Daily Brief Macro: Here’s What We Told Hedge Funds This Week – and How We’re Trading It! and more

• Happy Friday! Every week, we dive deep into macro trends, analyze asset movements, and uncover the best value plays in the world of macro.
• These insights are shared with hedge funds and institutional clients, and today, we’re bringing them directly to you.
• While the macro landscape can be complex, we believe it doesn’t have to be intimidating.

• Trump’s energy policy focused on increasing domestic production and exerting pressure on oil exports to bring down prices
• Forecast for 2025 and 2026 predicts global commodities market growth and potential oil price fluctuations
• OPEC members plan to increase capacity in 2025, leading to a large surplus in the oil market and potentially lower prices in 2026

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• Latex export revenue posts 18% growth YoY during Jan-Sept
• Tire industry can consume 200,000 tons of latex a year at present
• Govt placing a lot of attention on research, downstream foray

• Hope you had a great weekend! Here’s this week’s sneak peek into my thoughts on liquidity trends and how they influence my approach to risk-taking.
• Watching the alt-season unfold from an incredibly wet and windy Copenhagen this weekend has been quite bizarre.
• The weather outside certainly doesn’t bring out my animal spirits, but there’s a certain smell of 2021 in the air in financial markets—especially if central banks decide to print more into this scenario.

• The US oil and gas rig count fell by 1 to 583 for the week ending on 22/Nov, reporting a second consecutive weekly fall.
• For the week ending 15/Nov, US oil production fell to 13.2m bpd from 13.4m bpd. Output was at a record high of 13.5m bpd between 11/Oct through 01/Nov.
• US energy producers added two rigs in Texas and one each in Wyoming and Oklahoma. They cut three rigs in Louisiana and one each in California and Colorado.

• Overweight, Japanese equities and private equity. Underweight JGBs and hedge against yen weakness
• Japanese business cycle indicators remain broadly positive, underpinning continued economic recovery and corporate earnings growth.
• Mortgage are rising, a positive for construction & consumption. However, spending is moderating despite strong nominal wage growth. Consumption rather than exports is the biggest uncertainty to the outlook.

• SGX IO Futures closed USD 3.83/ton higher for the week ending on 22/Nov. It traded in a range of USD 6.90/ton, which was smaller than the prior week.
• Chinese portside inventories increased by 350k tons WoW to 148.86 MT as of 22/Nov. Steel mill inventories rose 13.8% to 15.6 MT in mid-November compared to early November.
• Iron ore prices remain well supported in the near term despite high stockpiles at Chinese ports due to strong consumption and robust steel production ahead of the Lunar New Year.

• Disappointing September/October China lending data with TSF down 9%/24% YoY to 3.7/1.4 trillion RMB Vs. (analysts expectations of 4/1.5 trillion RMB) has led to skepticism about China’s recovery story.
• Copper prices have dropped below 9000 USD/ton and stayed there despite the fall of exchange inventories. 
• We like the LT copper story and see long-term benefits for stocks like Southern Copper (SCCO US), Ivanhoe Mines (IVN CN), and Teck Resources (TECK US). 

• Donald Trump’s approach to fulfilling his commitment to end the Russia/Ukraine war is crucial.
• This approach could directly affect the escalating tensions on the Korean peninsula.
• It could also impact the situation in the Taiwan Strait.

• The past week saw insights on Aspirasi Hidup Indonesia (ACES IJ), Ginebra San Miguel (GSMI PM), DigiPlus Interactive (PLUS PM), Keppel DC REIT and Bangkok Dusit Medical Services (BDMS TB).
• There was also a macro insight on Indonesia’s economy post the recent rate decision and an insight from Daniel Tabbush on Singapore banks as credit growth starts to recover. 
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated substantive, and actionable insights, macro and equity bottom, from across Southeast Asia.