of 8% or more growth. The improbably large real net export deficit will likely lead to upward revisions to GDP.
The fiscal deficit in Apr-Jul’23 was 33.9% of the FY24 target, even with a massive 54%YoY increase in revenues assigned to states. Latter will shrink in H2FY24, cutting fiscal deficit.

UK Critical Inferences Extend into 2025

By Phil Rush

Assumptions around productivity, the NAWRU, inflation expectations, pent-up inflation, and the effective neutral interest rate dominate medium-term forecasts.
We see little excess demand either outside of employment or in productivity, with elevated inflation expectations responsible for high wage and price pressures instead.
Modest changes in excess demand indicate policy is only a little tight. The effective neutral rate may temporarily go above 5%, capping cuts to a level with a 4-handle.

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Sep 07

Daily Brief Macro: Singapore Politics: Don’t Be Misled by Tharman’s Landslide in Presidential Poll and more

In today’s briefing:

Singapore Politics: Don’t Be Misled by Tharman’s Landslide in Presidential Poll
ASEAN Economics: A Shot in the Arm for Singapore-Johor Integration?
5 Things We Watch – ISM, Energy, German manufacturing, US labor market, Global Rates
CX Daily: Beijing Passes Law Allowing Foreign States To Be Sued In China
Services Week: What to Buy if Manufacturing Rebounds While Services Weaken?
Out of the Box #17 How would US exceptionalism flip the table for the RoW?

Singapore Politics: Don’t Be Misled by Tharman’s Landslide in Presidential Poll

Tharman Shanmugaratnam’s landslide win in Singapore’s presidential election was largely an affirmation of his personal appeal, rather than voter support of the government.
While voters prioritized the candidates’ qualities for the presidency in this election, this does not mean grouses over political trends or economic troubles have been forgotten.
The new presidency is part of a broader political transition, as deputy premier Lawrence Wong is positioned for the top job. He ultimately faces a more demanding electorate.

ASEAN Economics: A Shot in the Arm for Singapore-Johor Integration?

Moves are underway by the Malaysian and Singaporean governments to improve economic integration between the city-state and Malaysia’s southernmost Johor state.
Economic challenges on both sides are prompting governments to reconsider Johor’s Iskandar Development Region which had been designed to integrate with Singapore.
Closer integration could be transformational for both sides but it still hinges on sufficient political will and policy creativity to overcome the obstacles.

5 Things We Watch – ISM, Energy, German manufacturing, US labor market, Global Rates

Happy Wednesday, and welcome back to our weekly edition of 5 Things We Watch, where we take you through the 5 things that we are keeping an eye on in the global macro landscape currently.
We are in the middle of our services week, where we address what will happen in asset markets if services keep weakening, and if manufacturing rebounds simultaneously.
Follow along to get a sneak peak of what we are doing in the services week, as well as the other things that are going on in global macro currently.

CX Daily: Beijing Passes Law Allowing Foreign States To Be Sued In China

Law /: Beijing passes law allowing foreign states to be sued in China
Private /: China creates new agency to support private sector
PMI /: Growth in China services sector slows as exports shrink, Caixin PMI shows

Services Week: What to Buy if Manufacturing Rebounds While Services Weaken?

This week’s theme is the weakening in the services sector amidst manufacturing potentially looking to rebound.
We aim to cover all asset classes, what to buy, what to sell, and what to expect next in the months to come when it comes to both US and global PMI’s.
Today’s services PMI’s from the EZ showed further signs of the European services sector weakening, with both Spain and Italy surprising to the downside of expectations of a >50 reading.

Out of the Box #17 How would US exceptionalism flip the table for the RoW?