Marlon Marcos

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. HEW: Payrolls Waking Up Rates Pricing

Dovish rate pricing had been ignoring resilient data until US payrolls delivered a rude awakening. We believe rates remain too dovish relative to reality and equity prices.
BoE surveys also revealed resilience in defiance of dovish pricing, while the rise in EA unemployment merely matched ECB forecasts and was heavily reliant on Italy.
Next week’s deadline for US tariffs is the main risk event, as not all countries will likely get an extension. Monetary policy decisions come from the RBA, RBNZ, BNM, and BOK.

2. Mid-Year Themes Review – Part I

How did our major investment themes do so far in 2025?
Review of the performance of the major markets and asset classes we focus on
We revisit our outlook for each of those asset classes for H2 25

3. BoE Surveys Sustain Resilience

The Decision Maker Panel and Credit Conditions Surveys remained resilient. Price and wage inflation are stuck at excessive levels, and US trade policy makes little difference.
Default rates are falling while the availability and demand for credit are rising to reveal a loosening of monetary conditions. There is no evidence of policy being too tight.
Inflation and labour market data matched BoE forecasts from May, when most members were biased to slow easing. Resilient surveys should discourage it from cutting again.

4. Oil: Revisiting My Forecast

Oil supply is projected to outpace demand growth through 2026, leading to rising inventories and sustained downward pressure on Brent crude to below USD60pb.
Opec+ output increases, quota disputes (especially with the UAE), and the potential unwinding of voluntary cuts could further flood the market.
US shale producers and international oil companies are reducing investment due to lower prices, but current Brent levels are not yet low enough to force significant cuts.

5. Korean Holdcos Vs Opcos Gap Trading Opportunities in 3Q 2025

In this insight, we highlight the recent pricing gap divergences of the major Korean holdcos and opcos which could provide trading opportunities in 3Q 2025.
A whopping 87% (33 out of 38) holdcos/quasi holdcos outperformed their opco counterparts in the past three months, which is one of the best ever in the past two decades.
This appears to be one of the classic “buy the rumor, sell the news” trading opportunities.

6. Gap Trade Opportunities in Korean Prefs Vs Common Share Pairs in 3Q 2025

In this insight, we discuss numerous gap trade opportunities involving Korean preferred and common shares in 3Q 2025.
In particular, five pairs of common and preferred stocks have experienced more than 20% widening of their share prices in the past six months.
These companies (Doosan Corp, Mirae Asset Securities, KIS Holdings, Daishin Securities, and LG Chem) are more likely to revert to closing their gaps in the coming weeks.

7. EA: Calm At The Inflation Target

By Said Desaque, DeSaque Macro Research

An unsurprising achievement of the 2% target might urge a celebration at the ECB, but it does not demand policy action. Energy price declines can’t be relied upon to repeat.
The early consensus forecast was surprised on the upside, but raised by last week’s releases in France and Spain. So, while reassuring, this outcome is not dovish.
We expect inflation to stay close to the target, whereas the ECB forecasts a substantial drop below it, while calling policy well-positioned. We still see no more rate cuts.

8. Calm Before the Currency War? Central Banks Go Their Separate Ways

European central banks have embraced a more preemptive approach compared to the Fed in responding to the looming arrival of tariffs under the Trump administration.
The Bank of Japan refuses to raise interest rates, despite rising core consumer price inflation, due to uncertainty about tariff negotiations with the US. Quantitative tightening will pared in 2026.
The People’s Bank of China (PBoC) has only modestly lowered policy rates. The Fed’s future policy rate cuts could determine the timing and scope of future PBoC policy easing.

9. Mid-Year Themes Review – Part II

By Manishi Raychaudhuri, Emmer Capital Partners Limited

How did our major investment themes do so far in 2025?
Review of the performance of the major markets and asset classes we focus on
We revisit our outlook for each of those asset classes for H2 25

10. H2 ’25 Outlook: Modest H2 After Strong H1. Themes: Trade, Consumption, Tech Spending, Yields

In H1, Asia climbed several walls of worry. Valuations are slightly higher than long-term average. H2 could be more modest, as export driven growth moderates and trade agreements become contentious.
Our end-2025 targets are: MXASJ 850, SHCOMP 3760, Sensex 85000, HSI 26000, KOSPI 3400, TWSE 23500, Strait Times 4200, JCI 7450, SET 1150. Overweights on Korea, HK/China, India, continue.
Asian currencies should continue to appreciate, driving more FII flows. Benign inflation and headroom for monetary easing are key tailwinds. We expect two rate cuts by the Fed in 2025.

Jun 29

Weekly Top Ten Macro and Cross Asset Strategy – Jun 29, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. Defence Spending Is Not Stimulative

NATO raised its target for defence spending to 5% of GDP, with Spain opting out. This increases pressure for tighter monetary conditions than were otherwise appropriate.
Defence spending offers weak growth multipliers, so the policy is more likely to stoke deficits than productivity. Central banks may respond with a more hawkish stance.
With debt levels already high, the move risks crowding out other spending and lifting sovereign risk premiums. Bond yields suffer from higher deficits and future rates.

2. Israel/Iran/US: Ten Pointers

Recent events have highlighted the difficulty in predicting the progression of the Iran/Israel conflict.
Despite this, the volatility caused by these headlines has not significantly impacted market perspectives.
The supply/demand equation remains the primary influence on market thinking regarding oil.

