In today’s briefing:
- HK/China: DOOM AND GLOOM? DON’T GET FOOLED AGAIN
- Market Commentary Snapshot: Delaying EUDR Likely To Bring Supply Glut Back
- [ETP 2024/42] WTI Falls as Supply Disruption Fears Subside, Nat-Gas Slides on Weaker Demand Outlook
- China September GDP Rotates Higher
- Regional Economics: Can Asian Economies Innovate?
- HEW: European Doves Are Too Stretched
- Heard From Fortress Hill: Weekly Market Observations (18 Oct 2024)
- Chile: 25bp Rate Cut To 5.25% (consensus 5.25%) in Oct-24
HK/China: DOOM AND GLOOM? DON’T GET FOOLED AGAIN
- As HK/China markets complete their retracements after the best rally in more than a decade, the exaggerated pessimism from the media and analysts returns.
- The government continues to roll out measures to relieve the pressure on the property market in what is a multi-year process with no quick fix.
- Even after a historic rally, the HSI still trades at a significant valuation discount which will narrow in the coming months.
Market Commentary Snapshot: Delaying EUDR Likely To Bring Supply Glut Back
- Requests for retraction in contracts by buyers
- Oversupply of spot cargoes feeds pessimistic expectations
[ETP 2024/42] WTI Falls as Supply Disruption Fears Subside, Nat-Gas Slides on Weaker Demand Outlook
- For the week ending 11/Oct, US crude inventories decreased by 2.2m barrels, diverging from expectations of a 1.8m barrel build. Additionally, gasoline and distillate stockpiles also declined more than anticipated.
- US natural gas inventories rose 76 Bcf for the week ending 11/Oct, lower than analyst expectations of an 80 Bcf buildup. Inventories are 4.6% above the 5-year seasonal average.
- Halliburton, Schlumberger, and Occidental’s target prices were cut. Notably, analysts kept their Buy ratings on Reliance despite its net profit falling by 4.8% YoY.
China September GDP Rotates Higher
- Q3 GDP and September figures were slightly better. With a speed up of government spending in Q4 , we change our 2024 GDP forecast to 4.8% from 4.6%.
- However, despite a further Yuan1.5-2.0trn of fiscal stimulus to come, we still see 4.5% 2025 GDP.
- Stimulus is not focused on the consumer, while the residential housing market has not bottomed in construction or sales terms.
Regional Economics: Can Asian Economies Innovate?
- The latest Global Innovation Index shows that Asian economies are not yet fully reaping the benefits of innovation-led growth.
- Despite their strong performance in the overall rankings, Asian economies, including frontrunner Singapore, underperform in translating their considerable input investments into tangible outputs.
- As the conventional growth drivers of trade, demographics, and physical capital start running out of steam, Asian economies need to catch up to the innovation frontier to promote future growth.
HEW: European Doves Are Too Stretched
- A consecutive ECB rate cut and the UK’s unexpected disinflation have led to an extension in dovish pricing, which appears stretched both in absolute terms and relative to the US. Despite this, Europe’s resilient labour markets continue to influence medium-term inflation.
- The Bank of Canada is predicted to implement a 50bp cut next week, following the Fed’s lead in the primary policy event.
- Flash PMIs, set to be released on Thursday, are considered the most significant data release, particularly due to the stark contrast between US highs and Euro area lows.
Heard From Fortress Hill: Weekly Market Observations (18 Oct 2024)
- HSI declined sharply in the beginning of the week and recoup half of the losses towards end-week.
- S&P500 rose by 1.15% and broke new record. Dow-jones also broke record high
- On the whole we hold the same portfolio throughout the week, loosing in the beginning and gaining back in the end of the week.
Chile: 25bp Rate Cut To 5.25% (consensus 5.25%) in Oct-24
- The Central Bank of Chile reduced the policy rate by 25 basis points to 5.25%, in line with market expectations, reflecting a cautious approach to inflation management amid global volatility.
- External factors, including the Federal Reserve’s rate cuts and China’s stimulus measures, have contributed to higher long-term interest rates and a stronger US dollar, exerting downward pressure on the Chilean peso.
- Future rate cuts are likely, but their pace will depend on domestic inflation trends, global economic developments, and the central bank’s assessment of financial stability risks.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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