This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. 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.
2. Potential Impeachment of President Yoon Suk-Yeol and Impact on the Korean Financial Markets
- In this insight, we discuss the potential impeachment of the South Korean President Yoon Suk-Yeol and the implications on the Korean financial markets.
- We would put a 50-60% probability that there is more than 200 votes to impeach the South Korean President Yoon Suk-Yeol right now by the members of the Parliament.
- We would attach about 30-40% probability that at least six justices of the Constitutional Court vote in favor of impeaching President Yoon.
3. The Week Ahead – Give Thanks For
- Trump announced potential tariff policies on social media targeting Canada and Mexico, leading to a weakening in both currencies.
- Trump appointed key members to his economic team, setting the tone for his administration’s policies.
- Markets are anticipating the Fed meeting in December, with expectations of a dovish hold and strong labor market reports.
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4. Positioning Watch – Markets have NOT been Ready for Growth to Weaken in the US
- Happy Thursday, and welcome to our weekly positioning watch, brought to you just before the crucial NFP report tomorrow.
- From what we see across markets, it looks like participants are starting to take risk off the table in equity space ahead of the report.
- Markets have struggled this week to settle on a clear narrative for USD assets, especially USD rates.
5. Europe Flash Watch – The German 2025 bazooka!
- In Germany, “debt hawks” are slowly but surely waking up to the reality of their manufacturing industry being brought to its knees.
- In Angela Merkel’s recent book, she pleads for a softer stance on the debt brake, and the political landscape in Germany seems to be softening on the “Schwarze Null” in general, with also the Buba member Nagel now advocating for a softer stance.
- The future government would need a two-thirds majority in the Bundestag and Bundesrat to change the debt brake.
6. What Is the Real Purpose of President Yoon’s Martial Law – To Reveal Election Fraud?
- One of the most important questions about the martial law three days ago is why did President Yoon send special forces (297) to the National Election Commission?
- President Yoon may have ordered troops to be deployed to the NEC to get to the bottom of the election fraud since all the important election servers are stored there.
- It is EXTREMELY DIFFICULT to prove an election fraud. Even if President Yoon declares a war on election frauds, he must have extraordinary pieces of data to back this up.
7. Steno Signals #128- I thought Trump and tariffs were supposed to lead to a bond riot?
- Happy Sunday, friends, and welcome to my straight-to-the-point editorial on everything macro!Just as everyone had concluded that Trump and his (alleged) trade wars would be bond-unfriendly, the bond market has started performing much better—exactly as we suggested would happen following the election results.
- The first major difference compared to 2016, when bonds rioted after Trump’s victory, is that Trump was the clear base case this time around.
- The second major difference is that Trump’s policy mix is not inflationary this time—in fact, it’s quite the opposite.
8. 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.
9. Geopolitical Flash Update – Bye Bye Barnier
- France sovereign debt reached a record €3.228 trillion, amounting to 112% of GDP in June, well above the 60% cap set by EU regulations.
- France growing debt have slowly been chipping away at investors’ confidence in French bonds.
- After Macron called a snap election in June resulting in a hung parliament, risk premiums on French 10-year bonds have shot up.
10. Here is What We Told Hedge Funds This Week—and How We’re Trading It!
- Happy Friday! Every week, we dive deep into macro trends, analyze asset movements, and uncover the best value plays in the world of macro.
- These insights are shared with hedge funds and institutional clients, and each Friday, we’re bringing them directly to you.
- While the macro landscape can be complex, we believe it doesn’t have to be intimidating.
