In today’s briefing:
- ASIA: Portfolio Positioning During US Bear Market
- Trump-ism And East Asia
- Steno Signals #188 – The Inflation Cry Wolf or a Big Wave in the Making!?
- [US Nat Gas Options Weekly 2025/10] Henry Hub Rallies on Colder Weather and Record LNG Exports
- [US Crude Oil Options Weekly 2025/10] WTI Extends Decline Amid Weak Demand and Trade Uncertainty
- Gold’s Record Rally Meets Resistance: Will USD 3,000 Be the Breaking Point?
- Iron Ore Majors Guidance: Key To Understanding Supply Side in 2025
- China Business Cycle Investment Signals
- [IO Technicals Weekly 2025/10]: Bearish Signals Deepen in IO Amid China’s Steel Production Cuts
- CX Daily: China Plans Fiscal Overhaul to Fix Crisis in Local Government Finance
ASIA: Portfolio Positioning During US Bear Market
- The US has entered the first leg of its bear market. Administration officials have taken a “no pain, no gain” stance, with policy priorities taking precedence over market moves.
- Sequencing problems start as tariffs and DOGE policies are enacted first, which negatively affect inflation and economic growth. Atlanta Fed GDPNow forecasts a recession within a year.
- Asian markets will be pulled down as part of the US risk-off trade. Regarding relative performance, HK/China will benefit from the underweight exposure of foreign funds and better valuations.
Trump-ism And East Asia
- Donald Trump has abandoned the US-led international order, attempting to reshape global trade and finance.
- This shift could have negative implications for East Asian economies.
- East Asian economies may be forced by Washington into a Chinese sphere of influence as part of a grand bargain with Beijing.
Steno Signals #188 – The Inflation Cry Wolf or a Big Wave in the Making!?
- Happy Monday, and welcome to our editorial on everything macro! This is the place where we challenge the consensus narrative to uncover the best risk/reward trades and views in the world of macro.
- The tariffs, despite all the bizarre flip-flopping, are going live to some extent this month.
- We know that China has been hit with two rounds of 10%-point tariffs, while Mexico and Canada are facing 25% tariffs (with numerous exemptions).
[US Nat Gas Options Weekly 2025/10] Henry Hub Rallies on Colder Weather and Record LNG Exports
- For the week ending 07/Mar, U.S. natural gas prices surged by 14.7% on the back of colder weather forecasts, rising LNG exports, and supply constraints.
- Henry Hub posted its biggest weekly gain since January, hitting a 26-month high during the week ending 07/Mar. Prices closed above the 9-day and 21-day moving averages.
- Henry Hub OI PCR was 1.00 on 07/Mar, unchanged from 28/Feb. Call OI rose by 8.7% WoW, while put OI grew by 8.6%.
[US Crude Oil Options Weekly 2025/10] WTI Extends Decline Amid Weak Demand and Trade Uncertainty
- WTI futures fell by 3.9% for the week ending 07/Mar, marking its seventh consecutive weekly drop. Prices fell due to trade tensions, rising U.S. crude inventories, and demand concerns.
- The U.S. rig count fell by one to 592, ending a five-week gain streak, with oil rigs unchanged at 486 and gas rigs down by one to 101.
- WTI OI PCR fell to 0.91 on 07/Mar from 0.98 on 28/Feb. Call OI increased by 13.1% WoW, while put OI rose by 5.3%.
Gold’s Record Rally Meets Resistance: Will USD 3,000 Be the Breaking Point?
- Geopolitical risk and central bank purchases continue to support gold demand, but rising Treasury yields present headwinds. Physical imports to the U.S. are plateauing, easing supply constraints.
- Gold prices are facing resistance at USD 3,000/oz, with technical indicators suggesting potential consolidation before further upside. Historical patterns indicate similar conditions led to stagnant prices.
- Gold leasing rates have normalized, signaling reduced supply stress. Previous spikes above 5% indicated a temporary supply shock, but the recent decline suggests a more balanced market.
Iron Ore Majors Guidance: Key To Understanding Supply Side in 2025
- Iron ore majors guide flattish growth for 2025, while China continues to have strong iron ore imports (4.2% YoY for CY24), despite weak steel production (-1.1% YoY).
- Significant capacity growth commences in CY26 with the ramp-up of Rio Tinto Ltd (RIO AU)’s Simandou project, equivalent to 6% of global seaborne trade ~100 million tons.
- We believe the iron ore price will be rangebound until 2026 (between 100-120 USD/ton), after which it is highly probable that it will decline to 80-90 USD/ton.
China Business Cycle Investment Signals
- The Chinese economy is yet to bottom and the corporate sector’s troubles are far from over. The same goes for the property sector. Consumers are still risk averse.
- Trading Post has a neutral stance on equities as an asset class but is a selective buyer of certain stocks and growth sectors.
- These include AI, high tech – software and hardware, robotics and electronics. An underweight on consumer discretionary, property and export cyclicals as well as bonds and the rmb maintained.
[IO Technicals Weekly 2025/10]: Bearish Signals Deepen in IO Amid China’s Steel Production Cuts
- Iron ore futures declined by USD 1.75/ton last week, closing at USD 100.45/ton on March 7, trading within a narrower USD 3.90/ton range.
- Technical indicators confirm bearish momentum, with a death cross, MACD signaling weakness, and RSI nearing oversold conditions at 36.61.
- Market sentiment remains fragile due to China’s steel production cuts, declining imports, and escalating U.S.-China trade tensions, despite potential stimulus measures.
CX Daily: China Plans Fiscal Overhaul to Fix Crisis in Local Government Finance
- Fiscal / Cover Story: China plans fiscal overhaul to fix crisis in local government finance
- Cranes /In Depth: Power lines push endangered birds to the edge
- CPI /Drop in China CPI fuels deflation concerns
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