In today’s briefing:
- Seasonality: September Is a Bad Month for ALL Risky Asset Classes
- CX Daily: China’s Offshore Wind Sector Gears Up for Life After Subsidies
- Rates Watch: Anything Weak Enough to Receive?
- ECB Watch: Damned if you do & doomed if you don’t?
- 5 Things We Watch – EU Inflation, US Labor Market, European Money Growth, UK Stagflation & IFO
- Silver Takes the Lead
Seasonality: September Is a Bad Month for ALL Risky Asset Classes
- August and September are the weakest for Equities relative to Treasuries. Staying out of equities during those months would have significantly improved the risk-return profile of a multi-asset portfolio.
- September high yield returns are mediocre at best, underpinning that the equity component of the asset class is the return-determining factor most of the time.
- September is the only month in which Bitcoin realized a negative return on average. Finally, Gold returns have been solid in September.
CX Daily: China’s Offshore Wind Sector Gears Up for Life After Subsidies
- Offshore wind /In Depth: China’s offshore wind sector gears up for life after subsidies
- Taiwan /Analysis: Foxconn founder’s independent leadership bid complicates Taiwan opposition efforts
- Corruption /: Ex-provincial chief, once in charge of China’s medical reform, caught in corruption probe
Rates Watch: Anything Weak Enough to Receive?
- It’s been an ongoing struggle to be on the receiving end of rates for a couple of years and we generally find the rule of thumb to be the following: Don’t ever tactically buy bonds / receive rates until the last hike is in.
- Conclusions up front: Inflation momentum is softening the most in Europe (also given today’s data)
- GBP rates looks like the best receiver case among majors
ECB Watch: Damned if you do & doomed if you don’t?
- As avid readers of our research will know we have been very skeptical of the situation in Europe and how safe the market has treated our own homeland these past months.
- When we zoom out and look at the current prints it is rather explicit that the Eurozone is falling behind on a relative basis: the severe energy supply shock, particularly pronounced in Europe (as detailed in my previous discussion on the topic), has been driving up costs.
- At the same time, real incomes continue to be eroded due to inflationary pressures.
5 Things We Watch – EU Inflation, US Labor Market, European Money Growth, UK Stagflation & IFO
- Welcome back yet again to our weekly ‘5 Things We Watch’, where we take you through 5 of the topics that we follow in global macro this week.
- We are in the middle of a hectic week for markets (as usual), with German Ifo numbers signaling a slowing economy in Germany, whilst EU CPI data tomorrow will paint European markets and give us a hint about what the ECB will do next.
- In the US it’s fair to say that this week is all about the labor market, which is THE thing to watch in order to understand what the Fed will do next as the tight labor market is one of the main areas of interest for Powell.
Silver Takes the Lead
- I don’t know who said it first, but I heard it from John Levin around the time of the credit crisis in 2008.
- John is one of the great gold traders who once worked at HSBC but moved home to Sydney and now heads the team at ANZ.
- His life ambition is to trade every single ounce of gold that has ever been mined. I’m not sure where he is with that.
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