Macro and Cross Asset Strategy

1. US vs EU: Worse to Come

By Alastair Newton, Heteronomics

• Policymakers and investors are not fully recognizing the threat posed by the US in response to ‘Liberation Day’.
• The threat level has increased as ‘transactional Trump’ is replaced by a new president.
• The new president aims to return the US to a perceived golden era in his mission to ‘make America great again’.

2. Investors Have that “Oh Sh#t Moment” – Part 2:  Trading Opportunities.

By Rikki Malik

• Act 1 of the US bear market is likely complete, with diverging price signals from stocks, bonds and the dollar.
• This will be a rebound bounce to sell into, as we are not going back to previous highs.
• Looking at companies servicing high-income consumers is a good hunting ground for shorts.

3. US Bear Market: THIS TIME IS DIFFERENT!

By David Mudd

• The US dollar and US treasuries are no longer a safe haven in the wake of the US market sell off. 
• Tariffs undercut primary reasons for foreigners to buy and hold US dollar assets, including recycling of export earnings by foreign countries.   Lower consumption and higher inflation are additional headwinds.
• Foreign holdings of US stocks and debt will decline as the US isolates itself from the global trading system.

4. UK: Spillover effects from US tariffs

By Phil Rush, Heteronomics

• The UK output destroyed by reciprocal US tariffs is only partly due to the direct impact of the new 10% rate (worth ~0.2% of GDP) and generally weaker US prospects (0.1%).
• Global GDP growth is depressed by this policy, indirectly destroying demand for UK exports from elsewhere (0.2%), especially if countries harm themselves by retaliating.
• An overall 0.6% GDP hit has two-sided risks and a skew lowered by likely negotiations. Fears of items dumping into the UK market are overblown excuses for protectionism.

5. Trump, Tariffs, and Trade Wars

By Manu Bhaskaran, Centennial Asia Advisors

• President Trump’s radical tariff measures will usher in a new era of greater volatility, slower growth, financial stresses and geopolitical downsides.
• The coming weeks will be marked by uncertainty as the domestic political pushback in the US interacts unpredictably with retaliation by trading partners and the economic fallout. 
• In Asia, monetary easing can mitigate only part of the impact. Fiscal policy is needed but is constrained in most of the region, given pre-existing debt and deficits. 

6. Smart Coffee: 7 April 2025

By Jay Cameron, Vantage Capital Markets Japan

• An interesting day for the market after the announcement of tariffs previous day.
• When analyzing this market move, it may help to look at the countries affected by tariffs in terms of the amount of tariffs (fig. 1, fig 2.). vs the movement on the main indices in that country.
• Many impacted indices are 5% to 10% in the red in April as a result, including the EU indices.

7. A Big Bear, or Just A Plain Vanilla Correction?

By Cam Hui, Pennock Idea Hub

• The latest Trump tariff announcements have sparked a risk-off stampede.
• Even though the macro and fundamental backdrop is deteriorating, sellers are becoming exhausted and a relief rally should materialize in the coming week.
• Both the top-down outlook and technical structure of the stock market argue for a bear market, and any rally should be interpreted as a countertrend move.

8. Steno Signals #192 – A March 2020 style reset. Is this a liquidity event?

By Andreas Steno, Steno Research

• Happy Sunday from Copenhagen, if I am allowed to say that after a horrendous week in markets.
• Markets are heading into a tense week as the U.S.-China trade tensions escalate and Europe appears poised to introduce digital tariffs — likely targeting the Magnificent 7 — in response to Trump’s proposed tariff agenda.
• By late Friday, the U.S. dollar surged sharply, accompanied by early signs of capitulation in traditional safe-haven assets like gold and Treasuries.

9. Crafting Investment Policy in an America First World

By Cam Hui, Pennock Idea Hub

• If Trump succeeds in his America First policy, the new winners will be America’s  suppliers of labour. The obvious loser under Trump’s win-lose worldview will be the suppliers of capital.
• The investment environment in an America First world will be riskier. Expect more sovereign defaults and restructurings.
• The benchmark portfolio under the new regime should be a basket of global assets.

