In today’s briefing:
- Bond Watch – Will Japan Pull the Rug from Under the Yield Curve Control?
- Steno Research Signals – The Recession that EVERYONE Agrees Upon
- U.S Debt Ceiling Countdown – USD Liquidity to Be Added Before the Big Political Stand Off
- The Great Game – Is India the Next Super Power?
- The Week That Was in ASEAN@Smartkarma – JCNC Overstretched, Cimory Raises Funds, and AKRA’s Growth
- The Commodity Report #86
Bond Watch – Will Japan Pull the Rug from Under the Yield Curve Control?
- Markets price more than 35 bps ahead of the BoJ meeting. Is that too much?
- BoJ is not scared of inflation. They fear a lack of market functioning in JGB markets.
- JPY may be overbought into the meeting, while USTs are oversold
Steno Research Signals – The Recession that EVERYONE Agrees Upon
- Everyone (61% of economists) agrees on a recession starting in Q2
- Will the Chinese reopening wreak havoc with the Western recession narrative?
- We lay out the case for a postponed recession compared to consensus
U.S Debt Ceiling Countdown – USD Liquidity to Be Added Before the Big Political Stand Off
- USA defaults on its federal debt in Q3-Q4 unless Congress raises the debt ceiling. Upcoming negotiations are looking potent as Democrats seek a ‘clean’ deal, while Republicans demand spending cuts.
- The recent House Speaker elections gave hardcore fiscal Conservatives crucial institutional privileges ahead of the upcoming debt negotiations. Funding to key programs including military support for Ukraine is at risk.
- USD liquidity will be added in February/March as a consequence of the political soap opera. This is typically USD negative and positive for risk assets on the margin.
The Great Game – Is India the Next Super Power?
- Right about now, India surpasses China as the world’s most populous nation.
- However, India is nowhere near the status of China in global affairs. What does India lack and how much will come in the coming years?
- We point to three areas where India need to (and will!) invest to become a truly global player: the defense industry, soft power influence, and joining the UNSC.
The Week That Was in ASEAN@Smartkarma – JCNC Overstretched, Cimory Raises Funds, and AKRA’s Growth
- 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.
- The Past week saw insights on Jardine Cycle & Carriage (JCNC SP), which look expensive relative to its underlying holding and on Bangchak‘s takeover of Esso Thailand (ESSO TB).
- We also saw commentary on Cisarua Mountain Dairy, as it saw General Atlantic take a stake, and AKR Corporindo (AKRA IJ), as it provided positive guidance for 2023.
The Commodity Report #86
- Commodity trading houses have shown a stunning performance since 2020.
- So far, there are only a few arguments for why this should change in the near future.
- But also precious metals miners are shining – nevertheless, they have quite some performance to pick up compared to other miners as well as the broad commodity market.
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