Multi-asset Macro/Emerging Markets Strategist

Virgil Fernandez Esguerra

Thematic (Sector/Industry)

Our guide to this week’s global macro risk events and trading opportunities.<ul class="">
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This week in trade ideas: Go strategic long Norwegian Krone vs EUR and Saudi stocks. Stay short Italian stocks and bonds vs Stoxx 600 and Bunds. Consider fading Trump steel tariff news via relative value short US steel names vs Japanese peers. Stay strategic short Swedish Krona vs EUR. We stay constructive on JPY.</li>
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Monday: Markets digest Italy vote/Germany SPD referendum, Trump tariffs on steel. Also: Australia MI CPI…</li>
</ul>

Our guide to this week’s global macro risk events and trading opportunities.

This week in trade ideas: Go strategic long Norwegian Krone vs EUR and Saudi stocks. Stay short Italian stocks and bonds vs Stoxx 600 and Bunds. Consider fading Trump steel tariff news via relative value short US steel names vs Japanese peers. Stay strategic short Swedish Krona vs EUR. We stay constructive on JPY.

Monday: Markets digest Italy vote/Germany SPD referendum, Trump tariffs on steel. Also: Australia MI CPI…


Week Ahead in Global Macro: US NFP, Tariffs, ECB, BOJ, RBA, China NPC/CPI/Trade, BOC, BNM

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Steel stocks across Asia are down:<ul>
<li>Nippon Steel -4.2%</li>
<li>JFE -3.3%</li>
<li>Kobe Steel -3.3%</li>
<li>Nisshin Steel -2.7%</li>
<li>Posco -4.4%</li>
<li>Hyundai Steel -3.0%</li>
<li>China  Steel -1.6%</li>
<li>Baoshan -3.0%</li>
</ul>Except for a couple with US production facilities:<ul>
<li>Yamato Kogyo +2.9%</li>
<li>Bluescope +1.1%</li>
</ul>While Trump's announcement of significant taxes on steel (25%) and aluminium (10%) are a clear negative for exporters, more so from a deteriorating trade/supply demand environment than direct impact, we feel that 15-20% drops from the highs for these stocks is…

Steel stocks across Asia are down:
Nippon Steel -4.2%
JFE -3.3%
Kobe Steel -3.3%
Nisshin Steel -2.7%
Posco -4.4%
Hyundai Steel -3.0%
China  Steel -1.6%
Baoshan -3.0%
Except for a couple with US production facilities:
Yamato Kogyo +2.9%
Bluescope +1.1%
While Trump's announcement of significant taxes on steel (25%) and aluminium (10%) are a clear negative for exporters, more so from a deteriorating trade/supply demand environment than direct impact, we feel that 15-20% drops from the highs for these stocks is…

Kobe Steel released 3Q numbers yesterday and as we had previously pointed out, results were strong with construction machinery in particular being very strong and the company revised up current profit guidance from JPY50bn to JPY60bn (still very conservative as 9 month CP was JPY62bn) and reissued NP guidance at JPY45bn (previous guidance was JPY35bn but was retracted following the scandal in the Aluminum and Copper segment). The stock had fallen as much as 43.5% from JPY1,368 to an intraday low…

Kobe Steel released 3Q numbers yesterday and as we had previously pointed out, results were strong with construction machinery in particular being very strong and the company revised up current profit guidance from JPY50bn to JPY60bn (still very conservative as 9 month CP was JPY62bn) and reissued NP guidance at JPY45bn (previous guidance was JPY35bn but was retracted following the scandal in the Aluminum and Copper segment). The stock had fallen as much as 43.5% from JPY1,368 to an intraday low…

After 50% Rise From Bottom Can Kobe Steel Rise Another 50%?

<a href="https://www.smartkarma.com/entities/17272" target="_blank" data-smartkarma-citation="entities:17272:1">Mitsubishi Materials Corp (5711 JP)</a> announced on Thu 23 Nov that two subsidiaries had falsified data on products involving over 250 customers in the aerospace, automotive, general industry and electronics industries. Mitsubishi Cable and Mitsubishi Shindoh falsified data on seal materials (O-rings) and brass/copper products respectively. The issue appears more serious at Mitsubishi Cable as about JPY6.8bn worth of non-conforming product was delivered over the span of two and half years (9% of…

Mitsubishi Materials Corp (5711 JP) announced on Thu 23 Nov that two subsidiaries had falsified data on products involving over 250 customers in the aerospace, automotive, general industry and electronics industries. Mitsubishi Cable and Mitsubishi Shindoh falsified data on seal materials (O-rings) and brass/copper products respectively. The issue appears more serious at Mitsubishi Cable as about JPY6.8bn worth of non-conforming product was delivered over the span of two and half years (9% of…

Mitsubishi Materials Latest to Suffer Quality Scandal, Can Dowa Holdings Benefit?

We visited <a href="https://www.smartkarma.com/entities/209" target="_blank" data-smartkarma-citation="entities:209:1">Kobe Steel Ltd (5406 JP)</a> this morning to get an update on customer reactions to its data falsification scandal and whether the company has begun to see any clear impact from its scandal. In addition, we were able to get an update on current conditions within its various segments and discuss some potential future growth products such as gas compressors which could benefit from Japan's drive to turn itself into a hydrogen society.<h2>To begin with, further details on the data falsification</h2>…

We visited Kobe Steel Ltd (5406 JP) this morning to get an update on customer reactions to its data falsification scandal and whether the company has begun to see any clear impact from its scandal. In addition, we were able to get an update on current conditions within its various segments and discuss some potential future growth products such as gas compressors which could benefit from Japan's drive to turn itself into a hydrogen society.To begin with, further details on the data falsification…

Kobe Steel: Visit Suggests Limited Fallout From Scandal, Upside to Guidance

Japan

Kobe Steel, Ltd. is a steelmaker, as well as a supplier of aluminum and copper products.  The products include steel plates and steel rods.  The Company also operates other businesses such as welding consumables, urban infrastructure, plant engineering, and industrial & construction machinery.  Kobe Steel has operating offices in the US, Europe, and Asia.

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Kobe Steel Ltd (5406 JP)

Week Ahead in Global Macro: US NFP, Tariffs, ECB, BOJ, RBA, China NPC/CPI/Trade, BOC, BNM

Our guide to this week’s global macro risk events and trading opportunities. This week in trade ideas: Go strategic long Norwegian Krone vs EUR...

Virgil Fernandez Esguerra

JFE: We Would Fade the Trump Tariff

Steel stocks across Asia are down: Nippon Steel -4.2% JFE -3.3% Kobe Steel -3.3% Nisshin Steel -2.7% Posco -4.4% Hyundai Steel -3.0% China Steel...

Mio Kato

After 50% Rise From Bottom Can Kobe Steel Rise Another 50%?

Kobe Steel released 3Q numbers yesterday and as we had previously pointed out, results were strong with construction machinery in particular being...

Mio Kato

Mitsubishi Materials Latest to Suffer Quality Scandal, Can Dowa Holdings Benefit?

Mitsubishi Materials Corp (5711 JP) announced on Thu 23 Nov that two subsidiaries had falsified data on products involving over 250 customers in...

Mio Kato

Kobe Steel: Visit Suggests Limited Fallout From Scandal, Upside to Guidance

We visited Kobe Steel Ltd (5406 JP) this morning to get an update on customer reactions to its data falsification scandal and whether the company...

Mio Kato

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