3. Top 10 Korean Stock Picks and Key Catalysts Bi-Weekly (20 June to 4 July 2025)

In this insight, we provide the top 10 stocks picks and key catalysts in the Korean stock market for the two weeks (20 June to 4 July 2025).
Kakaopay was the best performing stock in KOSPI in the past two weeks. It could be a key potential beneficiary of the increased use of stablecoin based system in Korea.
The top 10 picks in this bi-weekly include S&T Holdings, Samsung Life Insurance, Samsung SDS, Samsung Securities, Hyundai Elevator, SK Hynix, Paradise, Hanwha System, Hanwha Aerospace, and Korea Kolmar.

4. The New OS for Quant Finance: OpenBB, AI Agents & the Death of Legacy Terminals | New Barbarians …

By Manishi Raychaudhuri, Emmer Capital Partners Limited

Isan Sarakil is the Chief Product Officer at OpenBB, a platform that provides advanced analytics to every investor.
OpenBB is tearing down old walls of legacy market data systems and utilizing AI to change the way markets are understood and traded.
Isan discusses OpenBB’s journey and how new tools can give investors an edge in analyzing complex financial data, such as the Fed’s communications.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

5. Asian Equities: Absolute and Relative Valuations – Spotting Mean Reversion Opportunities

We take a detailed look at forward PE multiples, absolute and relative to Asia, of all Asia ex Japan markets. North Asia is in line with average valuations, India expensive.
Juxtaposing valuations in comparison to history with the earnings environment of each market, we arrive at conclusions about which market should rerate and which should derate.
We posit continued rerating for Korea and Philippines. India should derate. HK, Taiwan, Indonesia and Singapore could rerate modestly. Malaysia and Thailand are cheap but seem destined to remain so.

6. A Sharp Increase in the Lending Balance of Korean Stock Market Suggests A Pull-Back

By Sharmila Whelan, Westbourne Research Services

In our view, the sharp increase in the lending balance is one of the signs of many investors preparing for a pull-back in the Korean stock market.
The lending balance of the Korean stock market surged from 47.3 trillion won on 2 January 2025 to 90.4 trillion won as of 20 June 2025.
The rising lending balance in the Korean stock market could be construed as a bearish sign.

7. India – Reasons To Overweight

Overweight, Indian equities with a bias towards industrials, property and consumer stocks.
Trading Post hopes you took advantage of last year’s correction to buy into India, as recommended. If not, there is time.
Investing in India is ultimately about the domestic story. Business cycle indicators are improving, and the multi-year structural growth narrative remains compelling.

8. Steno Signals #202 – Peak WW3 Fears Return!

Over the weekend, oil traders dusted off their Strait of Hormuz crisis playbooks—and once again, they overplayed their hand.
Saturday’s U.S. strike inside Iran sparked a sharp wave of geopolitical anxiety, turbocharged by Iran’s retaliatory missile barrage and the familiar threat from Tehran’s Parliament to shut down the Strait.
Add a few “Hormuz closed?” headlines and prediction markets went into meltdown, briefly treating a full blockade as the base case.

9. Global Rates: Monthly Inflation Outlook

By At Any Rate, At Any Rate

U.S. inflation expected to accelerate over the next few months, with core inflation forecasted to rise to 3.8% by December
Trade policy and geopolitical risks, such as the potential for oil prices to spike, are factors supporting front end tips breakevens
Euro area inflation data shows softening trend, with core inflation falling to 2.3% in May, impacted by factors like timing of Easter holidays

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

10. Growth Broadly Back In The Black

PMI recoveries extended in June, taking averages above 50 as manufacturing is its strongest since Sep-22, and services almost align with its averages of recent years.
The UK survey balances suffered from bad vibes, so they are the primary beneficiary of sentiment improving. Their recovery can extend further as vibes improve.
Broad expansion helps labour demand to keep pace with supply, denying doves proof of a disinflationary demand shock. Without that, cuts roll later and may not resume.

Jun 08

Weekly Top Ten Macro and Cross Asset Strategy – Jun 8, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. US vs EU: Mutually Assured Destruction?

Section 899 is generally understood to be about leverage and deterrence.
It is unlikely to be fully implemented due to the potential harm it could cause to the US.
There are concerns about what could happen if the EU challenges this approach or if it is partially intended as a method to raise revenue.

2. Lee Jae-Myung Becomes the New South Korean President – Four Investment Themes That Could Outperform

Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.
In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.
The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.

3. EA: May Be Disinflation’s Return

Negative payback in services inflation dragged the headline EA rate down to 1.92% in the May flash. Although only 7bps low on the day, releases last week had cut 0.1pp.
Inflation now looks set to spend a few months below the target rather than at or even above it, as had seemed likely until recently. This is not because of re-rooted imports.
Euro appreciation and low energy prices have expanded the ECB’s room to cut rates, but we still see June as the final one amid tight labour markets and peers backing away.

4. HEW: Poorly Positioned Doves

The ECB was even more hesitant to signal cuts than we expected, with the level after the unsurprising cut now deemed well-positioned. Cuts will require downside news.
Disinflationary surprises across the Euro area in the May flash releases are already embedded in that assessment. Doves are poorly positioned for this reaction function.
US inflation data may be the most crucial global release next week, although the signal may not be clear. Statistical issues affect the UK labour market and GDP data.

5. The Art of the Trade War: XI WATCHES AS TRUMP SERVES TACOS

President Xi agreed to discuss issues including rare earths, chip design restrictions, and Chinese student visas with President Trump. China warns the US on its increased arms shipments to Taiwan.
The auto industry is facing disruptions in production due to shortages of rare earth metals.
The headline noise is starting to lose its luster as soft and hard data signals begin to pressure markets again.

