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’?
- 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
- 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
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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.
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8. KOSPI 200 and KOSDAQ 150 Constituent Changes Announced: A Few Surprises
- 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.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
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.
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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”
- 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
- 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
- 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.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
Receive this weekly newsletter keeping 45k+ investors in the loop
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
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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
- 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
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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.
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. Don’t Swim Naked: TIME TO PUT YOUR SHORTS ON!
- The bear market rally in the US stock market continues as investors try to justify the tariffication of global trade and ignore its economic consequences. A FREE LUNCH.
- Soft and hard economic indicators in the US are falling, with some alarming numbers in the travel industry.
- US companies face potential blowback from Chinese consumers that provide 7% of S&P revenue.
2. HEM: Dovish Prices Deranged
- Despite concerns, activity continues to be robust with stable manufacturing and tight labour markets.
- There is a persistent issue of high underlying price and wage inflation.
- The Bank of England’s rate cut ahead of the Federal Reserve is seen as highly irrational, as rates do not reflect the rebounding risk sentiment.
3. HEW: Doves Disappointed By Patience
- The BoE and Fed decisions disappointed dovish hopes for action by sensibly waiting to see some signs that easing is appropriate. Caution reduces the risk of a policy mistake.
- Inflation in the US, plus unemployment and GDP in the UK, are the scheduled economic highlights for us next week. The UK data may prove more resilient than feared again.
- An absence of bad news can allow the good vibes to keep flowing from recent resilient data and trade policy progress, but investors seeking to sleep easy may wish to hedge.
4. BoE Closer To Slowing Cuts
- The shockingly divided MPC’s offsetting votes weren’t the most hawkish signal alongside its 25bp rate cut. Most of the five backing it were only recently convinced.
- Maintained guidance for a gradual and careful approach not only disappoints dovish hopes, but signals a 5:2:2 bias between a slower, constant and faster pace of cuts.
- We still expect this gradualism to help the BoE resist cutting in August (and June) while waiting for dovish evidence that never emerges, making this the last cut.
5. The Coming Global Trade Re-Ordering
- China’s exports to the US dropped $7bn in April from March as the impact of tariffs kicked in.
- But its overall exports were barely impacted due to a jump in shipments to the rest of the world.
- This should ring a few alarm bells as to how the world will absorb the coming flood of Chinese imports, given Beijing’s struggles to lift consumption at home.
6. Steno Signals #195 – Wait, what? Did China just start buying Treasuries again?
- Morning from a sunny Copenhagen! Many pundits have (rightfully) struggled to find a coherent logic behind the Trump administration’s trade policy.
- However, quietly—but increasingly noticeably—the administration is beginning to make progress on a few of the core objectives outlined in the so-called “Mar-a-Lago Accord.” This accord seeks to leverage the U.S. defense umbrella to compel major trade partners to accept:a weaker USD, and increased purchases of U.S. Treasuries (USTs) in exchange for continued security guarantees— with tariffs serving as the primary tool in this negotiation strategy.
- While this approach has clearly sparked outrage globally—and while one can certainly question the strategic coherence and execution—the first signs are emerging that suggest it might be achieving some of its intended effects.
7. Assessing Trump’s Shock and Awe Move in Apr 2025
- April 2025 saw extreme market volatility after President Trump announced sweeping reciprocal tariffs, mainly aimed at China.
- Subsequent delays and complex exemptions fueled market swings, sparking fears of recession and inflation. First quarter 2025 US GDP contraction is not a trend.
- Despite headline risks, deeper analysis suggests a more balanced global economy over the longer term. Both China and the US will do whatever it takes to avoid a recession
8. Trust the Thrust, or Sell in May?
- We are seeing a resurgence of buy signals, or at least constructive signs for stock prices.
- Against that, the stock market is also facing a number of bearish headwinds, such as the “Sell in May” negative seasonality influence.
- We believe the intermediate path of equity prices is down. However, the reflex rally is a much-hated one and the short-term pain trade may be up.
9. HONG KONG ALPHA PORTFOLIO (April 2025)
- The Hong Kong Alpha portfolio underperformed its benchmark index during April by 1.1%. Since its inception last year, the portfolio has outperformed its benchmark by 18%.
- Although the tech sector was hit after April 2nd, the portfolio made 2% in its tech exposure for the month. We reduced the portfolio’s volatility & increased its Sharpe ratio.
- At the end of April, sold positions that are at risk from the tariff uncertainty and increased our exposure to China domestic consumption.
10. The Drill – The Gold(en) Era Continues!
- Greetings from Copenhagen.
