In today’s briefing:
- Positioning Watch – The real world strikes back
- Don’t Let the Bull Throw You Off!
- Taiwan Shines as China & Japan Decline: Global Funds Top-Down Positioning Report
- New Zealand Policy Rate 5.5% (consensus 5.5%) in May-24
- Sweden Unemployment Rate 8.9% in Apr-24
- UK Inflation Excess Broadly Persists
Positioning Watch – The real world strikes back
- Hello everyone, and welcome back to our weekly positioning watch.
- Markets have been enjoying the easier financial conditions imposed by a weaker than anticipated inflation print, although yields have found their way back to pre-CPI levels.
- The big ongoing theme in markets seems to be the renewed pressures in commodities, as real world demand for crucial metals like copper and nickel has spurred significant flows into broad commodities.
Don’t Let the Bull Throw You Off!
- There is a chance for a correction in the HK markets as latecomers to the party get nervous
- All the signs are pointing to a continuation of this bull market as government support measures continue to roll out.
- Don’t get bucked off that bull by a short-term correction!
Taiwan Shines as China & Japan Decline: Global Funds Top-Down Positioning Report
- Asian Decline: China & HK hits record lows and remains a key underweight. Australia and Japan near ownership lows and India becomes a key underweight. Taiwan powers to record highs.
- Americas Dominance: The United States remains the top allocation and largest country underweight. Value funds increase underweight in the USA but Growth funds reduce. Argentina rises at Brazil’s expense.
- EMEA Conviction Overweight: The UK, France, and the Netherlands maintain near-record overweights. France sees some declining interest, while Belgium, Norway, and Finland play diminishing role. MENA underweight grows.
New Zealand Policy Rate 5.5% (consensus 5.5%) in May-24
- The RBNZ maintained its policy rate at 5.50%, in line with economic consensus, emphasizing the need for restrictive monetary policy to control inflation.
- Domestic inflation remains above the target range, driven by higher costs in non-tradable sectors; future rate decisions will depend on the pace of inflation reduction and adjustment of inflation expectations.
- Global economic growth remains subdued with variations among trading partners; cautious global monetary policy and labour market dynamics will significantly influence the RBNZ’s future interest rate trajectory.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Sweden Unemployment Rate 8.9% in Apr-24
- Sweden’s unemployment rate in April 2024 dropped by 0.3pp to 8.9%, partially reversing the rise from March.
- The rate remains above the one-year average.
- This indicates ongoing labour market challenges in Sweden.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
UK Inflation Excess Broadly Persists
- UK CPI inflation exceeded expectations again as it only slowed to 2.3% in April amid broad resilience in the core and services. The 3m-o-3m and 6m rates are back above 2%.
- Firms continue to agree and pass through wage increases inconsistent with a sustainable return to the target. UK inflation’s median monthly impulse remains stuck at 3%.
- We still see excessive underlying pressures persisting but recognise the BoE’s dovish bias. It may only postpone its premature rate cut until August on upside news.
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