In today’s briefing:
- US Bank Watch – 3 Arguments for the Inevitability of More Banking Failures
- The Week That Was in ASEAN@Smartkarma – Deltamas on Form, Metrodata Enabling Digital, and DBS & Oil
- ECB Watch: 4 Charts to Watch on the ECB Pricing
- El Nino is here // River Rhine is drying up again // Managers are net short commodities
- US Interest Rates- Headwinds and Tailwinds
US Bank Watch – 3 Arguments for the Inevitability of More Banking Failures
- Sticky core inflation, bounce in housing and AI mayhem are all reasons for higher for longer rates
- Banks have no way of competing against the rates at money market funds, leading to a slow withdrawal of deposits
- Smaller banks are likely to suffer, as confidence will remain stronger at bigger banks
The Week That Was in ASEAN@Smartkarma – Deltamas on Form, Metrodata Enabling Digital, and DBS & Oil
- The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
- The past week saw insights on Puradelta Lestari (DMAS IJ), PT Metrodata Electronics (MTDL IJ), DBS (DBS SP), and Pertamina Geothermal Energy (PGEO IJ).
- There was also a thematic insight looking at Vietnamese banks, an insight looking at the SET50 rebalance which will see a benefit for financials and real estate.
ECB Watch: 4 Charts to Watch on the ECB Pricing
- The ECB will likely have to adjust inflation forecasts down again based on today’s information
- We find that data surprises are likely to tilt to the downside in Europe
- Will the positive European consensus narrative start to suffer over summer?
El Nino is here // River Rhine is drying up again // Managers are net short commodities
- El Nino is here (like we forecasted) S&P Global highlighted some facts regarding the effects of the weather phenomenon on crop yields.
- I found the following chart about soybean yields quite interesting and also important going forward.
- Makes one think how sustainable last week’s price surge in beans actually is!!! El Nino tends to be good for soybean yields in Argentina and Brazil but also in the US.
US Interest Rates- Headwinds and Tailwinds
- The base forming thesis Since 16th May, yields have moved to a higher band, likely marking the end of the correction.
- Bond rallies have had shorter lifespans and have tended to retrace rallies.
- Plenty of data points to economic headwinds and the additional threat of a sharply slowing Chinese economy, keeping a lid on higher yields.
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