- There’s plenty of geopolitical tension to unpack this week, with three major developments over just the past few days: 1) an Indian attack on Pakistan, 2) new events in the Middle East, and 3) the launch of U.S.–China trade talks.
- India attacked Pakistan in the Kashmir region overnight, and Pakistan swiftly retaliated.
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. UK: Tax Hikes Disrupt Housing Market
- Domestic tax hikes are more substantial than US tariffs in April, so the impact should not be forgotten, even if the UK government wants to blame any damage on Trump.
- Frontrunning April’s stamp duty increases stoked transactions and lending, and may take at least a few months to recover afterwards. Resilient approvals are reassuring.
- Higher transaction costs probably won’t break expectations into a downwards spiral, but are now widely cited as a major hurdle, contributing to slower UK activity growth.
2. Top 80 Companies in Korea by Short Interest and Days to Cover (Potential Short Squeeze Candidates)
- In this insight, we discuss potential short squeeze opportunities in the Korean stock market, using short interest and days to cover as main screening tools.
- In KOSPI, the top three stocks with highest combination of short interest and days to cover include Doosan Fuel Cell, Posco Future M, and Hotel Shilla.
- In this insight, we provided 80 companies (40 companies in KOSPI and KOSDAQ, respectively) that have high combination of short interest and days to cover ratios.
3. EA: Easing Stagflationary Noise
- Hard economic data must match gloomy sentiment to justify ECB rate cuts reaching a stimulative setting. The little evidence available so far doesn’t show much of a shock.
- Bank lending growth kept rising for companies and households in March as monetary conditions appear to be loosening, not tightening, due to the initial tariff shock.
- Activity surveys only softened slightly in services, while inflation expectations are broadly high. Failure to see much more stagflation eases the likelihood that it occurs.
4. HEW: Good News From Less News
- Economic data and Trump’s declarations do not support dovish fears, with the economy showing resilience despite the initial US tariff shock and the UK stamp duty rise. EA inflation pressure remains unbroken.
- The Federal Reserve is expected to maintain steady rates next week due to lack of hard evidence for a cut. Similarly, the Bank of England is likely to continue its course with a quarterly 25bp rate cut, influenced by the strength of sterling and falling commodity prices.
- Any future rate cuts by both the Federal Reserve and the Bank of England would require more substantial evidence.
5. Asian Equities: The Overvalued, Low Growth, Over-Leveraged Stocks
- We use quantamental screens to identify overvalued stocks in Asia, with weak fundamentals – consistently low earnings growth, forecast return ratios less than cost of capital, and over-leveraged balance sheets.
- We screen Asia-listed stocks above US$1bn market cap on declining EPS CAGR over next 2 years, less than 10% ROE, higher than 1x PEG and P/BV, more than 80% D/E.
- We identify 30 stocks: 11 from HK/China, 9 from Japan, 4 from Taiwan, 3 from India, and one each from Korea, Malaysia and Singapore. Financials, property, industrials dominate the list.
6. Steno Signals #194 — The March 2020 Parallel Intensifies
- Happy Monday from a sunny Copenhagen! We have been banging the drum on the similarities between the tariffs-cycle and the Covid-cycle over the past month, and we are increasingly confident that the playbook holds true.
- The kind of stop/go dynamics look clearly similar as a policy shock nukes the cycle, while the “solution” is to roll back the shock gradually.
- A lockdown before a reopening essentially.
7. US Bear Market: THE TIDE GOES OUT BEFORE THE TSUNAMI HITS THE SHORE!
- It is the calm before the storm as US markets move up in a bear market rally.
- China/US container ship sailings are at a standstill. Tariff effects will start to be felt in US retailers within weeks. Temu and Shein pass tariffs costs to the US consumer.
- According to a Deutsche Bank report, foreign buyers of US assets are pulling back quickly. The virtuous cycle turns into a vicious spiral.
8. UK Politics: Labour Day, Not Labour’s Day
- The balance of seats Labour loses to Reform UK, compared to the LibDems and Greens, could be crucial in internal party disputes.
- The outcomes of the local elections on 1 May could significantly influence this balance.
- A concurrent by-election also stands to have a significant impact on government policy.
9. MAGA Will It Work?: A REALITY CHECK
- April customs numbers report that tariff collections may double in April; however, at an annualized rate, it would fall well short of the Administration’s promises.
- The Administration has adjusted its narrative to focus on bringing high-tech manufacturing to the U.S. with more robots than blue-collar line workers.
- GDP surprisingly declined in the first quarter, indicating a coming recession. Media focus is on the drag from net exports, but ignores the inventory build and poor consumption numbers.