10. UK: GDP Seasonal Surge Before Slowing

By Phil Rush, Heteronomics

• Fundamental causes should not be assigned to UK GDP surging far beyond consensus expectations again in February, despite the notability of Q1 growth tracking 0.7% q-o-q.
• Residual seasonality has dominated the post-pandemic growth profile, and the recent resilience merely matches it. Stagnation for the rest of the year is the consequence.
• Disruptive and volatile US trade policy will also depress the underlying economic trend beneath the spurious seasonals. We now bake both more fully into our modal forecasts.

1. HEM: Fear of Fear Itself

By Phil Rush, Heteronomics

• US surveys indicate a fear of tariffs and DOGE, leading to a negative sentiment.
• Despite these fears, resilient labour markets suggest that concerns may be exaggerated.
• There is an expectation of reversing unnecessary easing in 2026 due to high underlying price and wage inflation.

2. US Tariff Impact Estimates

By Phil Rush, Heteronomics

• New US tariffs ignored any notion of reciprocity, reaching shockingly substantial sizes. However, the UK was relatively fortunate in landing on the 10% minimum rate.
• Repeating 2024’s imports would raise $577bn in tariff revenue, which is worth ~3% of consumption. 70% pass-through to prices would add 2% to the level over 1-2 years.
• Negotiations need to conclude rapidly to avoid these front-loaded price rises. The EU’s likely retaliations would magnify its pain, but the US is the biggest stagflationary loser.

3. Trump’s Reciprocal Tariffs Hit Asia Hard

By Priyanka Kishore, Asia Decoded

• The scale and scope of Trump’s reciprocal tariffs has exceeded our expectations.
• The growth outlook has unambiguously worsened across the board and will dominate inflation in Asia this year.
• We expect Asian policy rates to be reduced by an average of 100 basis points in 2025.

4. Tariff Transition Smoothing

By Phil Rush, Heteronomics

• President Trump’s tariffs embed structural cost pressures, compounding supply chain changes and creating a stagflationary shock central banks cannot offset.
• Potential retaliation risks raising inflation expectations, constraining the extent to which monetary policy can smooth transitional pains through temporary easing.
• We still believe any dovish policy imperative is likely to be short, shallow, and reversed, with central banks forced to remain flexible and focused on shorter horizons again.

5. TRUMP’S TARIFFICATION: The Market’s Willful Ignorance

By David Mudd

• Liberation Day marks the beginning of the Tariffication of the global trading system.  The complex web of supply chains will be forced to detangle itself to find cost efficiencies.
• US companies will try to unpack the many complexities of re-sourcing products to mitigate the inflationary effects of tariffs.  Domestic substitution is not a possibility in the near-term.
• US consumers will begin to see inflationary impacts of Tariffication in the coming weeks.  China announced retaliatory measures that would open the door for other countries to do the same.

6. EA Disinflates March’s Excess

By Phil Rush, Heteronomics

• Euro area inflation slightly undershot consensus expectations in March, consistent with the correlation of surprises and energy prices. Yet it was 7bps above our forecast.
• Services prices drove core inflation down to 2.4%, creating some dovish space. However, the headline outcome reversed last month’s upside to match February forecasts.
• Resilience in the real economy still justifies more cautious easing close to neutral, so we expect graduated cuts to skip April for June, but the risk of an extra cut has risen.

7. The Month Ahead: Key Events in April

By Gaudenz Schneider

• Central Bank Rate Decisions in Australia, India, and South Korea.
• Tariffs: US reciprocal tariffs effective from 2 April; secondary tariffs are now a factor.
• Holidays: Good Friday is an exchange holiday in Hong Kong, Australia, India, and the US. Several other national holidays throughout the region.

8. Investors Have that “Oh Sh#t Moment” – Part 1:  Hong Kong Strategy

By Rikki Malik

• That “Oh sh#t moment” has just struck many investors in US markets
• Within Hong Kong , Tech most at risk as investors take profit
• Our alternative sector selection  has performed both absolutely and in relative terms

9. HEW: Yikes, At Tonto Tariff Hikes

By Phil Rush, Heteronomics

• Severe global tariff increases have significantly impacted market sentiment, leading to lower equity prices and rate expectations. The market’s eagerness to discount ongoing US labour market resilience is considered excessive.
• The new tariff rates are set to take effect in the coming week. Any further trade conflicts could be the main macro news.
• US inflation, UK GDP, and the RBNZ are the conventional highlights, but these data may be disregarded as old news.

