Daily Brief Macro: Equity Watch: The Trump versus Biden Basket and more

• We’ve received loads of feedback from our clients regarding our Trump versus Biden basket.
• As a result, we will provide a detailed breakdown of both baskets and explain the rationale behind each.
• We are updating the baskets regularly based on the political proposals of the two candidates.

• We cover the Trump assassination attempt in other spaces, so in this we’ll focus on the political fallout and touch upon other relevant topics, including the Chinese Policy Plenary.
• Firstly some thought on Trump picking J.D. Vance as his running mate.
• As a staunch Trump supporter, Vance represents a more grassroots, anti-establishment figure compared to others like Nikki Haley.

• Recent changes in Canada’s M&A rules have restricted critical metal companies from selling to Chinese investors
• Chinese investors have played a key role in funding the exploration and development of copper porphyries, which are vital for global production
• The uncertainty caused by these rules may lead companies to relocate outside of Canada, potentially harming the country’s mining industry and economy

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• In the short-term, meaningful policy reforms needed out of the Third Plenum
• Chinese data continues to be lacklustre as expected while markets tread water
• What can we expect from the Third Plenum to galvanise the next stage

• Greetings from Copenhagen! Alas, it seems like there are quite a few bears out there who have been infected with recession vibes, thus the doctor has ordered some medicine for the patients which we’ll gladly provide to the likes of Jan Hatzius et. al..
• Firstly, the Dallas Fed’s Weekly Economic Index is at its highest since early 2022 and far far away from anything that smells like recession.
• Real GDP y/y should stay above 2% and the WEI is currently hinting at 3% real GDP growth.

• Hello everyone, and welcome back to our weekly positioning watch.
• The debates about whether the US is heading for a recession are still touring the charts, as the labor market and other economic data soften back towards pre-pandemic levels.
• However, while some might be uncomfortable watching the US economy slow more than anticipated, the lack of ringing alarm bells and Powell’s recent victory lap on inflation have greenlighted markets to price in a soft landing as a 95-99% probability event by now when looking across positioning data.

• The final EA inflation print confirmed the flash at 2.52% in June, with services refusing to slow from 4.1%. Median inflation rates broadly rebounded, stabilising the 3mma.
• Divergences between member states’ underlying pressures are balancing slightly above a target-consistent pace. The ECB is unlikely to be concerned about that.
• Stability in the ECB’s medium-term forecast seems sufficient for it to cut again in September. Tight labour markets may yet renew pressures and pause cuts later.

• UK inflation was broadly unchanged and close to expectations in June, although resilient services price strength was offset by temporary weakness in goods again.
• Seasonal goods discounting is unsustainable disinflation. Underlying pressures remain too high, and their persistence keeps raising consensus forecasts.
• An August BoE rate cut remains most likely, albeit less than before. It can point to the headline rate matching its forecast and lean on its expectation that things will improve.

• Bank Indonesia kept its policy at 6.25%, aligning with market expectations to ensure inflation control and Rupiah stabilization amid ongoing global financial uncertainties.
• Future interest rate decisions will be influenced by persistent global financial market uncertainty, particularly the US monetary policy direction, and strong domestic economic growth driven by robust consumption and investment.
• Ensuring Rupiah stability and maintaining inflation within the 2.5 ± 1% target range remain central to Bank Indonesia’s strategy, supported by a mix of pro-market monetary operations, macroprudential policies, and digitalization efforts to foster economic resilience and growth.