In today’s briefing:
- US Inflation: Bad Enough for Powell to Change Course?
- Positioning Watch – Bye Bye Japanese Consensus Case?
- Security Token Journal: Bitcoins to the Mass
- Great Game: Cannibals in Haiti and Mediators in Istanbul
- US CPI Reaction: Headache for Powell not so much markets
- CX Daily: Survival of the Fittest — China’s Captive-Bred Pandas Get New Life in the Wild
- EQD / NSE Volatility Update / 04-Mar-24 to 08-Mar-24
- Are We Heading for a Volatility Event?
- Cross ASEAN Ground Zero – BNPL Is the New P2P, PropertyGuru’s Vulnerability, and Difficult Logistics
- US CPI Inflation 3.15% y-o-y (consensus 3.1%) in Feb-24
US Inflation: Bad Enough for Powell to Change Course?
- For the second consecutive month, inflation has exceeded expectations, raising questions about the ‘stickiness’ of core inflation.
- The real shocker was the Core Services, excluding Housing CPI, which increased to an eye-popping 6.8% on a three-month annualized basis.
- Most likely, the latest CPI numbers aren’t the catalyst that ends the stock market rally.
Positioning Watch – Bye Bye Japanese Consensus Case?
- Hello everyone, and welcome back to our weekly positioning watch, which today will start at the growing number of BoJ officials who are now supporting an exit from NIRP possibly already in March, sending Nikkei 225 down >2% in Asia hours yesterday, while China and China-proxies were bid – quite a surprising dynamic in Asian equities, which we won’t rule out to continue over the next weeks, as markets are likely shifting away from Japanese equities if a hike actually comes through.
- Our 250-day prediction from our PCA-tool (the blue line) has also been flagging the rally in Japanese equities, and now see a major divergence in the trend relative to the macro fundamentals, which has left a >2 standard deviations fair value gap, which seems likely to be closed via a retracement lower in Nikkei.
- Chart of the week: Our models have been bearish Japan since early 2024It looks like some parts of the markets had already sniffed out the slight overpricing of Japanese equities given risks of substantial moves in JPY-rates, and inflows into US-traded Japan ETFs have decreased since early February, while China ETFs began to see modest inflows, but has now went back into negative territory.
Security Token Journal: Bitcoins to the Mass
- The security token market, though, has slowly developed mainly due to declining risk appetites sparked by COVID-19 in 2020 and the Russian invasion of Ukraine on 24-February 2022.
- What has changed that led us to update readers on tokenization is the approval of Bitcoin ETFs
- The Bitcoin ETFs will be the first step to allow institutional investors to invest in cryptocurrencies. Next, we expect more ETFs of other well-known cryptocurrencies such as Ethereum (ETH).
Great Game: Cannibals in Haiti and Mediators in Istanbul
- Welcome to this week’s Great Game! We are still in waiting mode on a Gaza truce, which to be honest is baffling me.
- But in the meantime, let’s cover some current events and the potential effect on markets.
- Watch this article on video:Cannibals taking over Haiti?
US CPI Reaction: Headache for Powell not so much markets
- Today’s US CPI report was clearly hawkish on the surface, but looking closely, it is not all too demoralizing for those betting on continued risk-rallies and a path back to target.
- Clear path and further downside to OER according to Zillow and repeat rent.
- Though a modest surprise, components are not alarming albeit not helping Fed’s intentions.
CX Daily: Survival of the Fittest — China’s Captive-Bred Pandas Get New Life in the Wild
- Pandas / Cover Story: Survival of the fittest — China’s captive-bred pandas get new life in the wild
- Private /China’s private quant, bond funds outperform peers as stock market falters
- Payment /China pushes banks, Alipay and WeChat Pay to be more foreigner-friendly
EQD / NSE Volatility Update / 04-Mar-24 to 08-Mar-24
- New ATHs again in NIFTY50! But IVs move significantly lower! Holiday shortened week ahead.
- Vol Regime Model shifts clearly to “High & Down” state. Wait-and-see approach warranted on account of 3-day weekend.
- As of 01-Mar-2024 Weekly & Monthly BankNifty options will expire on Wednesdays.
Are We Heading for a Volatility Event?
- Throughout 2024, we’ve witnessed tight trading ranges across various markets: oil, FX, and Credit spreads.
- Notably, Semiconductors (light blue), Gold (depicted in blue), High-Yield OAS (in red), and Bitcoin (represented in black) exhibit remarkably similar chart patterns.
- In essence, these assets no longer offer diversification benefits; they have effectively become indistinguishable trades.
Cross ASEAN Ground Zero – BNPL Is the New P2P, PropertyGuru’s Vulnerability, and Difficult Logistics
- CrossASEAN Ground Zero is a new thematic weekly product that focuses on key Southeast Asian digital themes and technology trends with a core focus on Indonesia.
- This week we look at the changing fortunes of Fintech, as BNPL continues to show promise and P2P sinks deeper into difficult territory, exemplified by Investree’s troubles.
- We also examine PropertyGuru’s results, which reveal its vulnerability to markets and we look at Indonesia’s increasingly competitive logistics space, with a return to offline activity changing market focus.
US CPI Inflation 3.15% y-o-y (consensus 3.1%) in Feb-24
- US CPI inflation for February 2024 slightly exceeded expectations, recording a year-on-year rate of 3.15% and maintaining this pace for five months.
- Core inflation, which excludes volatile components, slowed to 3.8% year-on-year.
- This slowdown in core inflation surprisingly exceeded expectations by 0.1 percentage points, indicating a resilient underlying trend.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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