10. Asian Equities: India – Brace for Another Leg Down in the Near Term

By Manishi Raychaudhuri, Emmer Capital Partners Limited

• Indian equity’s recent spike overlooks near-term risks – possible cuts in consensus EPS estimates, risks arising from reciprocal tariffs and another bout of likely INR depreciation. Valuations are again expensive.
• Our analysis of sector fundamentals foretells earnings estimate cuts in most sectors. Financials, and to a lesser extent, consumer discretionary could see upgrades. Expanding trade deficit could drive INR decline.
• In the near term we are cautious about India. For country-dedicated investors we recommend increasing exposure to financials (particularly large cap private banks), select consumer discretionary, and defensives like utilities.

1. US Tariffs: No Fooling!

By Alastair Newton, Heteronomics

• The announcement of individual reciprocal tariff rates for US trading patterns on 2 April is a significant event for investors.
• This announcement is part of a drive to re-industrialise America.
• Despite its significance, this could merely represent the initial stages of a prolonged trade war.

2. The Week Ahead – In The Eye of The Storm

By Nomura – The Week Ahead, Nomura – The Week Ahead

• The Fed, Bank of England, and BOJ all left rates unchanged with their own unique perspectives
• Market volatility continues with equities bouncing and the dollar rebounding
• Fed Chair Powell emphasized keeping options open and uncertainty in the economy, with no immediate rate cuts expected

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

3. UK: Low CPI As Seasonal Sales Extend

By Phil Rush, Heteronomics

• UK CPI inflation slowed by 15bps to 2.84%, rounding slightly under expectations. The services rate was surprisingly resilient, and January’s upside news broadly persisted.
• Downside news from clothing and core goods prices occurred because January sales extended broadly and unusually. Postponed Spring lines should drive a March rebound.
• Headline inflation outcomes are benign enough not to threaten the BoE’s likely cut in May, but ongoing resilience still makes that the final move in our forecast.

4. UK Fiscal Smoke Over Treading Water

By Phil Rush, Heteronomics

• Attempts to recreate fiscal headroom after slippage rely on implausible and optimistic assumptions. Further tax rises and delayed prudence are likely in the Autumn budget.
• Replacing aid resources with capital defence spending helps loosen fiscal policy inside the budgetary rules. Policy changes are relatively neutral over the next few years.
• Without corrective action, the gross financing requirement path is £18bn a year higher than in the Autumn, and almost £50bn higher than last Spring, burdening gilt issuance.

5. PMI Spring Vibe Shifts

By Phil Rush, Heteronomics

• A resurgence in the US and UK services PMIs seems inconsistent with renewed dovish pricing that assumes activity weakness. Vibes may be throwing surveys beyond reality.
• Labour demand growth seems to be trending close to supply, signalling monetary conditions close to neutral. That is broadly the story across a broad basket of countries.
• We still believe rate pricing is too dovish for the Fed and, to a lesser extent, the BoE. Noisy survey vibes and spurious assumptions of tightness are likely to be misleading.

6. Asian Equities: What if There’s a US Recession?

By Manishi Raychaudhuri, Emmer Capital Partners Limited

• US recession chatter is back. During past recessions, US declined less than Asia. Within Asia, select consumer staples, telecommunication, energy outperformed. Surprisingly, so did Korea and Taiwan tech, HK industrials.
• Asian equity drawdown was driven more by valuation derating than by earnings decline. During every US recession, all Asian currencies depreciated and FIIs sold almost all Asian markets. 
• In the event of a US recession, we think Asia would outperform US. We like attractively valued domestic-focused sectors and stocks, unless a globally linked stock is egregiously undervalued.

7. Market Movers: Key Dates at a Glance (31 March- 6 April)

By Gaudenz Schneider

• Australia: RBA rate decision on 1 April. Expect no change.
• Japan: Nikkei 225 rebalancing effective 31 March at the close.
• US reciprocal tariffs will keep everyone on their toes on 2 April.

