Daily Brief Macro: India to Become Next China? and more

• India’s rapid economic growth, coupled with China’s recent economic challenges, has fueled discussions about whether India can become the next global economic power, as China has done for decades.
• China and India, Asia’s two largest economies, have taken different economic paths in recent years.
• Analysts at UBS Global Research pointed out: “China’s post-epidemic economic recovery is weak, while India’s performance is strong.”

• Happy Sunday from Denmark!I’ve had a few days to digest Powell’s speech from Friday, and my takeaway is unequivocally dovish.
• Powell and the committee have signaled that they will not tolerate further cooling of the U.S. labor market without responding.
• This marks a full-blown shift in priorities, with inflation numbers now taking a backseat to labor market data going forward.

• Hedge Funds Pushing into Commodities Markets Big trading houses like Glencore, Trafigura, Mercuria or Vitol are benefiting since years now from the increasing fluctuations on the commodities markets.
• This trend increased, especially since crude oil went negative when the Covid pandemic started and was followed by further volatility since the macro environment became even more fragile with the war in Ukraine and now the conflicts in the Middle East.
• According to Ney York based consulting firm Oliver Wyman, the gross margin of trading houses amounted to 105 billion dollars in 2023.

• The biggest shift in FX markets is a lower range of interest rates in the US, signaling a regime shift towards Fed rate cuts.
• Dollar strength is diminishing due to lower rates and softer US inflation, impacting carry trades and high yield currencies.
• Euro-Dollar may benefit from lower yields, but its upside potential is uncertain amidst ongoing market volatility and economic uncertainty.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Release of key economic data from Europe, Asia, and the US, with a focus on inflation, unemployment, and consumer sentiment
• Market theme of “Goldilocks” prevails with lower US yields, rising equities, and a softer dollar
• Outlook for the US economy includes expectations of a stable core PCE inflation rate and positive consumer sentiment towards the economy

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• A climb in the unemployment rate can be associated with recessions, especially when dominated by a negative change in employment
• But the recent rise in the unemployment rate through July does not seem to be consistent with the characteristics of prior recessions on balance
• Nevertheless, further increases in the unemployment rate need not be of the same breed   

• The past week saw insights on Bank Rakyat Indonesia, Prodia (PRDA IJ), BFI Finance Indonesia (BFIN IJ), Bumrungrad Hospital (BH TB), and Shakey’s Pizza (PIZZA PM).
• There were also macro insights on Indonesia and Thailand together with an additional insight on 99 Speed Mart Retail Holdings (99SPD MK) ahead of its IPO.
• 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 Southeast Asia.

• South Korean Financials are experiencing a significant increase in fund ownership. Average fund weights are approaching record highs at 1.94%, with a record 52% positioned overweight.
• At the fund level, a strong buy-side bias is evident, with 37 funds opening positions compared to just 3 closures over the last 6-months.
• Strong ownership momentum in KB Financial, DB Insurance, Shinhan Financial, and SK Square have contributed to the sector-wide bullishness.