Independent Insight Provider

Stewart Paterson

Taurus Advisors LLP

Macroeconomics

<p>Having broken convincingly through 100, the DXY (trade weighted dollar index) has pulled back in the past few days to test its break. The Italian referendum, as expected, produced a bad outcome for believers in the single European currency but as it turns out it was so widely expected that it triggered short covering in the Euro. I would highlight a few data points in the next few days that may add to dollar strength, cement the break-out in the DXY and lead to an acceleration in the up-trend in…</p>

Having broken convincingly through 100, the DXY (trade weighted dollar index) has pulled back in the past few days to test its break. The Italian referendum, as expected, produced a bad outcome for believers in the single European currency but as it turns out it was so widely expected that it triggered short covering in the Euro. I would highlight a few data points in the next few days that may add to dollar strength, cement the break-out in the DXY and lead to an acceleration in the up-trend in…

Money Matters: Short-Term Dollar Catalysts.

Founder and Strategist, Entext Economics & Strategy

Sean Maher

Founder and Strategist

Entext Economics & Strategy

Entext provides institutional investors with distinctive, actionable asset allocation and thematic research, which typically challenges the market consensus. Our clients range from credit, equity and multi-asset hedge and pension funds to family offices and sovereign funds. 
 
We focus on identifying key inflection points in macro data and relative asset performance amid the 'groupthink'  and confirmation bias that characterizes most investment bank analysis.

Macro Driven Investment Insight

Thematic (Sector/Industry)

<ul>
<li><div>We saw consensus ‘groupthink’ reach new levels in 2016, exacerbated by surging AUM managed in trend following style.</div></li>
<li><div>Extrapolation remains the default forecasting tool for most professional opinion and Japan has been a case in point over the past 18mths.</div></li>
<li><div>The USDJPY saw its biggest two-week move since 1988 post the US election, as quant funds retreated from record speculative long positions.</div></li>
<li><div>
<span lang="EN-US">Foreign investors bought almost $8bn of Japanese stocks in the past two weeks, reducing their net selling</span>…</div></li>
</ul>


We saw consensus ‘groupthink’ reach new levels in 2016, exacerbated by surging AUM managed in trend following style.
Extrapolation remains the default forecasting tool for most professional opinion and Japan has been a case in point over the past 18mths.
The USDJPY saw its biggest two-week move since 1988 post the US election, as quant funds retreated from record speculative long positions.

Foreign investors bought almost $8bn of Japanese stocks in the past two weeks, reducing their net selling…


Consensus Rethinks Japan, as Serial Extrapolation Proves Costly

<p> Over the past five years or so, since the RMB moved into over-valuation territory, there has been a consistent and inverse relationship between the RMB and US bond yields. RMB strength has been associated with rising US bond yields while RMB weakness has been associated with falling bond yields. The rationale should be apparent but as RMB weakness is associated with the potential for Chinese exporters to lower their USD prices (and incidentally reduce Asian corporate earnings outside of China)…</p>

 Over the past five years or so, since the RMB moved into over-valuation territory, there has been a consistent and inverse relationship between the RMB and US bond yields. RMB strength has been associated with rising US bond yields while RMB weakness has been associated with falling bond yields. The rationale should be apparent but as RMB weakness is associated with the potential for Chinese exporters to lower their USD prices (and incidentally reduce Asian corporate earnings outside of China)…

Money Matters: US Bond Yields & USD/RMB - A Paradigm Shift?

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

<p>§ <span class="apple-converted-space"> </span><strong>As many as 9 STI Stocks have traded more than double their three month daily average volume in trading sessions for the early week of 21 November.</strong></p><p style="text-align: start;">§ <span class="apple-converted-space"> </span><strong>Biggest volume surges were generated by Genting Singapore PLC which traded almost 5x its average volume on Monday, and StarHub which traded 4x its average volume on Monday – then 3x its average volume on Tuesday.</strong></p><p style="text-align: start;">§ <span class="apple-converted-space"> </span><strong>The 9 Stocks, which represent five Sectors have together averaged a 1.5% gain in the November MTD, bringing their 2016 YTD average</strong>…</p>

§  As many as 9 STI Stocks have traded more than double their three month daily average volume in trading sessions for the early week of 21 November.§  Biggest volume surges were generated by Genting Singapore PLC which traded almost 5x its average volume on Monday, and StarHub which traded 4x its average volume on Monday – then 3x its average volume on Tuesday.§  The 9 Stocks, which represent five Sectors have together averaged a 1.5% gain in the November MTD, bringing their 2016 YTD average…

Nine STI Stocks See Volume Surge in Early Week

<p>The trade weighted dollar Index is within a whisker of breaking out of its two year long consolidation phase. There are two fairly imminent catalysts that could give the dollar a final push through resistance and lead it to trend higher: The Italian referendum on constitutional reform on 4th December and the FOMC meeting on December 14th. </p><p>Although in theory the Italian referendum actually has nothing to do with Italy's continued membership of the Eurozone and hence the EU (remember Greece was…</p>

The trade weighted dollar Index is within a whisker of breaking out of its two year long consolidation phase. There are two fairly imminent catalysts that could give the dollar a final push through resistance and lead it to trend higher: The Italian referendum on constitutional reform on 4th December and the FOMC meeting on December 14th. Although in theory the Italian referendum actually has nothing to do with Italy's continued membership of the Eurozone and hence the EU (remember Greece was…

Money Matters: The Road to Italeave and a Dollar Break-Out?

China

PICC Property & Casualty is the largest non-life insurance company in mainland China, providing a broad range of property and casualty insurance products. Its offerings include motor vehicle, commercial property, cargo, liability, accidental injury and health, agriculture, credit, surety, and homeowners insurance. The company also offers reinsurance and insurance agency services. It is headquartered in Beijing, China, and was incorporated in 2003.

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PICC Property & Casualty (2328 HK)

Money Matters: Short-Term Dollar Catalysts.

Having broken convincingly through 100, the DXY (trade weighted dollar index) has pulled back in the past few days to test its break. The Italian...

Stewart Paterson

Consensus Rethinks Japan, as Serial Extrapolation Proves Costly

We saw consensus ‘groupthink’ reach new levels in 2016, exacerbated by surging AUM managed in trend following style. Extrapolation remains the...

Sean Maher

Money Matters: US Bond Yields & USD/RMB - A Paradigm Shift?

Over the past five years or so, since the RMB moved into over-valuation territory, there has been a consistent and inverse relationship between...

Stewart Paterson

Nine STI Stocks See Volume Surge in Early Week

§ As many as 9 STI Stocks have traded more than double their three month daily average volume in trading sessions for the early week of 21...

Singapore Exchange Ltd (SGX)

Money Matters: The Road to Italeave and a Dollar Break-Out?

The trade weighted dollar Index is within a whisker of breaking out of its two year long consolidation phase. There are two fairly imminent...

Stewart Paterson

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