The recession narrative has returned after a series of weak PMIs. Betting against the returning recession hysteria has been a profitable strategy since April-2020, but will it be so again this time? Hallelujah!
The list of triggers for a material devaluation of the CNY keeps getting longer and action is probably imminent. The question is how markets will react to such an event and whether it will prove to be a new trend.
The embedded value in risk assets is improving, but the USD wrecking ball will continue into this week. The question is whether we have imminent action ahead from the BoJ/MoF or the PBoC as a consequence.
China is preparing for something major. That seems increasingly obvious judging from the stockpiling of important resources. Could it be that they are preparing a major one-off devaluation of the CNY?
The strong Chinese GDP numbers were overshadowed by a continued weakness in Asian FX trends. Energy and metals typically continue to perform in such an environment.
The strategic shift from Real Estate to Green-tech manufacturing in China is very evident and it will likely impact Europe to a much larger extent than the US. Counterintuitively, it means that two of the strongest inflation hedges stem from China and Mexico simultaneously. Here is why!
While we have booked profits in our long oil bets, we are getting increasingly bullish on the broader commodity complex. Especially a couple of metals look extremely interesting here.
The gap is growing between the US and peers. Both on inflation and unemployment. Will this lead to surprising rates decisions already this week? Meanwhile, we don’t think energy prices will drop because of Israel pulling out troops.
The BoJ delivered a historical hike – its first in 17 years – last week. Does this mark the turning point for Japan for good, or do risks still linger?
The Li Keqiang Index witnessed its most robust monthly surge since 2005 but consumer confidence is rotten?
Understand the paradoxes of the Chinese consumer in this explainer.
This week we hone in on the consequences of the Ukraine’s successful attacks on Russian refiners and how to play it along with some thoughts on our profit taking in metal space as something BIG is cooking in China!
China has been in the limelight recently, and the attention from clients match the evident rotation in managed positioning. While tremendously yielding, we’ve decided to de-risk in metals but keep overall cyclical exposure.
China’s vehicle of choice in achieving its growth targets has long been real estate. With RE still in shambles, will manufacturing be the stand in, and has the market in fact crowded out the China case?
>5% wage gains for the Rengo union members in Japan, which paves the way for policy action from the BoJ. Meanwhile, the PBOC refrained from cutting. Possibly as rate cuts are off the table in the US given the PPI developments?
Japan has reemerged as a feasible investment these last years, but is the driving force of this performance ebbing, as China returns to the table? A look at the relative winners and losers if China in fact is returning.
Sentiment in Japanese stocks has weakened ahead of a potential lift-off on front-end rates in March, while the JPY FX case looks compelling still. Meanwhile, Chinese sentiment is improving both directly and via proxies.
With China slowly emerging from the COVID abyss, what are their plans for economic recovery and long-term growth?
Takata from the BoJ has truly restarted speculations in action from the BoJ already in April as he labeled the inflation target as “coming into sight”. Meanwhile, the EUR-flation target may be coming into sight from the other direction despite lukewarm releases today.
Amidst some EARLY resurgence in China and signs of cyclical rebound, South Korea looks increasingly compelling. Could this convergence of factors signal a strategic entry point into South Korea’s manufacturing and AI-focused market?
Is China actually rebounding here? Oceanian central banks remain skeptical, while certain cyclical markets are starting to discount a slightly less abysmal Chinese scenario.
Japanese inflation has been trending clearly below 2% over the past 3-4 months and it seems like the so-called “inflation-problem” is non-existent in Japan. Meanwhile, China continues to look like a compelling case.
Was Tuesday’s aggressive stimulus just the PBoC’s latest desperate attempt, or was it in fact enough to get the distraught property sector and broader economy back on track? Our interpretation of the mixed signals here.
Big tech keeps surprising on the upside despite heightened expectations, while the Fed is moving closer to a tapering of QT. This makes for a benign scenario for the business cycle despite a lack of imminent rate cuts.
The Chinese authorities have stepped up their cutting game again, which may offer some short-term consolidation if continued. The spillovers to CNY, JPY and goods prices will be clear as well.
Chinese deflation is no longer as big an issue for the Western economy, while regional economies surrounding China will likely feel the consequences.
While all the hype in EM is about China these days, we are healthy skeptics. We’d like to see Beijing adopt a more structural approach to truly win us over, similar to what they’re doing in Turkey
Buy the fear and sell the hype is our overarching mantra in EM these days. Read how below!
Macro is on the move and we have diverging trends in inflation. Find our brief overview of the five themes that move markets the most this week in global macro.
Tensions are rising between the US and Iran as the Red Sea troubles are widening. Meanwhile, Evergrande is liquidated in China but with limited spill-overs.
Chinese equities with another strong session. Is it time to jump the bandwagon? Meanwhile, an expected non-event ECB meeting may not be completely sleepy.