6. HONG KONG ALPHA PORTFOLIO (May 2025)

The Hong Kong Alpha portfolio underperformed its benchmark in May by 3%, however it has outperformed Hong Kong indexes by 3 to 19% since its launch 8 months ago.
We continue to increase portfolio exposure to the consumption sector. We have added Alibaba Pictures (1060 HK), ZhongAn Online P&C Insurance C (6060 HK) & Sun Art Retail (6808 HK).
At the end of May we sold positions in Kingsoft Corp (3888 HK) and Topsports International Holdings (6110 HK). We reduced Lingbao Gold Co Ltd H (3330 HK) .

7. Lee Jae-Myung’s 20 Trillion Won+ Supplementary Budget: Free Money, Don’t Worry and Be Happy

One of the major policies that Lee Jae-Myung’s new administration is likely to push through is the 20 trillion won (US$15 billion)+ supplementary budget.
The aim of this policy is to revive the sluggish domestic economy. It is a classic “spend first, worry later” government policy.
The supplementary budget is basically sacrificing the balance sheet of the entire South Korea at the expense of short term economic stimulus which may have just limited impact.

8. Don’t Buy That TACO Just Yet

By Sharmila Whelan, Westbourne Research Services

The U.S. Court of International Trade unanimously ruled against the Trump Administration and struck down a whole range of tariffs by citing a lack of authority.
In reaction, President Trump doubled down by opposing and appealing the decision. The government has workaround options in light of the court decision: The trade war will continue.
Investors should continue to tilt toward the “Sell America” trade by avoiding USD assets. The court decision prolongs and exacerbates the uncertainty over the effects of the trade war.

9. US – Buy On Dip

We maintain a buy. The sectoral weightings favour industrials, tech hardware, banks, traditional energy, defence and going into the second half of the year consumer discretionary and AI software companies.
The US is neither headed for a full-blown recession nor another cost-of living crisis.
Neither updated business cycle indicators nor broad money growth trends signal a downturn and a resurgence in inflation.

10. HEM: Better Never Than Late

Companies are adapting to fluctuating trade policies while maintaining strong activity and tight labour markets.
Despite these positive trends, underlying price and wage inflation remains high.
While markets anticipate future cuts, the potential for rate hikes in 2026 is often overlooked.

Jun 01

Weekly Top Ten Macro and Cross Asset Strategy – Jun 1, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. US vs EU: Crying ‘Wolf’?

By Manishi Raychaudhuri, Emmer Capital Partners Limited

Ursula von der Leyen had a call with Donald Trump on 25 May.
The call can be interpreted as a ‘win’ for Trump as he had threatened to impose 50% tariffs on the EU from 1 June.
Another perspective could be that Trump’s reversion is a new manifestation of the TACO principle.

2. More USD Depreciation on the Cards – Who Wins, Who Loses.

US is focusing on propelling growth with tax cuts, ignoring the debt problem. The obvious consequence, more USD depreciation, could drive more money from US assets into Asia and Europe.
If 1% of US free float market cap flows into Asia, it would constitute 7.2% of Asia’s market cap. That’s more than 5x the highest ever annual Asian FII inflow.
Taiwan, Korea and India have seen the biggest FII flow revival. To sidestep the deleterious effect of sharp USD appreciation on Asian exports, investors should play China, India, Indonesia, Philippines.

3. Steno Signals #198 – A 20–25% Weaker USD May Solve All Trump’s Problems

By Nomura – The Week Ahead, Nomura – The Week Ahead

Morning from Europe.
Trump’s classical stop-and-go approach to negotiations is starting to get baked into markets, but we’re still surprised by the extent of market moves when these impulsive threats are announced on Truth Social — and markets remain poor at assessing the “realistic outcomes” of this approach.
On Friday, markets at one point priced in a 40–60% probability that 50% tariffs on the EU would actually take effect on June 1.

4. The Week Ahead – Big and Beautiful

Yield steepenings may be linked to fears of fiscal profligacy and concerns of inflation expectations
US Exceptionalism theme unraveling, dollar facing downward pressure
US tax bill moving through House, expected to have modest stimulative economic impact

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

5. Biggest One Day Move in Higher Share Performance YTD in 2025 for Major Korean Holdcos Today – Why?

In this insight, we provide five major factors that may have caused higher share price movements (up 7.6%) of 10 major Korean holdcos/quasi holdcos today.
This is the best one day share price performance on average for these stocks so far in 2025.
Emphasis on improving corporate governance by both leading Presidential candidates and potential mandatory cancellation of treasury shares are among the five major factors.

6. Overview #27 – The Big Beautiful Tragi-Comedy Continues

A review of recent events/data impacting our investment themes and outlook
What are major global bond markets telling us about the world?
We look at potential beneficiaries of the next wave of inflation

7. Texas Power Play: Grid Sovereignty, Bitcoin, and the Future of AI

The speaker discusses events surrounding the downgrade of the US economy and the response from government officials
The speaker highlights the increasing adoption and performance of bitcoin compared to traditional assets like gold
The discussion transitions to the business efforts and partnership of Lisa and Dan, who met at a Houston bitcoin meetup in 2021.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

8. KOSPI 200 and KOSDAQ 150 Constituent Changes Announced: A Few Surprises

By Manishi Raychaudhuri, Emmer Capital Partners Limited

Korea Exchange announced its KOSPI200 rebalance changes on 27 May. It added 8 companies and deleted 8 companies. KRX also added 9 companies and deleted 9 companies in KOSDAQ 150.
These 8 new inclusions in KOSPI200 are up on average 49.8% in the past one year. The 8 deletions to KOSPI200 are down on average 45.2% in the past one year.
There were numerous surprises to the KOSDAQ150 rebalances. In particular, three companies are relative surprises to the KOSDAQ150 additions including Solid Inc, Zeus Co, and Wemade Max.

