In today’s briefing:
- EM by EM #36: What Goldman got wrong about China in 2023
- [Counting Beans #3]: Soybean Price Remains Solid But Headwinds On The Horizon
- Is Coinbase Rally Running Out of Steam?
- Oil Watch: Why is demand RECORD high, when we are told the opposite?
- EUR-flation Watch: Consensus is OFF (again)
- CX Daily: Why China Wants Brokerages to Merge and Why It Won’t Be Easy
EM by EM #36: What Goldman got wrong about China in 2023
- Main conclusions up-front:It’s getting harder to disentangle politics from price movements in China, with the government becoming more involved in the equity market.
- In stark contrast to their U.S. counterparts, Chinese banks are grappling with the weight of growing savings from consumers and businesses.
- This surge is impacting their profitability, while the real estate sector’s challenges continue to linger.
[Counting Beans #3]: Soybean Price Remains Solid But Headwinds On The Horizon
- Brazil’s weather forecast remains mixed on showers with heavy rains to arrive only in January. Rainfall in Brazil’s key agricultural region.
- U.S. soybean net sales show a significant uptick, but recent lack of large export sales could signal a slowdown in demand.
- Asset managers reduce long positions in soybean futures and options, showing a shift towards a bearish market outlook but prices remain resilient above USc 1,300.
Is Coinbase Rally Running Out of Steam?
- Outperformance during rallies is usually followed by sharper corrections during downturns. Buy the rumour and sell the news is common in crypto markets.
- Coinbase is a top ranking performer. The crypto exchange stock is up a whopping 454% YTD outperforming BTC by almost 3x.
- While Coinbase may do well in a continued cryptocurrency bull market, it is worth considering whether the rally has already played out.
Oil Watch: Why is demand RECORD high, when we are told the opposite?
- Oil has been one of the few movers during the quiet days of Christmas and therefore we thought we would run down the news driving crude oil markets and deliver our takes.
- We start with crude oil exports where the latest m/m numbers reveal that the US has seen a 4.65% drop in export numbers in line with seasonal effects.
- The fewer seaborne barrels paired with tensions in the Red Sea have added to the momentum for oil prices, but we also note that the EIA has started to ramp up SPR buying again with contracts signed for the purchase of 3 million barrels.
EUR-flation Watch: Consensus is OFF (again)
- We interestingly see a pattern where Germany is used to predict MoM consensus elsewhere in December.
- German consensus numbers look relatively sensible, while Spanish numbers are off.
- Net/net, the ECB will likely get another dovish surprise relative to their base case, and we see more of such upcoming surprises in Q1-2024.
CX Daily: Why China Wants Brokerages to Merge and Why It Won’t Be Easy
- Mergers / In Depth: Why China wants brokerages to merge and why it won’t be easy
- Jobs / Year In Review: China’s downsized post-pandemic job market feels the strain
- Personnel /: China boots three arms executives from top political advisory body
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