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: WK # 34… Fed Minutes, Turkey & Flash PMIs
Top of Mind…
- Happy Monday Folks & Welcome to WK # 34…
- Just as a quick heads up, the Dragon will be out after this wk & back-in Sep – got some necessary resetting needed, as well as a personal project that needs to be crushed
- Off to a brilliant start already on this beautiful Mon morning in the Asia Pacific, with runs under the belt, as well as some soul food for the mind. Its going to be a brilliant limitless wk, KVP can sense it
- What kind of week are you trying to have?
- 2nd heads up today we have the always exceptional & super experienced Ole Hansen (Commodities) with a Webinar that will be kicking off 19:00 SGT, if you are not already signed up, please do so here. KVP thinks oil only has one direction to go & that’s up… so things like RUB & BRL are looking especially interesting… not this is more medium to long-term view for now, still some INIL is in order. Ole has been on fuego this year, catching the massive sell-off in oil well ahead of others then the turn, as well as catching the lows of silver almost to the session. It helps that he is an ex CTA from London.
- And later on this wk on Aug 20, there will be a Currency Options Masterclass by APAC’s very own Mahesh Sethuraman, who also runs our Global Sales Trading team for the region. Mahesh background is very much SITG (Skin in the game), given his buyside background & pragmatic approach. And even if you don’t trade currencies, there is always something to take away from a good masterclass.
- Economics: Theme this wk is around minutes due from the RBA & FED, as well as inflation out of CA, UK & EZ, alongside Flash PMI Friday.
- Politics: With Biden Legacy almost certainly secured by playing QB to Obama & now also likely setting up Harris as the first black & Indian POTUS – assuming they win of course – its really going to come down to key three things: 1. Fiscal Stimulus Package 2. Development of C19 over next few wks & more importantly actual interpretation of that & 3. Social Instability – the paradox on the latter, is it could work to Trump’s advantage & the pathway for things getting calmer for now seems like a low probability. More chaos we get, happier Team Trump will be on “Law & Order” strategy – remember hierarchy of needs.
- Central Banks: Indonesia, Norway, Philippines, Turkey & Sri Lanka will have rate decision dues this wk. From an EM perspective – yet also undertones to the EZ & EUR potentially at some point – Turkey is likely to continue to be the focus, given the pressure on the currency that has been depreciating even against a globally weakening USD, plus the country running out of reserves. All of this ties back to the structural issues of Erdoganomics, lack of a credible central bank & finance ministry (i.e. it is his son-in-law), let alone sustainable strategic pathway for a country with amazing potential.
- Fed Speak: So far looks like only Bostic & Daly, yet with FOMC minutes due we may see more speakers popping up after if there seems to be a need to clarify things – would also expect that if US10s got to the 0.80-90bp lvls… don’t be surprised if we see action outside of the scheduled meetings. This could be in the form of jawboning the curve and/or outright YCC.
- Holidays: No major public holidays on the Macro schedule.
Start-to-End = Gratitude + Integrity + Vision + Tenacity. Process > Outcome. Sizing > Idea.
This is the way