9. Asian Equities: To Sidestep ASEAN’s China Problem, Focus on Select Pockets

ASEAN’s underperformance could continue. The low growth region is facing the additional risk of increasing Chinese exports, which could dent domestic companies’ revenues and margins and engender a deflationary spiral.
China exports more to ASEAN than to the US or EU. Margin pressure in consumer and industrials is palpable. Thailand is in deflation and inflation is nosediving in the region.
We recommend playing the region through markets with low China import intensity (Indonesia, Philippines) and through consumer services and select banks. We have Digiplus, DBS, BCA in our model portfolio.

10. Sell America = Buy Gold

The Sell America investment theme is becoming as a dominant market narrative, and it’s bullish for gold.
It is driven by the combination of rising deficits, shaky bond markets, an increasingly hawkish Fed and policy uncertainty.
For a long-term perspective of the upside potential in gold, a point-and-figure chart of monthly gold prices shows a measured objective of almost $7,000.

May 25

Weekly Top Ten Macro and Cross Asset Strategy – May 25, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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By Money of Mine, Money of Mine

1. Market Intel from a Commodity Trader & China Analyst

Discussion shifts towards the market consensus on China, highlighting a cyclical stabilization within a structural slowdown.
China’s credit cycle, green shoots in the economy, and property market are discussed.
Speaker shares insights on the Chinese real estate sector, mentioning a contraction and the need for new areas of investment.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

2. UK Inflation Flies Hawkish Pressures

Our above-consensus forecast was exceeded by UK inflation flying higher in April amid administered price rises and postponed price increases due to the late Easter in 2025.
Airfares still soared 10pp more than the norm for a late Easter, and 20pp above the April average. This stoked service and core inflation, although the median was steadier.
We expect inflation to grind up until October, whereas the consensus assumes stability until then. Persistently excessive inflation should discourage the BoE from cutting again.

3. Top 100 Korean Firms with Highest Treasury Shares as % of Market Cap (Tender Offer and M&A Targets)

We provide an analysis of the top 100 companies with the highest percentage of treasury shares as a percentage of market cap.
These 100 companies are prime targets of tender offers and M&As. Many of these companies have low PBR ratios.
Number five in this list is Telcoware (078000 KS) which just announced a tender offer by the CEO who is trying to take the company private.

4. Trump Doctrine: All Talk And No Trousers

The US has been extremely active in the international arena in recent weeks, particularly in trade and diplomacy.
Showmanship is currently taking precedence over substance in these activities.
This approach poses significant risks for both policymakers and investors.

5. “What-Ifs”

By Thomas Lam

What if the proportion of core CPI categories experiencing upward inflation momentum is on the rise?
What if the improvement in the more persistent categories of CPI inflation has more-or-less stalled?
What if longer-term inflation expectations are no longer wiggling sideways or actually creeping higher?

6. Steno Signals #197 – The Mood(Y)’s Is Bad in the Fiat

By Manishi Raychaudhuri, Emmer Capital Partners Limited

Morning from Copenhagen ahead of a big week.
I was coincidentally sitting in front of the screens when Moody’s announced its downgrade of the US late in the Friday session, and the timing was admittedly peculiar—with just 5–10 minutes left of futures trading before the closing bell.
Back in August 2023, when Fitch downgraded the US, it did spark a mild risk-off environment, with the long end of the yield curve continuing its upward trend.

7. Asian Equities: Relative Valuation Divergence Opens up Index Trade Opportunities

A glance at the growth-adjusted valuations of the Asian markets reveals that Korea and China are undervalued and India, Thailand, Singapore and Malaysia are overvalued.
We take a granular look at long histories of each market’s relative valuations, and their medium-term trends relative to long term averages. We combine the conclusions with growth-adjusted valuation outlook.
We conclude that HK/China, Korea, Indonesia and Philippines could be in for rerating in the near term. Derating could be on the cards for India, Singapore and Thailand.

8. HEW: Fiscal Anxiety As Rates Rise

By Manishi Raychaudhuri, Emmer Capital Partners Limited

Jitters over the sustainability of US fiscal easing knocked equities and the dollar over the past week. Dovish BoE pricing was pared back further towards our contrarian call.
UK inflation exceeded our already elevated forecast, while the manufacturing PMIs were broadly resilient again in May. UK retail data were also sensationally strong.
Next week is relatively quiet and shortened by a bank holiday. Flash inflation for some euro member states, updated US GDP data, and the RBNZ decision are our highlights.

9. Asian Equities: Taking Stock After the Result Season: Where Are EPS Estimates Rising and Falling?

As the earnings season draws to a close, we look at Asian markets’/sectors’ EPS estimate progression during the reporting season and earlier. Specifically, we search for upward or downward inflections.
Korea and Taiwan had the strongest EPS upgrades during this reporting season, despite the trade uncertainties. Philippines, Indonesia, Malaysia also had decent upgrades. HK/China and India continue to be downgraded.
Korean and Taiwanese technology, Korean industrials, HK Technology Services had strong upgrades. So did Singapore and Philippines financials, and Thailand Communications – the latter two with a long upgrade history.

10. Korea Value Up Index Rebalance Announcement Next Week

Korea Exchange plans to announce the first rebalance of the “Korea Value Up Index” next week on 27 May. The actual rebalance is expected to take place on 13 June.
Korea Exchange plans to reduce the constituents to 100 (from 105 currently) and change 30% of the included stocks in this index to better reflect the Value Up program incentives.
In this insight, we provide a list of 20 potential exclusion candidates and 20 inclusion candidates in the Value Up index rebalance.

