In today’s briefing:
- 3 Take-Aways from Li Qiang’s Speech
- Positioning Watch – Are the unpopular bets back in town?
- India Economics: Strong Growth Comes with Strong Caveats
- UK Politics: Betting On Red
- EQD / NSE Volatility Update / 26-Feb-24 to 01-Mar-24
- Philippines CPI Inflation 3.4% y-o-y (consensus 3.1%) in Feb-24
- Thailand CPI Inflation -0.77% y-o-y (consensus -0.8%) in Feb-24
3 Take-Aways from Li Qiang’s Speech
- Welcome to this week’s Great Game where we turn our attention to China.
- The Communist Party is annual National People’s Congress where Premier Li Qiang (Xi’s right hand man) delivered a very noteworthy speech on the Central Committee’s financial and political plans.
- Watching a speech from a Chinese politician is a very different beast from watching top US politicians address the masses.
Positioning Watch – Are the unpopular bets back in town?
- Hello everyone, and welcome back to our weekly positioning watch! Equity markets continue their drift higher for yet another week, and it seems safe to say that markets are now more concerned about liquidity/growth than rates to reiterate ourselves, as equity markets have not attributed the U-turn in rates expectations any value whatsoever.
- As the growth and liquidity outlook still looks decent for the weeks/months ahead, we keep our long risk asset bias.
- The rates outlook looks to have a bigger impact in FX and especially the carry-heavy side of this asset class, and with the market likely going to up-hawk expectations even further if inflation picks up momentum, it could be time for a revival of the USD – FX volatility has at least started to pick up a bit of momentum (bullish USD).
India Economics: Strong Growth Comes with Strong Caveats
- India grew by a strong 8.4% in 4Q23, but growth in industrial value-add came in slower. Bullish claims of strong growth momentum thus need to be qualified.
- The primary driver of growth remained public sector-led investments, with private consumption and capital spending still playing largely second fiddle.
- Slowdowns were also observed across all major sectors, with a contraction in the employment-heavy agricultural industry a potential drag on broader rural demand.
UK Politics: Betting On Red
- The 6 March budget is expected to be highly political, primarily aiming to strengthen Conservative ‘core’ support.
- The budget strategy is also intended to counter the threat from Reform UK, instead of appealing to a wider electorate.
- There is an underlying assumption that an incoming Labour government would have to deal with the fiscal consequences of this budget.
EQD / NSE Volatility Update / 26-Feb-24 to 01-Mar-24
- Put-Call Ratio back at 1.30. Put-buying interest returns as Nifty50 scales new All-time-Highs
- Nifty50 Vol curve starts the week in Backwardation & moves into Contango as Weekly IVs dip. BankNifty Vol curve showing a kinked shape.
- Vol Curve has unwound the skew/smile compression built up over prior weeks
Philippines CPI Inflation 3.4% y-o-y (consensus 3.1%) in Feb-24
- The Philippines’ CPI inflation exceeded market expectations, reaching 3.4% year-on-year in February 2024.
- This is the highest level since December 2023.
- The inflation rate breaks a downtrend, rising towards the core rate, indicating positive news.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Thailand CPI Inflation -0.77% y-o-y (consensus -0.8%) in Feb-24
- Thailand’s CPI inflation in February 2024 declined by 0.77% year-on-year, which was the least negative outcome since November 2023 and close to the consensus forecast.
- Core inflation slowed slightly further to 0.43% year-on-year, contrary to expectations.
- This sustained dovish pressure on monetary policy.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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