8. Asian Equities: India – What Would FIIs and DIIs Buy and Sell?

By Manishi Raychaudhuri, Emmer Capital Partners Limited

• We analyze FIIs’ and DIIs’ buying/selling trend across sectors and their sector-wise stances relative to benchmarks to assess which sectors they would buy or sell in the near term.
• FIIs and DIIs have bought consumer discretionary and healthcare secularly. They recently started buying financials and IT, after prolonged selling.  They’ve also secularly bought industrials, barring the last two quarters.
• We conclude that both FIIs and DIIs shall continue to buy financials, industrials and consumer discretionary. They would also buy healthcare and sell materials, energy, IT and consumer staples.

9. How to Trade the Momentum Reversal

By Cam Hui, Pennock Idea Hub

• Global equity markets saw a sudden reversal in risk appetite out of the Magnificent Seven.
• While risk appetite has recovered in the U.S. equity market and a relief rally will likely continue, the jury is still out on whether the stampede into non-U.S. will continue.
• Reiterate our view that any relief rally is unlikely to be sustainable. Investors may be better served by diversifying their U.S. exposure into non-U.S. equities for the coming market cycle.

10. Abroad and at Home, Asian Politics Set For a Tough Ride Ahead

By Manu Bhaskaran, Centennial Asia Advisors

• Washington’s apparent disengagement from its European partners is troubling Asian governments who are rethinking their own foreign policy and security strategies.
• So far, the region has not been targeted by the US administration. But their persistent trade surpluses and security arrangements expose them to potentially aggressive measures.
• Domestically, political stability has deteriorated in Thailand, the Philippines, and Indonesia, distracting governments from providing effective leadership in a riskier world.

1. Ray Dalio on the Coming Crisis in US Debt

By Odd Lots, Odd Lots

• Ray Dalio, founder of Bridgewater and author, discusses big numbers and debt cycles in a social and political context
• Tracy and Joe host a podcast episode with Ray Dalio, known for his insights on finance and the invention of the chicken nugget

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

2. From Gene Hackman to Bitcoin: Signals, Sell-Offs, and Discipline | The New Barbarians #010

By William Mann, HarmoniQ Insights

• Episode 10 of New Barbarians podcast covers recent events and discusses Gene Hackman’s passing
• Mark Connors shares insights on investors seeking certainty and compares them to characters in Gene Hackman’s movies
• Trump’s statements on Truth social and implications for the crypto market are analyzed, drawing parallels to themes of integrity and leadership in Hoosiers.

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

3. The US Bear Market: Stage One – DENIAL

By David Mudd

• After several months of a technical top-consolidation, the US market is entering a bear market.  The piercing of the Magnificent-7 bubble will continue to drive selling pressure in the market.
• Inflation pressures will tie the Fed’s hands to bail out the market with another Fed Put.  Another market bailout would cost much more than the $5 trillion COVID bailout.
• The administration’s policy sequencing is pushing inflation expectations higher as the immediate tariff implementation supersedes other anti-inflationary policies, which will take longer to implement.

4. HONG KONG ALPHA PORTFOLIO (February 2025)

By David Mudd

• HK Alpha Portfolio returned 13.58% in February and outperformed the benchmark by 7.68%. The portfolio has outperformed Hong Kong indexes by 5.16% to 11.48% since its inception on 10/01/24.
• About 50% of the portfolio’s excess returns have been from alpha generation. The portfolio had no exposure to Real Estate, Energy, or Utilities.
• At month-end we sold AAC Technologies Holdings (2018 HK) , Trip.com Group (9961 HK) , MINISO Group Holding (9896 HK) , and trimmed Xiaomi Corp (1810 HK) .

5. 2025 Global Investment Strategy

By Sharmila Whelan, Westbourne Research Services

• Last year 70% of the calls made money. This year we make another 43 investment recommendations, global, US, Europe, Japan and 8 Asian countries. 
• Our prediction that Bitcoin will become a US reserve asset under Trump is already playing out. 
• Stock market volatility will persist, with diverging performance and subdued  gains compared with 2024. Our top picks are the US, Japan, Taiwan, Korea and India and selectively China. 