May 18

Weekly Top Ten Macro and Cross Asset Strategy – May 18, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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By The Money Maze Podcast, The Money Maze Podcast

1. 173: The End of US Equity Dominance? With Chris Wood, Global Strategist and Author of ‘Greed and …

US stock market dependency on world index has increased significantly, reaching around 65-67%
Tariffs implemented by Trump have had a bearish impact on stock market
Small cap underperformance in US market is at its highest in 25 years, leading to interesting valuation opportunities

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

2. UK: Spurious H1 Surge Again

GDP’s resurgence caught the consensus off guard, as it failed to recognise the residual seasonality still skewing activity growth into the first half of the year.
The 0.7% q-o-q outcome for Q1 matched our forecast and leaves a powerful carry-over to Q2, where GDP seems set to exceed the BoE’s 0.1% forecast at about 0.4% q-o-q.
Strength discourages another policy rate cut. Disappointment in H2 is the hangover, but we doubt it will motivate renewed easing amid excessive price and wage inflation.

3. USD Bears Broke The Bandwagon

Investors ask whether threats to the USD’s reserve currency status are resting or dead, whereas we wonder if it was ever alive. Commentators routinely overextend narratives.
The USD share of allocated FX reserves is already trending downward. A potential acceleration from smaller deficits and higher tariffs would partly offset the impact.
Fuller hedging of USD asset holdings abroad may have already reached its limit. We still see more attractive mispricing elsewhere, such as excessively dovish rate curves.

4. HEW: Dovish Arguments Ageing Poorly

By The Emerging Market Equities Podcast, The Emerging Market Equities Podcast

Equity and rates market prices normalised further as data remains too resilient to prompt cuts, and US trade policy still seems to be reversing its destructive aspects.
UK GDP boomed beyond expectations again, albeit amid residual seasonality. US CPI data were soft and stable, as companies appeared to have smoothed the tariff shock.
Next week’s UK inflation data could compound the pressure by exceeding the consensus to reach 3.4% on the CPI. The flash PMIs and RBA decision are other timely highlights.

5. 100 days later: are all countries emerging markets now?

Bob Gilhooly, a senior emerging markets economist at Aberdeen, joins the podcast to discuss Trump’s first 100 days in office and his key outcomes
Trump’s focus on trade deficits and tariffs has raised concerns about revenue raising and potential impact on the U.S. deficit
Uncertainty surrounding trade negotiations and potential outcomes continues to be a key feature of Trump’s presidency

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

6. Bitcoin, Buffett, and the Barbarians at the Gate | Ep. #020 – The New Barbarians Podcast

Market experiencing steepening yield curve, potentially indicating higher inflation and stronger growth
Stocks rallying, with significant moves in earnings yield and small caps
Asia and Europe markets up, Dow, S&P, Nasdaq, and Russell all posting gains; Gold and Bitcoin down, Oil up, Vix down

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

7. UK: Tax Not Breaking Cost Pressures

Underlying unemployment rates are broadly stable, despite higher headline and underemployment rates, where the latter lacks relevance to disinflationary pressures.
Activity levels are expanding healthily and redundancies fell in April, suggesting no substantial jobs impact from the NICs rise, contrary to dovish fears.
Wage growth should slow to accommodate some of the tax cost increase, but there isn’t much evidence yet. Total pay growth is little changed in recent years.

8. Steno Signals #196 – What’s next for inflation given the US/China pause?

On the heels of the US/China “pause” announcement in the trade war, here’s a quick take on market implications and what to watch next:The initial market reaction has probably been more muted than many anticipated.
Bond yields ticked slightly higher, gold softened, and there were modest tailwinds for regions and countries previously hammered by tariff exposure following yesterday’s “deal” in Geneva.
But beneath the surface, several dynamics warrant a closer look.

9. The Drill – When the Facts Change, So Do We

Greetings from Copenhagen.
The global macro landscape is shifting rapidly, with U.S. policy priorities evolving just as quickly.
The administration is now 1) refocusing on the Middle East, 2) signaling that a Ukraine–Russia deal is inching closer, and 3) initiating currency policy discussions with Asian nations—many of which are active FX manipulators.

10. US Inflation Trends Stick Against Tariffs

A marginal downside surprise in headline US inflation measures preserves uncomfortably excessive trends, even without a significant tariff shock and with ongoing airfare falls.
Companies may have helpfully smoothed out the tariff shock such that volatile policy never hits consumers. Services (ex-shelter) continued to grow too rapidly for rate cuts.
Being in the right ballpark of the target isn’t good enough when the labour market remains tight. At least core price and wage inflation in the US isn’t as bad as in the UK.

Apr 13

Weekly Top Ten Macro and Cross Asset Strategy – Apr 13, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. US vs EU: Worse to Come

Policymakers and investors are not fully recognizing the threat posed by the US in response to ‘Liberation Day’.
The threat level has increased as ‘transactional Trump’ is replaced by a new president.
The new president aims to return the US to a perceived golden era in his mission to ‘make America great again’.

2. Investors Have that “Oh Sh#t Moment” – Part 2: Trading Opportunities.

Act 1 of the US bear market is likely complete, with diverging price signals from stocks, bonds and the dollar.
This will be a rebound bounce to sell into, as we are not going back to previous highs.
Looking at companies servicing high-income consumers is a good hunting ground for shorts.

3. US Bear Market: THIS TIME IS DIFFERENT!

The US dollar and US treasuries are no longer a safe haven in the wake of the US market sell off.
Tariffs undercut primary reasons for foreigners to buy and hold US dollar assets, including recycling of export earnings by foreign countries. Lower consumption and higher inflation are additional headwinds.
Foreign holdings of US stocks and debt will decline as the US isolates itself from the global trading system.

