Daily Brief Macro: Speadbites: Food for Credit Market Thought as We Head Into the Holidays and more

• Global credit ecosystem remains stable, similar to 2024 outlook
• Tight spreads and low all-in yields support demand in credit markets
• Concerns about non-cash accrual companies in private credit portfolios and potential impact on risk distribution from public to private markets, but overall sentiment remains positive for credit markets.

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

• Welcome to my weekly editorial, where I assess the big-picture macro landscape, explore potential risks, and identify the next narrative for traders.
• Last week, I kept getting pings, rings, and dings from traders eager to discuss whether inflation is poised to make a comeback following the fourth consecutive hot inflation report in the U.S. Admittedly, we’re trending around 3.5% inflation on an annualized basis, which doesn’t look great amidst a cutting cycle.
• Consequently, the market has started repricing the inflation outlook, with the near-term (2-year) outlook once again outpacing the 10-year inflation outlook in inflation swaps.

• The US oil and gas rig count remained unchanged at 589 for the week ending on 13/Dec, after rising by seven the previous week.
• For the week ending 06/Dec, US oil production rose to a new high of 13.63m bpd from 13.50m bpd the week prior.
• The number of active US oil rigs was steady at 482, while the US gas rig count rose by one to 103.

• Over the last week, the FTSE ALL World equities index stalled slightly, losing 0.8% in value, with the FTSE ALL Share index losing a tad more, down a smidgeon under 1%.
• Tech stocks again outperformed, sending the Nasdaq 1.5% higher and taking the index to over 20,000 for the first time ever.
• The S&P 500 edged 0.5% lower, and the Russell 2000 ended the week 2% down. The Magnificent 7 hit new highs as the market-broadening trend evaporated.

• The past week saw insight on Indosat (ISAT IJ), Mitra Adiperkasa (MAPI IJ), Global Digital Niaga Tbk PT (BELI IJ), Singapore Post (SPOST SP), and IHH Healthcare (IHH MK). 
• There was also a macro insight on Vietnam as well as an index rebalancing piece from Brian Freitas on the Vietnamese market. 
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated substantive, and actionable insights, macro and equity bottom, from across Southeast Asia.

• WTI futures rose 6.1% for the week ending 13/Dec, driven by China’s policy easing plans and supply concerns from sanctions on Russia and Iran.
• WTI options Put/Call volume ratio fell 1.15 from 1.24 (06/Dec) last week, as call volume rose by 21.7% WoW while put volume increased by 12.6%.  
• WTI OI PCR fell to 0.85 from 0.88 last week. Call OI rose by 7.0% WoW, while put OI increased by 3.3%.

• January-October 2024 exports yield US$2.54 billion, up 17% YoY
• 405% rise in value YoY in exports to Malaysia during Jan-Oct 2024
• Michelin plans to source rice husks from Vietnam for tire-making

• Flash PMIs for December broadly exceeded expectations in the services sector, with the UK and EA rebounding and the US surging to highs more consistent with hikes than cuts.
• A slight trend rise in the US unemployment rate suggests strength is partly structural but could be noise around cyclical strength. Global rates still don’t look tight.
• We still expect persistent underlying price and wage inflation to truncate easing cycles earlier than most expect, following the norm for cuts without recessions, like in 1998.

• The Syrian civil war has consequences that extend far beyond its immediate vicinity.
• The potential collapse of the Assad regime could significantly impact global issues, including the Russia/Ukraine conflict.
• This collapse could also affect Germany’s debt ceiling reform prospects and the oil industry.

• The UK economy has recently shown signs of stabilizing after a period of stagnation, with a modest uptick in household spending and business investment.
• Government spending and public investment have also provided a temporary boost, contributing to a more positive short-term outlook.
• Nevertheless, multiple risks persist as geopolitical tensions, volatile energy markets, and uncertain global trade conditions continue to threaten stability, while changes in foreign economic policies could weigh on business and consumer sentiment.