10. Finance Minister Choi Quits and Lee Jae-Myung’s Fate Remains Uncertain Post Supreme Court Ruling
- The Finance Minister Choi Sang-Mok resigned as the National Assembly was trying to vote to impeach him just before Choi resuming role as South Korea’s acting President once again.
- The Supreme Court “reversed and remanded” the case of Lee Jae-Myung, the leading candidate of the Democratic Party of Korea, for being guilty of violating the Public Official Election Act.
- All in all, given the uncertain political landscape, this could result in more overseas institutional investors in the Korean stock market to sit out longer on the sidelines.
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. Trade War Winner & Losers – Where To Invest?
- Our top buy calls are the Philippines, India, Japan, Malaysia, Taiwan and Europe.
- Least vulnerable: Russia, Brazil, Philippines, South Africa, Indonesia, India and Malaysia. Most vulnerable: Vietnam, Taiwan, Mexico, Thailand and EU.
- Countries facing the highest reciprocal tariff rates, with large surpluses vis-à-vis the US and high gross exports to GDP ratios will buckle first.
2. DOGE Didn’t Dent Resilience
- President Trump is restructuring the US state through tariff funding and efficiency savings. The former dominates focus, but we also see no evidence of problematic cuts.
- Jobless claims are low and stable, including among federal workers and in states with the highest federal workforce shares. Government job openings haven’t even fallen.
- DOGE cuts are often multi-year and in grants to others. It may have helped the deficit, and the efficiency is fundamentally desirable. Concerns about it still seem overblown.
3. Gold: YOU AIN’T SEEN NOTHIN’ YET!
- Gold’s advance is accelerating in the face of increased global uncertainty and inflation expectations.
- The price is now asymmetric based on various economic outcomes, including a renewed safe-haven status during the global trade war.
- The ratio of gold to the S&P remains at depressed levels but is starting to reverse as the S&P continues its bear market.
4. Global Manufacturers Shrug Off Tariffs
- Volatile and destructive US trade policy has roiled markets and confidence, but April’s flash PMI data suggests the sector isn’t suffering significantly more than before.
- The average held steady while the US balance increased. Weakness concentrated in the UK, where experience of the past decade suggests it is more distorted by bad vibes.
- Unemployment data are a more reliable signal, albeit lagging, and these also remain remarkably resilient. Rate cuts rely on Trump breaking the economy, but lack evidence.
5. Steno Signals #194 – A Mar-a-Lago Accord- or Meltdown?
- Happy Monday and welcome to my weekly editorial on everything macro.
- Everyone’s talking about the USD meltdown and whether it marks a seismic shift in the international system as we know it.
- Markets are clearly responding to Trump’s list of “non-tariff barriers,” which notably placed FX manipulation at the very top.
6. HEW: Put Inside The Trump Collar
- The US policy caused market volatility over Easter, creating a ‘Trump Collar’ to pricing, but the global economy remains unaffected by the attacks and uncertainty.
- The upcoming week will see a heavy release of data, providing insights into current conditions.
- Key data highlights include US payrolls, the ISMs, and Euro inflation for April, while Q1 EA and US GDP are likely to be discounted by the market as outdated information.
7. Prisoner’s Dilemma For Ukraine
- Ukraine cannot avoid painful settlements as the US and Russia pull its resources apart. Europe has no veto over US taxpayers and can’t block all attempts to loosen sanctions.
- Further progress to peace is likely over the next few months. If the US walks away from talks, it is most likely dropping support too, postponing peace while Russia gains more.
- Intensifying support would raise risks along a hard-fought market-negative path. Risks will also remain more elevated in Korea after Ukraine’s misguided incursion into Russia.
8. The Art of the Trade War: U.S. PANICS AND RETREATS!
- The US has begun to retreat from the trade war it began this year. Trump and Bessent have both softened their statements toward China and indicated a lowering of tariffs.
- Container ship bookings dropped off a cliff after Trump’s Liberation Day tariff announcement.
- Trade negotiations are expected to take months or years, and will not change the bear market in the USD, equities, and treasuries as foreigners pull money from US asset markets.
9. The 60/40 in an Era of American Unexceptionalism
- Markets are increasingly concerned about the USD and Treasury assets as a safe haven.
- Investors can consider diversifying into a basket of non-U.S. sovereign bonds, but at the price of a lower coupon rate and a history of underperformance.
- The current combination of technical, sentiment and fundamental conditions indicate the stock market is ripe for a short-term relief rally, with a substantial risk of a much deeper downdraft.
