Daily Briefs

• Welcome to our monthly flagship asset allocation analysis – the “Macro Regime Indicator”.
• Coming into April, we wrote that “The macro environment is turning worse on both inflation -and liquidity metrics, while the growth variable remains positive (measured by the cyclical manufacturing momentum).
• This leaves us in a classic “QT” environment with less obvious “gung ho” risk taking through April compared to the full-on risk positive environment we have seen over the past 4-5 months as continuously flagged and traded via our allocation tools.”Without the growth parameter being a home-run in our models, we mostly got the April correction right and also capitalized decently well on the liquidity withdrawal and the hot inflation report.

• This week we look at the noise surrounding the entrance of new EV players to Indonesia and suggest that Astra International is well-positioned to face the renewed competition. 
• We also look at CVC’s move on Siloam International Hospitals, Kopi Kenangan’s expansion plans, and Microsoft’s commitment to invest US$1.7bn in the AI space in Indonesia. 
• CrossASEAN Ground Zero is a thematic weekly product that focuses on key Southeast Asian themes and technology trends with a core focus on Indonesia.

• KRX’s monopoly is expected to end next year with the launch of ATS (Alternative Trading System) sometime in 1H 2025 (as early as March) in Korea.
• The company that is responsible for operating the ATS is called Nextrade which was established in November 2022. Nextrade’s ATS received its preliminary approval in July 2023. 
• Korea Exchange has been a money making machine. Although there have been repeated discussions of a potential listing of Korea Exchange in the past decade, this has yet to materialize. 

• US commercial crude oil inventory fell by 1.36 million barrels for the week ending on 3/May, after rising by 7.3 million barrels the week before.
• EIA increased its global liquid fuels production for 2024 and 2025 by 110,000 bpd and 40,000 bpd, respectively.
• EIA forecasts OPEC’s spare production capacity around 4 million bpd through 2025.

• The BoE’s unsurprising decision to maintain the Bank rate at 5.25% was accompanied by rare pushback against prevailing market pricing. MPC members are more dovish.
• June’s outcome will depend on developments in their inflation persistence assessment, including wage settlements where the current data are tracking excessively high.
• That upside seems unlikely to discourage the MPC for long, so we now expect the MPC to start cutting in August but with a pause in February and a risk of a reversal.

• Series of mysterious and unexplained stock market crashes involving major companies like Viacom, Discovery, Tencent, and Baidu
• A little-known family office called Archegos Capital Management led by Bill Hwang is revealed to be the mastermind behind the chaos
• Bill Hwang’s past involvement in hedge fund scandals and illegal activities sheds light on the criminal nature of the implosion of Archegos Capital Management

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

• In the second half of April, headline inflation stood at 0.25% bw.
• In the fourth month of the year, inflation rebounded from 4.42% YoY to 4.65% YoY due to pressures in the prices of some agricultural products and gasoline.
• In contrast, core inflation continued its downward trend, decreasing from 4.55% YoY to 4.37% YoY in April.

• The decision by Bank Negara Malaysia to maintain the OPR at 3.00% aims to balance the need to support economic growth while managing domestic inflation amid complex global economic challenges, including persistent inflation and geopolitical tensions.
• Moderate inflation levels in early 2024 and a positive economic growth outlook underscore the effectiveness of the current monetary policy—however, the policy trajectory links to developments in subsidy and price control measures and global economic conditions.
• The ringgit’s valuation and stabilization are critical concerns for the MPC, influenced by external monetary policies and geopolitical factors, with ongoing strategic interventions to align the currency more closely with Malaysia’s economic fundamentals.

• The anomalous behavior of the unemployment rate bears further monitoring
• The ongoing labor market rebalancing could prospectively result in a higher unemployment rate with a lag
• While the April survey data implies potentially soggy headline growth in 2Q 2024, my weekly recession odds indicator remains relatively benign for now