4. UK: Spillover effects from US tariffs

By Manu Bhaskaran, Centennial Asia Advisors

The UK output destroyed by reciprocal US tariffs is only partly due to the direct impact of the new 10% rate (worth ~0.2% of GDP) and generally weaker US prospects (0.1%).
Global GDP growth is depressed by this policy, indirectly destroying demand for UK exports from elsewhere (0.2%), especially if countries harm themselves by retaliating.
An overall 0.6% GDP hit has two-sided risks and a skew lowered by likely negotiations. Fears of items dumping into the UK market are overblown excuses for protectionism.

5. Trump, Tariffs, and Trade Wars

President Trump’s radical tariff measures will usher in a new era of greater volatility, slower growth, financial stresses and geopolitical downsides.
The coming weeks will be marked by uncertainty as the domestic political pushback in the US interacts unpredictably with retaliation by trading partners and the economic fallout.
In Asia, monetary easing can mitigate only part of the impact. Fiscal policy is needed but is constrained in most of the region, given pre-existing debt and deficits.

6. Smart Coffee: 7 April 2025

By Jay Cameron, Vantage Capital Markets Japan

An interesting day for the market after the announcement of tariffs previous day.
When analyzing this market move, it may help to look at the countries affected by tariffs in terms of the amount of tariffs (fig. 1, fig 2.). vs the movement on the main indices in that country.
Many impacted indices are 5% to 10% in the red in April as a result, including the EU indices.

7. A Big Bear, or Just A Plain Vanilla Correction?

The latest Trump tariff announcements have sparked a risk-off stampede.
Even though the macro and fundamental backdrop is deteriorating, sellers are becoming exhausted and a relief rally should materialize in the coming week.
Both the top-down outlook and technical structure of the stock market argue for a bear market, and any rally should be interpreted as a countertrend move.

8. Steno Signals #192 – A March 2020 style reset. Is this a liquidity event?

Happy Sunday from Copenhagen, if I am allowed to say that after a horrendous week in markets.
Markets are heading into a tense week as the U.S.-China trade tensions escalate and Europe appears poised to introduce digital tariffs — likely targeting the Magnificent 7 — in response to Trump’s proposed tariff agenda.
By late Friday, the U.S. dollar surged sharply, accompanied by early signs of capitulation in traditional safe-haven assets like gold and Treasuries.

9. Crafting Investment Policy in an America First World

If Trump succeeds in his America First policy, the new winners will be America’s suppliers of labour. The obvious loser under Trump’s win-lose worldview will be the suppliers of capital.
The investment environment in an America First world will be riskier. Expect more sovereign defaults and restructurings.
The benchmark portfolio under the new regime should be a basket of global assets.

10. UK: GDP Seasonal Surge Before Slowing

Fundamental causes should not be assigned to UK GDP surging far beyond consensus expectations again in February, despite the notability of Q1 growth tracking 0.7% q-o-q.
Residual seasonality has dominated the post-pandemic growth profile, and the recent resilience merely matches it. Stagnation for the rest of the year is the consequence.
Disruptive and volatile US trade policy will also depress the underlying economic trend beneath the spurious seasonals. We now bake both more fully into our modal forecasts.

Apr 06

Weekly Top Ten Macro and Cross Asset Strategy – Apr 6, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. HEM: Fear of Fear Itself

US surveys indicate a fear of tariffs and DOGE, leading to a negative sentiment.
Despite these fears, resilient labour markets suggest that concerns may be exaggerated.
There is an expectation of reversing unnecessary easing in 2026 due to high underlying price and wage inflation.

2. US Tariff Impact Estimates

By Priyanka Kishore, Asia Decoded

New US tariffs ignored any notion of reciprocity, reaching shockingly substantial sizes. However, the UK was relatively fortunate in landing on the 10% minimum rate.
Repeating 2024’s imports would raise $577bn in tariff revenue, which is worth ~3% of consumption. 70% pass-through to prices would add 2% to the level over 1-2 years.
Negotiations need to conclude rapidly to avoid these front-loaded price rises. The EU’s likely retaliations would magnify its pain, but the US is the biggest stagflationary loser.

3. Trump’s Reciprocal Tariffs Hit Asia Hard

The scale and scope of Trump’s reciprocal tariffs has exceeded our expectations.
The growth outlook has unambiguously worsened across the board and will dominate inflation in Asia this year.
We expect Asian policy rates to be reduced by an average of 100 basis points in 2025.

4. Tariff Transition Smoothing

President Trump’s tariffs embed structural cost pressures, compounding supply chain changes and creating a stagflationary shock central banks cannot offset.
Potential retaliation risks raising inflation expectations, constraining the extent to which monetary policy can smooth transitional pains through temporary easing.
We still believe any dovish policy imperative is likely to be short, shallow, and reversed, with central banks forced to remain flexible and focused on shorter horizons again.

5. TRUMP’S TARIFFICATION: The Market’s Willful Ignorance

Liberation Day marks the beginning of the Tariffication of the global trading system. The complex web of supply chains will be forced to detangle itself to find cost efficiencies.
US companies will try to unpack the many complexities of re-sourcing products to mitigate the inflationary effects of tariffs. Domestic substitution is not a possibility in the near-term.
US consumers will begin to see inflationary impacts of Tariffication in the coming weeks. China announced retaliatory measures that would open the door for other countries to do the same.

