Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.
(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)
Macro Dragon: Watch the Potential China GDP Beat
Top of Mind…
- China data has been beating & beating strongly for quite a while now. So today, in addition to the key monthly growth numbers (IP, RS & FaI), we also have 2Q GDP due at 2.4% at 10:00 SGT/HKT/CTD. This would be significantly above the 1Q -6.8% contraction
- Usually suspects to watch on a beat – or miss – as always will continue to be Aussie crosses, USDCNH & of course CH + HK equities & credit.
- Both AUDUSD 0.7000 & USDCNH 6.9879 (What trade deal beak risk?) are at very interesting levels… the price action on both charts is very bearish for the dollar…
- …which also brings us to the DXY at 96.00, a key weekly close south of 96 should be the last nail in the coffin for the remaining USD bulls out there. We took out the key 200WMA of c. 96.50 a while back & even into the last month/quarter/half close the greenback could not really sustain a rally.
- On the Dragon we’ve been dollar bears for months & feel we are in the midst of a cyclical turn in USD strength, that could see DXY extend well below the 86 avg. lvl for the period since 2008. You all know our take on gold, silver & the precious metals complex… yet have you seen the silver chart lately? Party-time! Looks like we are experiencing our next break-out level higher.
- Outside of China GDP, Aussie jobs data will also be key & of course later today we have the ECB.
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