6. ECB: Meaningfully Less Restrictive

By Phil Rush, Heteronomics

• The ECB’s sixth 25bp deposit rate cut to 2.5% was unsurprising, and its characterisation of policy as meaningfully less restrictive leaned towards our relatively hawkish view.
• Policy rates may already be close to neutral. Looser fiscal policy plans also pressure monetary policy to follow a tighter path than would otherwise have been necessary.
• We still expect the ECB to hold rates in April, which is no longer a controversial call. A final 25bp ECB cut in June remains in our outlook (BoE cuts in May and Fed on hold).

7. The Drill – Geopolitical Tensions Are Easing, Not Escalating

By Andreas Steno, Steno Research

• Hello everyone, and welcome back to our weekly editorial on geopolitics, commodities, and macro.
• While there hasn’t been much news on the commodity front since last week, we have a bunch of moving parts on the geopolitical scene—last Friday’s heated (and unplanned) Zelensky/Trump debate, the subsequent removal of all military aid targeting Ukraine, and now Trump trying his best to get all counterparts and allies to block any partnerships with China.
• While this was already evident earlier this week, when the administration urged Mexico to impose tariffs on China to avoid US tariffs, today’s reports of Putin acting as the middleman in the Iran nuclear deal were not something anyone had on their bingo cards.

8. HEM: Pausing Policy Easing

By Phil Rush, Heteronomics

• Central banks are advised to slow, pause, or stop reducing rates due to rising inflation and labour costs.
• Inflation is unexpectedly increasing, and labour costs are exceeding target-consistent levels.
• Monetary policy is almost neutral according to activity trends, but rate hikes in 2026 could counteract unnecessary easing.

9. Steno Signals #187 – Remember August & September 2024? Tariffs are to blame

By Andreas Steno, Steno Research

• Friday’s bizarre scenes in the Oval Office will take some time to digest for all involved counterparties.
• I don’t feel in a position to judge either side, but I will use this analysis to assess the ramifications of the event.
• As a disclaimer, remember that I am European!Trump’s argument that the U.S. pays too much to the rest of the world is, in many ways, entirely correct—but also quite banal.

10. HEW: Political Blunderbuss

By Phil Rush, Heteronomics

• Shot from Trump’s blunderbuss is hitting sentiment and risk appetite yet the hard data remain resilient. Europe waking up on defence punched markets more in hope than reality, but hawkish inflation and ECB news helped create room to close our bullish call.
• Next week’s US inflation data are the scheduled global highlight, along with the Bank of Canada likely pausing its cutting cycle. We also await UK GDP data confirming resilience inconsistent with the dovish panic at February’s BoE meeting.
• Note: Smartkarma is now the sole distributor of our research, so clients will only receive all other research from Smartkarma (queries to transition@smartkarma.com).

1. Kevin Jiang – The Biggest Trade of Our Lifetime & The Next Financial Shift | The New Barbarians #008

By William Mann, HarmoniQ Insights

• Episode number eight of the Barbarians podcast on Valentine’s Day, February 14, 2025, featuring guest Kevin Jang, CIO of Virgo Digital Asset Management
• Kevin’s background includes experience in trading fixed income markets and digital assets, providing valuable insights on correlations between traditional macroeconomics and digital assets
• Discussion on recent market events such as blowout jobs numbers and higher than expected CPI, signaling a potential turning point in the markets and a shift in investor sentiment

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

2. Why Are Bond Yields Rising As Rates Are Cut?

By The Bid, The Bid

• Fed interest rate policies have not followed traditional patterns, with long-term rates decoupling from short-term rates
• The economic shock of Covid-19 has led to increased focus on inflation and uncertainty in the bond market
• Fed Chairman Powell’s actions and fiscal policy responses have contributed to changing economic dynamics and interest rate outlooks

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

3. U.S. Treasuries and the Trump Effect

By Alex Ng, Fortress Hill Advisors

• If the Fed convinces the market that it is leaving the door open to easing and sees Fed Funds reduction multi-year, then 2yr could hold onto a small discount .
• 10yr yields will likely maintain a small to modest premium to 2yr.
• Funding will keep 10yr Treasuriies elevated unless a slowdown in the economy is evident, but the 10yr budget bill now looks like it will produce a budget deficit in 2026-27.