6. EA Disinflates March’s Excess

Euro area inflation slightly undershot consensus expectations in March, consistent with the correlation of surprises and energy prices. Yet it was 7bps above our forecast.
Services prices drove core inflation down to 2.4%, creating some dovish space. However, the headline outcome reversed last month’s upside to match February forecasts.
Resilience in the real economy still justifies more cautious easing close to neutral, so we expect graduated cuts to skip April for June, but the risk of an extra cut has risen.

7. The Month Ahead: Key Events in April

By Gaudenz Schneider

Central Bank Rate Decisions in Australia, India, and South Korea.
Tariffs: US reciprocal tariffs effective from 2 April; secondary tariffs are now a factor.
Holidays: Good Friday is an exchange holiday in Hong Kong, Australia, India, and the US. Several other national holidays throughout the region.

8. Investors Have that “Oh Sh#t Moment” – Part 1: Hong Kong Strategy

That “Oh sh#t moment” has just struck many investors in US markets
Within Hong Kong , Tech most at risk as investors take profit
Our alternative sector selection has performed both absolutely and in relative terms

9. HEW: Yikes, At Tonto Tariff Hikes

By Manishi Raychaudhuri, Emmer Capital Partners Limited

Severe global tariff increases have significantly impacted market sentiment, leading to lower equity prices and rate expectations. The market’s eagerness to discount ongoing US labour market resilience is considered excessive.
The new tariff rates are set to take effect in the coming week. Any further trade conflicts could be the main macro news.
US inflation, UK GDP, and the RBNZ are the conventional highlights, but these data may be disregarded as old news.

10. Asian Equities: India – Brace for Another Leg Down in the Near Term

Indian equity’s recent spike overlooks near-term risks – possible cuts in consensus EPS estimates, risks arising from reciprocal tariffs and another bout of likely INR depreciation. Valuations are again expensive.
Our analysis of sector fundamentals foretells earnings estimate cuts in most sectors. Financials, and to a lesser extent, consumer discretionary could see upgrades. Expanding trade deficit could drive INR decline.
In the near term we are cautious about India. For country-dedicated investors we recommend increasing exposure to financials (particularly large cap private banks), select consumer discretionary, and defensives like utilities.

Mar 30

Weekly Top Ten Macro and Cross Asset Strategy – Mar 30, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. US Tariffs: No Fooling!

By Nomura – The Week Ahead, Nomura – The Week Ahead

The announcement of individual reciprocal tariff rates for US trading patterns on 2 April is a significant event for investors.
This announcement is part of a drive to re-industrialise America.
Despite its significance, this could merely represent the initial stages of a prolonged trade war.

2. The Week Ahead – In The Eye of The Storm

The Fed, Bank of England, and BOJ all left rates unchanged with their own unique perspectives
Market volatility continues with equities bouncing and the dollar rebounding
Fed Chair Powell emphasized keeping options open and uncertainty in the economy, with no immediate rate cuts expected

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3. UK: Low CPI As Seasonal Sales Extend

UK CPI inflation slowed by 15bps to 2.84%, rounding slightly under expectations. The services rate was surprisingly resilient, and January’s upside news broadly persisted.
Downside news from clothing and core goods prices occurred because January sales extended broadly and unusually. Postponed Spring lines should drive a March rebound.
Headline inflation outcomes are benign enough not to threaten the BoE’s likely cut in May, but ongoing resilience still makes that the final move in our forecast.

4. UK Fiscal Smoke Over Treading Water

Attempts to recreate fiscal headroom after slippage rely on implausible and optimistic assumptions. Further tax rises and delayed prudence are likely in the Autumn budget.
Replacing aid resources with capital defence spending helps loosen fiscal policy inside the budgetary rules. Policy changes are relatively neutral over the next few years.
Without corrective action, the gross financing requirement path is £18bn a year higher than in the Autumn, and almost £50bn higher than last Spring, burdening gilt issuance.

5. PMI Spring Vibe Shifts

By Manishi Raychaudhuri, Emmer Capital Partners Limited

A resurgence in the US and UK services PMIs seems inconsistent with renewed dovish pricing that assumes activity weakness. Vibes may be throwing surveys beyond reality.
Labour demand growth seems to be trending close to supply, signalling monetary conditions close to neutral. That is broadly the story across a broad basket of countries.
We still believe rate pricing is too dovish for the Fed and, to a lesser extent, the BoE. Noisy survey vibes and spurious assumptions of tightness are likely to be misleading.

6. Asian Equities: What if There’s a US Recession?

US recession chatter is back. During past recessions, US declined less than Asia. Within Asia, select consumer staples, telecommunication, energy outperformed. Surprisingly, so did Korea and Taiwan tech, HK industrials.
Asian equity drawdown was driven more by valuation derating than by earnings decline. During every US recession, all Asian currencies depreciated and FIIs sold almost all Asian markets.
In the event of a US recession, we think Asia would outperform US. We like attractively valued domestic-focused sectors and stocks, unless a globally linked stock is egregiously undervalued.

7. Market Movers: Key Dates at a Glance (31 March- 6 April)

By Gaudenz Schneider

Australia: RBA rate decision on 1 April. Expect no change.
Japan: Nikkei 225 rebalancing effective 31 March at the close.
US reciprocal tariffs will keep everyone on their toes on 2 April.

8. Asian Equities: India – What Would FIIs and DIIs Buy and Sell?

By Manishi Raychaudhuri, Emmer Capital Partners Limited

We analyze FIIs’ and DIIs’ buying/selling trend across sectors and their sector-wise stances relative to benchmarks to assess which sectors they would buy or sell in the near term.
FIIs and DIIs have bought consumer discretionary and healthcare secularly. They recently started buying financials and IT, after prolonged selling. They’ve also secularly bought industrials, barring the last two quarters.
We conclude that both FIIs and DIIs shall continue to buy financials, industrials and consumer discretionary. They would also buy healthcare and sell materials, energy, IT and consumer staples.

