Smartkarma Daily Briefs

• Happy Sunday, and welcome to our weekly editorial on all things macro markets.
• In full transparency, we’ve been a few weeks early on our bet for lower bond yields, which slightly wrongfooted our risk asset view heading into Christmas—after being on a remarkable roll for several months.
• We remain puzzled by the resilience of bond yields (and the USD) despite softer economic surprises and flattening inflation expectations.

• Central banks in the US, Europe, and Asia have made policy rate announcements, with the Fed in the US easing rates and the ECB expected to continue cutting rates.
• The US economy is expected to see slowing growth momentum in the coming year, with concerns about policy risks from the incoming Trump administration.
• In Asia, Japan is forecasted to experience above potential growth with rate hikes, while China continues to struggle with low inflation and credit growth.

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• The Indonesian stock market was down 2% over the last year despite a flurry of inflows in the summer but this year looks interesting with a new government in place. 
• GDP growth forecasts are more optimistic for 2025 and government stimulus should help to drive higher consumption, with FDI driven by more value-added investments in the EV-related projects. 
• Increasing digitalisation of the economy and greater use of AI will drive profitability and data centre growth. Interest rates are expected to fall -50-100bps which should also be supportive.

• The U.S. oil and gas rig count remained unchanged for the fourth straight week at 589 for the week ending on 03/Jan.
• For the week ending 27/Dec, U.S. oil production moderately fell to 13.57m bpd from 13.59m bpd the week prior.
• The U.S. oil rig count declined by one to 482, while active gas rigs increased by one to 103. Producers added one rig in Texas and cut one in Louisiana.

• Farmer body asks farmers not to go for ‘summer tapping’
• Rubber Board exhorts farmers to up tapping to discourage imports
• Farmers allege Rubber Board catering to interests of tire-makers

• The past week was a short one but we saw market strategy insights on Indonesia from CrossASEAN Research plus an insight on Philippine Stock Exchange.
• There was also an insight on Indo Tambangraya Megah (ITMG IJ) and a sector piece on Thai Tourism, flagging Central Plaza Hotel (CENTEL TB) as the top pick. 
• The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated substantive, and actionable insights, macro and equity bottom, from across Southeast Asia.

• WTI futures rose 4.8% for the week ending 03/Jan, led by improving outlook on China and declining U.S. crude oil stockpiles.   
• WTI options Put/Call volume ratio rose to 1.03 from 0.97 (27/Dec) last week, as call volume grew by 57.9% WoW while put volume increased by 68.1%.   
• WTI OI PCR rose to 0.93 from 0.89 last week. Call OI inched up by 4.1% WoW, while put OI rose by 8.9%. 

• U.S. natural gas prices dipped 0.9% for the week ending 03/Jan, as robust early-week gains were eroded by volatile weather forecasts.
• Henry Hub Put/Call volume ratio jumped to 1.37 from 1.05 (27/Dec) the previous week as call volumes increased by 86.4% WoW, while put volumes surged by 141.6%. 
• Henry Hub OI PCR rose to 0.87 from 0.85 compared to last week. Call OI inched up by 4.9% WoW, while put OI increased by 8.5%.

• Although data interpolation has a long history, the various linear and nonlinear techniques have pros and cons         
• I introduce a hybrid technique to interpolate monthly US inflation-adjusted GDP going back to 1947
• My monthly GDP nowcast through November seems consistent with some growth moderation on a three-month and six-month basis