4. What the Surge in Gold Tells Us About the Stock Market

By Cam Hui, Pennock Idea Hub

• The gold bull is just starting, with strong upside potential in the coming investment cycle.
• The market is undergoing a regime shift. Gold will be useful to hedge against bond weakness in the coming cycle, which will see small-caps dominate large-caps and value dominate growth.
• Gold mining stocks present a long-term opportunity, but may be vulnerable to a short-term setback.

5. Steno Signals #185 – Reciprocal Tariffs Are GOOD News! Here Is Why!

By Andreas Steno, Steno Research

• Welcome to our weekly editorial on everything macro, where we cut through the noise and deliver contrarian takes on macroeconomics, liquidity, tradeable themes, and everything in between.
• Reciprocal tariffs is a concept you’ll need to familiarize yourself with.
• Despite Trump’s press conference last week being a confusing mess, lacking clarity on geographies, products, and specific tariff/VAT rates targeted in this tit-for-tat approach, the aim seems crystal clear: Trump wants a global response, and it could very well lead to globally lower tariffs and VAT rates.

6. India & Trump’s Trade War

By Sharmila Whelan, Westbourne Research Services

• Buy and hold investors should be looking to buy on dip,  and we are structurally long Indian equities. 
• However the attraction of India as a hedge against Trump’s  global trade war and China has diminished. Two reasons. 
• First, India’s disappointing economic performance. Second, Trading Post’s expectations that the trade war will be over sooner than consensus is expecting and that a US-China trade deal will be struck.

7. The Drill – The Big Tech Showdown

By Mikkel Rosenvold, Steno Research

• Xi’s Tech Summit: China’s Wake-Up Call: On Monday, February 17, Xi Jinping sat down with China’s tech elite in what looked like a serious course correction. Jack Ma (Alibaba) was there. So was Ren Zhengfei (Huawei). But one key figure was missing: Robin Li, Baidu’s CEO. His absence sent Baidu’s stock into a tailspin, wiping out billions in market value before state media scrambled to calm investors down.

• Trump’s Tech Playbook: No More Playing Defense: Beijing is watching what’s happening in Washington—and it doesn’t like what it sees. The Trump administration is moving fast, rolling back regulation, cutting deals with industry giants, and pushing AI, semiconductors, and defense tech like it’s the new space race.

• Baidu’s Stock Crash: A Symbol of China’s Problem: The Baidu selloff shows that investors are still nervous about China’s real stance on tech. It’s one thing to invite Jack Ma back into the room—it’s another to convince the market that Beijing is serious about letting private companies thrive again.

8. US vs EU Part 3: Russia/Ukraine

By Alastair Newton, Heteronomics

• The misinterpretation of the recent Trump/Putin phone conversation by the commentariat partly explains why markets are currently ahead of the curve on Russia/Ukraine issues.
• As long as European leaders continue to deny the state of transatlantic relations, the situation remains uncertain.
• Given the current circumstances, investors should proceed with caution, keeping in mind the principle of ‘caveat emptor’ (buyer beware).

9. Charting India’s Path in an Evolving World

By Priyanka Kishore, Asia Decoded

• India’s economic future continues to be hotly debated, not least because of Prime Minister Modi’s vision to make it a developed economy by 2047.
• Unfortunately, economic trends haven’t played along. The stellar post-pandemic growth recovery has given way to an abrupt slowdown, led by falling private consumption growth.
• We chat with eminent Indian scholar and noted journalist, Niranjan Rajadhyaksha, on the opportunities and challenges facing India.

10. India – Stay Overweight But Hedge

By Sharmila Whelan, Westbourne Research Services

• Maintain structural overweight on Indian equities but hedge against rupee weakness
• While buy and hold investors should be looking to buy on dip, the attraction of India as a hedge against Trump’s  global trade war and China has diminished. 
• That said fundamentals – corporate and bank balance sheets – are strong, the corporate profit cycle is in upswing and the real cost of capital is within the normal range.