9. How to Trade the Momentum Reversal

By Manu Bhaskaran, Centennial Asia Advisors

Global equity markets saw a sudden reversal in risk appetite out of the Magnificent Seven.
While risk appetite has recovered in the U.S. equity market and a relief rally will likely continue, the jury is still out on whether the stampede into non-U.S. will continue.
Reiterate our view that any relief rally is unlikely to be sustainable. Investors may be better served by diversifying their U.S. exposure into non-U.S. equities for the coming market cycle.

10. Abroad and at Home, Asian Politics Set For a Tough Ride Ahead

Washington’s apparent disengagement from its European partners is troubling Asian governments who are rethinking their own foreign policy and security strategies.
So far, the region has not been targeted by the US administration. But their persistent trade surpluses and security arrangements expose them to potentially aggressive measures.
Domestically, political stability has deteriorated in Thailand, the Philippines, and Indonesia, distracting governments from providing effective leadership in a riskier world.

Mar 09

Weekly Top Ten Macro and Cross Asset Strategy – Mar 9, 2025

This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

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1. Ray Dalio on the Coming Crisis in US Debt

By Odd Lots, Odd Lots

Ray Dalio, founder of Bridgewater and author, discusses big numbers and debt cycles in a social and political context
Tracy and Joe host a podcast episode with Ray Dalio, known for his insights on finance and the invention of the chicken nugget

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2. From Gene Hackman to Bitcoin: Signals, Sell-Offs, and Discipline | The New Barbarians #010

Episode 10 of New Barbarians podcast covers recent events and discusses Gene Hackman’s passing
Mark Connors shares insights on investors seeking certainty and compares them to characters in Gene Hackman’s movies
Trump’s statements on Truth social and implications for the crypto market are analyzed, drawing parallels to themes of integrity and leadership in Hoosiers.

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3. The US Bear Market: Stage One – DENIAL

After several months of a technical top-consolidation, the US market is entering a bear market. The piercing of the Magnificent-7 bubble will continue to drive selling pressure in the market.
Inflation pressures will tie the Fed’s hands to bail out the market with another Fed Put. Another market bailout would cost much more than the $5 trillion COVID bailout.
The administration’s policy sequencing is pushing inflation expectations higher as the immediate tariff implementation supersedes other anti-inflationary policies, which will take longer to implement.

4. HONG KONG ALPHA PORTFOLIO (February 2025)

By Sharmila Whelan, Westbourne Research Services

HK Alpha Portfolio returned 13.58% in February and outperformed the benchmark by 7.68%. The portfolio has outperformed Hong Kong indexes by 5.16% to 11.48% since its inception on 10/01/24.
About 50% of the portfolio’s excess returns have been from alpha generation. The portfolio had no exposure to Real Estate, Energy, or Utilities.
At month-end we sold AAC Technologies Holdings (2018 HK) , Trip.com Group (9961 HK) , MINISO Group Holding (9896 HK) , and trimmed Xiaomi Corp (1810 HK) .

5. 2025 Global Investment Strategy

Last year 70% of the calls made money. This year we make another 43 investment recommendations, global, US, Europe, Japan and 8 Asian countries.
Our prediction that Bitcoin will become a US reserve asset under Trump is already playing out.
Stock market volatility will persist, with diverging performance and subdued gains compared with 2024. Our top picks are the US, Japan, Taiwan, Korea and India and selectively China.

6. ECB: Meaningfully Less Restrictive

The ECB’s sixth 25bp deposit rate cut to 2.5% was unsurprising, and its characterisation of policy as meaningfully less restrictive leaned towards our relatively hawkish view.
Policy rates may already be close to neutral. Looser fiscal policy plans also pressure monetary policy to follow a tighter path than would otherwise have been necessary.
We still expect the ECB to hold rates in April, which is no longer a controversial call. A final 25bp ECB cut in June remains in our outlook (BoE cuts in May and Fed on hold).

7. The Drill – Geopolitical Tensions Are Easing, Not Escalating

Hello everyone, and welcome back to our weekly editorial on geopolitics, commodities, and macro.
While there hasn’t been much news on the commodity front since last week, we have a bunch of moving parts on the geopolitical scene—last Friday’s heated (and unplanned) Zelensky/Trump debate, the subsequent removal of all military aid targeting Ukraine, and now Trump trying his best to get all counterparts and allies to block any partnerships with China.
While this was already evident earlier this week, when the administration urged Mexico to impose tariffs on China to avoid US tariffs, today’s reports of Putin acting as the middleman in the Iran nuclear deal were not something anyone had on their bingo cards.

8. HEM: Pausing Policy Easing

Central banks are advised to slow, pause, or stop reducing rates due to rising inflation and labour costs.
Inflation is unexpectedly increasing, and labour costs are exceeding target-consistent levels.
Monetary policy is almost neutral according to activity trends, but rate hikes in 2026 could counteract unnecessary easing.

9. Steno Signals #187 – Remember August & September 2024? Tariffs are to blame

Friday’s bizarre scenes in the Oval Office will take some time to digest for all involved counterparties.
I don’t feel in a position to judge either side, but I will use this analysis to assess the ramifications of the event.
As a disclaimer, remember that I am European!Trump’s argument that the U.S. pays too much to the rest of the world is, in many ways, entirely correct—but also quite banal.

10. HEW: Political Blunderbuss