1. Global Liquidity On The Rise: Is This Gold’s (And BitCoin’s) Breakout Moment?
- High street inflation could fall in 2024 and real interest rates stay high, but the gold price and BitCoin (BTC$) may still break higher
- Gold has a 1.5-1.6 times sensitivity factor to the growth in Global Liquidity. BitCoin is a whopping 5 times this! It is ‘exponential gold’
- Global Liquidity looks set to double in size over the next decade driven by soaring World debts. Alongside, the US dollar has been eclipsed as the marginal World reserve asset
2. FSS Provides Further Details of Korean Companies That Plan to Change Dividend Payout System in 2024
- FSS provided further details as to the number of Korean companies that plan to change their dividend payout system to their shareholders in 2024.
- There are 636 companies out of a total 2,267 listed companies in Korea (28%) that have confirmed that they will change their dividend payout system starting 2024.
- As listed companies set different voting rights and dividend record dates from the end of the year, investors need to check the dividend record date and dividend amount before investing.
3. The Fate of Quantitative Tightening: Not Solely in the Hands of the Fed
- The twin pillars that underpinned US monetary policy since the global financial crisis made policy normalisation difficult. Investors believe quantitative tightening (QT) ceases once the federal funds rate is lowered.
- Contrary to the fears encountered during the taper tantrum in 2013, QT has not dramatically tightened US financial conditions since 2017, thereby raising questions about whether any cessation is required.
- High levels of bank reserves do not guarantee financial stability, but elevated Treasury borrowing and lower repo market liquidity pose threats that could ultimately force the Fed to end QT.
4. Positioning Watch – Everything better turn out the way markets want it
- Hello everyone, and welcome back to our weekly positioning watch, where we dig into everything positioning and sentiment-related.
- This week will be all about equities and fixed income, which seems to be running the show at current junctures – just give the gold chart a look, which jumped some 2% on the back of pivot hopes and strong buying activity this morning during Asian hours, while sellers were nowhere to be seen, but fast-forwarding 10-11 hours, gold is now down somewhere near 0.2%.
- A huge turnaround in markets which smells a lot like a short-squeeze or tight liquidity in the Asian markets today.
5. Steno Signals #76: The Fed Has Lost Control of Liquidity Trends
- Happy Sunday from frosty Copenhagen and welcome to our flagship editorial! The underlying demand trends are not strong.
- Running credit card data has been weak in October/November, the credit impulse is worsening and there are signs of actual labour market softening around the otherwise sticky service sectors in the West, yet markets are partying like there is no tomorrow.
- What is causing this disconnect and could it continue into the year-end?
6. 5 Things We Watch – Liquidity, Bond positioning, Oil, Consumer spending & Rates
- We’ve spent the past 2 days in London, meeting clients and hedge funds, and there was a lot of support for the idea/notion that SOFR-Fed Funds spreads reveal that USD Liquidity is not ample and that the Fed will have to end QT early.
- The spread widening in SOFR – Fed Funds, caught a lot of attention over the past few days and it is interesting how swiftly the market jumps to the conclusion that it will lead to the Fed panic-ending QT already in Dec or January.
- Why are SOFR – Fed Funds spreads widening and how do we deal with it?
7. Mint Macro Roundup: Dissecting The Recent Jobs Data
- Nonfarm payrolls showed 199k jobs added, higher than October and above expectations; Unemployment fell to 3.7% but wage growth strong at 4% YoY.
- Earlier this week, JOLTs survey showed job opening slide 6.7% to 8.73 million, lowest in 2.5 years with jobs declining across industries.
- Job market observed to be loosening and on-track to achieving soft-landing. going forward, it’s vital to watch for job losses.
8. The Week That Was in ASEAN@Smartkarma – Indofood’s On Track, ROTI’s Rising, and BliBli’s Omnichannel
- The past week has seen insights on Indofood CBP Sukses (ICBP IJ), PT Nippon Indosari Corpindo (ROTI IJ), Global Digital Niaga (BELI IJ), OCBC (OCBC SP) and Vinfast (VFS US).
- There were also macro insights on the Philippines and Vietnam from Manu Bhaskaran and insights on Leader Energy IPO, Mkh Bhd, Vale Indonesia, Aneka Tambang, Bank Tabungan, and Medco Energi.
- 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 Southeast Asia.
9. India Politics: State Elections Show Favourable Political Winds for Modi
- Premier Modi’s BJP outperformed expectations by winning three state assembly elections, putting it in prime position for re-election in the 2024 general election.
- Modi’s personal appeal and welfarist policies will likely deliver dividends in the next elections. But a landslide win is far from guaranteed given the political dynamics.
- The government will thus avoid rocking the boat in terms of economic policy.
10. The Market Meaning of a Gold Breakout
- Gold bulls became very excited when gold tested resistance at the 2000–2100 level. We have been more interested in the drivers of gold strength than trying to forecast gold itself.
- Our analysis indicates that gold is rising on expectations of falling real rates, which also depresses the USD.
- These factors should be bullish for the price of risky assets. Specifically, we would focus on financials and other early market cycle groups.
Weekly Top Ten Macro and Cross Asset Strategy
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