In today’s briefing:
- Positioning Watch – Markets have NOT been Ready for Growth to Weaken in the US
- What Is the Real Purpose of President Yoon’s Martial Law – To Reveal Election Fraud?
- Technically Speaking, Breakouts and Breakdowns: HONG KONG (DECEMBER 5)
- Balancing The Scales: EUDR’s Evolving Impact On The Rubber Market
- OPEC+ Extending Output Cuts Highlights Concerns of Weak Demand and Ample Supply
- India: RBI Extends Rate Policy Error Despite Slow Growth and Prospect of Low Inflation
- HEW: Politics Doesn’t Derail Policy Rate
- CX Daily: Why China’s Piecemeal Child Subsidy Policy Failed to Deliver
Positioning Watch – Markets have NOT been Ready for Growth to Weaken in the US
- Happy Thursday, and welcome to our weekly positioning watch, brought to you just before the crucial NFP report tomorrow.
- From what we see across markets, it looks like participants are starting to take risk off the table in equity space ahead of the report.
- Markets have struggled this week to settle on a clear narrative for USD assets, especially USD rates.
What Is the Real Purpose of President Yoon’s Martial Law – To Reveal Election Fraud?
- One of the most important questions about the martial law three days ago is why did President Yoon send special forces (297) to the National Election Commission?
- President Yoon may have ordered troops to be deployed to the NEC to get to the bottom of the election fraud since all the important election servers are stored there.
- It is EXTREMELY DIFFICULT to prove an election fraud. Even if President Yoon declares a war on election frauds, he must have extraordinary pieces of data to back this up.
Technically Speaking, Breakouts and Breakdowns: HONG KONG (DECEMBER 5)
- During Hong Kong’s market correction during November, we noticed that the Put/Call spread stayed below 1 and the skew moved to its lowest level in 3 years both bullish signals.
- Yum China Holdings (9987 HK) share price had a golden cross breakout on December 3, as the casual dining sector in China shows growth going into next year.
- MINISO Group Holding (9896 HK) had a breakout from a falling wedge pattern relative to MXEF. The gap up in the share price and momentum signals confirms the uptrend.
Balancing The Scales: EUDR’s Evolving Impact On The Rubber Market
- FAQ and guidance documents bring clarity
- Synthetic rubber out of the purview of EUDR
- Allows for rubber suppliers in countries like Vietnam and Indonesia to catch up
OPEC+ Extending Output Cuts Highlights Concerns of Weak Demand and Ample Supply
- OPEC+ extends crude oil supply cuts to the end of 2026, a year longer than planned. It also pushed its planned output hikes by three months to April 2025.
- OPEC+ revised its output hike plan, reducing monthly increases to 138k bpd over 18 months, down from 180k bpd over 12 months.
- OPEC+ approved a 300k bpd output increase for the UAE, starting in April 2025 through September 2026, delayed from the original January 2025 start.
India: RBI Extends Rate Policy Error Despite Slow Growth and Prospect of Low Inflation
- Despite core inflation being below its (headline) inflation target of 4% since Dec’23, the RBI has rigidly failed to cut its policy rate, thus constraining RGDP (& EPS) growth.
- Vegetable inflation (6% of CPI) has indeed surged, but monetary policy can do little to influence that. Vegetable and cereal inflation are likely to moderate sharply now, after strong harvest.
- We thus expect 75bp of rate cuts in Feb-Jun’25. Near-term RGDP growth will disappoint (7.5% in H2FY25, driven by rebounding government spending), but a rate-driven recovery will occur in H1FY26.
HEW: Politics Doesn’t Derail Policy Rate
- The rebound in US payrolls resulted in a disappointing increase in the unemployment rate, leading to the possibility of another 25bp rate cut. Meanwhile, upward revisions to UK employment and unit labour costs are pushing the BoE to maintain the current rates.
- Uncertainty regarding the upcoming ECB decision has lessened, primarily due to the lack of support for a 50bp expectation. The current data does not justify such a move.
- Other economic announcements are expected from Australia, Canada, Switzerland, Brazil, and Peru.
CX Daily: Why China’s Piecemeal Child Subsidy Policy Failed to Deliver
- Birth / In Depth: Why China’s piecemeal child subsidy policy failed to deliver
- Index /: China’s new economy industries gain on record tech, capital inputs, Caixin index shows
- Meat /: Australia’s red meat exports to China fully resume as Beijing lifts ban on final two companies
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