In today’s briefing:
- South Korean Parliament Lifts Martial Law Declared by the President Yoon
- November Themes and Thematic Portfolio Review
- The Week at a Glance: Manufacturing Rebound, Fed Liquidity Signals & Oil’s Fragile Balance
- CX Daily: Chinese Chipmakers Look to Malaysia to Sidestep U.S. Tariffs
- [US Crude Oil Options Weekly 2024/48] WTI Drops on Easing Supply Concerns
- IO Weekly Technicals Review [2024/48]: Bullish Trend to Persist
- [US Nat Gas Options Weekly 2024/48] Henry Hub’s Uptrend Continues on Bullish Demand Outlook
- UK Revisions Raise Inflationary Pressure
- BDI at the Lows of Year 2024 Trading Range
South Korean Parliament Lifts Martial Law Declared by the President Yoon
- Late Tuesday on 3 December, South Korean President Yoon Suk-Yeol declared a martial law. Several hours afterwards, the South Korean Parliament voted to lift President Yoon’s martial law order.
- By drawing so much attention to the “dangers of the communist party from within Korea and outside,” President Yoon is trying to align himself closer to President Trump.
- In the near term, the impact on the Korean stock market of the declaration and lifting of martial law is likely to be negative.
November Themes and Thematic Portfolio Review
- A monthly review of how the markets and our themes are currently performing
- Analysing what went wrong and what went right in stocks and sectors
- Highlighting positions added or removed from the thematic investment portfolio
The Week at a Glance: Manufacturing Rebound, Fed Liquidity Signals & Oil’s Fragile Balance
- Happy Monday!Each week, we collect the most important events in the week ahead and provide you with our direction going into them.
- Enjoy!Monday – ISM ManufacturingThe ISM Manufacturing data is due this afternoon, with consensus expecting a rebound from last month’s report, forecasting a figure of 47.6. After reviewing our model library, we see substantial risk/reward in betting on an upward surprise in manufacturing data.
- For instance, our regional PMI model—which uses regional manufacturing prints as inputs—indicates a material increase in the manufacturing PMI today.
CX Daily: Chinese Chipmakers Look to Malaysia to Sidestep U.S. Tariffs
- Chips / Cover Story: Chinese chipmakers look to Malaysia to sidestep U.S. tariffs
- Forestry /: Environmentalists sound alarm over China’s relaxed forest rules
- PMI /: China manufacturing activity continues to build up steam, Caixin PMI shows
[US Crude Oil Options Weekly 2024/48] WTI Drops on Easing Supply Concerns
- WTI futures dropped 4.6% for the week ending 29/Nov, driven by easing Middle East tensions and higher US gasoline and distillate inventories.
- WTI options Put/Call volume ratio fell to 0.82 from 0.87 (22/Nov) last week, as call volume fell by 17.9% WoW and put volume dropped by 22.4%.
- WTI OI PCR inched up to 0.88 from 0.86 compared to last week. Call OI rose by 1.3% WoW, while put OI increased by 4.5%.
IO Weekly Technicals Review [2024/48]: Bullish Trend to Persist
- SGX IO Futures closed USD 4.17/ton higher for the week ending on 29/Nov. It traded in a range of USD 5.05/ton, which was smaller than the prior week.
- Chinese portside inventories fell 1.5% to 148.5M tons for the week ending 29/Nov. China’s manufacturing PMI for November came in at 50.3, beating analyst expectations of 50.2.
- Seasonally strong demand ahead of the Lunar New Year, improving steelmaker conditions, stimulus hopes, and robust PMI signal continued iron ore price gains.
[US Nat Gas Options Weekly 2024/48] Henry Hub’s Uptrend Continues on Bullish Demand Outlook
- US natural gas prices rose 7.5% for the week ending 29/Nov, driven by forecasts of colder weather, rising US LNG exports, and higher heating demand.
- Henry Hub Put/Call volume ratio rose to 1.47 from 1.14 (22/Nov) the previous week as put volumes fell by 56.1% WoW, while call volumes decreased by 66%.
- Henry Hub OI PCR fell to 0.83 from 0.84 compared to last week. Call OI fell by 14.4% WoW, while put OI decreased by 15.8%.
UK Revisions Raise Inflationary Pressure
- Updated UK population estimates and projections drove a 402k upward revision to the employment level while unemployment was broadly unchanged.
- With output and wages unaffected, productivity was weakened into a slight trend decline while implied unit wage costs are 1.3pp higher and stuck above 5% y-o-y.
- Full typical passthrough to consumer prices reinforces the underlying inflation problem. The BoE should discount labour market data and cautiously hold rates in December.
BDI at the Lows of Year 2024 Trading Range
- The Baltic Dry Index (BDI)* settled at around ~1,354.00 points (USD) on December 2nd, 2024 versus ~1,947.00 points (USD) in the beginning of September 2024, which was the release date of our previous blog.
- During the year 2024, the BDI has been trading within the broader range of 1,200 – 2,500 with continuous notable swings along a relative downward trend line.
- In the same period, and so far in the year, the Index has recorded a low on January 17th at 1,306 and a high on March 13th at 2,412.
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