10. Known Unknowns and Unknown Unknowns
- Trump’s main objective in his trade war is to erect a trade wall around China, but it’s unclear how successful he will be as his allies are wavering.
- The U.S. economy is weakening. At a minimum, the markets will undergo a growth scare, though an actual recession isn’t a certainty.
- The challenge in the long term is the continuation of American Exceptionalism, consisting of long U.S. market leadership, long multi-nationals and a buy-the-dip mentality
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. UK: Green Shoots For Unemployment Wilt
- Signs that statistical effects might lower the unemployment rate in the Spring have weakened, with stability at 4.4% now more likely amid stagnant underlying trends.
- Levels remain healthy and redundancies are low despite falling vacancies, suggesting resilience survives rather than thrives. Rapid wage growth is more problematic.
- Dovish hopes that excesses will break soon, aided by destructive US trade policy, keep the BoE on track to cut in May. Sterling strength also adds disinflationary space.
2. UK: Price War Dents Spring Inflation
- A supermarket price war hit food prices, slowing UK CPI inflation below the headline consensus again. Upside news in clothing was offset by downside in game prices.
- Repeating 2008’s experience would drive a game price rebound, but the food effect is more likely to persist. The median inflationary impulse should also rebound soon.
- Unit wage costs remain inconsistent with the target, while energy and water utility bills will drive a massive jump in April. We still forecast a final 25bp BoE rate cut in May.
3. US Tariffs: Of Words And Bonds
- Donald Trump’s recent policy reversal may provide an opportunity for the completion of bilateral trade agreements with certain US partners.
- However, neither China nor the EU is expected to reach an agreement soon, particularly in the current context.
- This is largely due to the evident vulnerability of America to the bond market.
4. A Game Theory Analysis of the Trade War
- No country in the world will be spared damage in a trade war.
- Both the U.S. and China have outlined positions that are little more than posturing.
- However, a game theory analysis of the relative positions indicates that the U.S. holds a weaker hand than China.
5. Atkins to Accelerate the Delisting of Chinese Stocks From the US Stock Exchanges in 2025/2026?
- Paul Atkins, the new head of U.S. SEC could accelerate the delisting of Chinese stocks from the U.S. stock exchanges.
- There are about 280 companies from mainland China that are listed in the U.S. with a combined market cap of about $880 billion.
- There could be two major reasons to accelerate this delisting (require Chinese companies to abide by US GAAP accounting and fully delist Chinese companies with ties to Chinese military).
6. Steno Signals #193 – The USD Reset Is Underway
- Morning from Copenhagen!It’s been a remarkable week—and weekend—in policy space.
- On Friday, the White House released a list of exemptions from the reciprocal tariffs (including, for example, semiconductors).
- Then, on Sunday, Trump “tweeted” that no exemptions were made, leaving Howard Lutnick once again to explain what was actually going on.
7. US Bear Market: BETWEEN DENIAL AND ANGER THERE IS “HOPE”
- The S&P bounced off its support level of 4800 and is now consolidating on investor hopes that the worst is over as volatility declines.
- As the economic numbers weaken and inflation accelerates from tariffs we expect the market to take its next leg down and enter a secular bear market.
- As the economic numbers weaken and inflation accelerates from tariffs we expect the market to take its next leg down and enter a secular bear market.
8. Trump’s End Game
- Trading Post’s top buy calls are the Philippines, India, Japan, Malaysia, Taiwan and Europe.
- Trump’s ultimate objectives are to secure fairer trading terms and stimulate inward investment—and the strategy appears to be gaining traction.
- Countries facing the highest reciprocal tariff rates, with large surpluses vis-à-vis the US and high gross exports to GDP ratios will buckle first.
9. Argentina: The First Domino How Freedom, Discipline, and Bitcoin Are Rewriting the EM Playbook
- Century of Decline, One Shock Reset: Argentina fell from 80% of US GDP to 25%—Milei is reversing it with fiscal shock therapy.
- From Chaos to Credibility: Inflation tamed, market confidence rising—first fiscal surplus in a decade.
- Decentralization, AI, and the Next Model: Tax federalism and AI governance make Argentina the first EM reform lab.
10. Estimating Downside Risk
- The S&P 500 is deeply oversold by historical standards, but it remains an open question of whether stock prices will decline further after a short-term bounce.
- Our estimate of S&P 500 downside is 3900–4500 without a recession, with strong technical support at 4800. Downside risk with a recession is 3300-3800.
- Current readings indicate elevated recession risk based on consensus policy expectations, which can change at any time.
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
- 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
- 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.
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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
- 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
- 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
- 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.
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!
- 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
- 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)
- 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?
- 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
- 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.