In today’s briefing:
- Back Testing the End of Mandatory Lock-Up Periods Monthly Data in Korea
- Asian Geopolitics: Despite Global Turbulence, Can Asia Enjoy Relative Calm?
- Great Game: Despite New Aid, Ukraine will lose within 12 months. Plan Accordingly!
- China Economics: Headwinds Remain Despite Rosy GDP Figures
- Policy Tightness is Gradations of Weak
- Bollinger Bonds
- Singapore CPI Inflation 2.7% y-o-y (consensus 3.0%) in Mar-24
- Positioning Watch – 0 Fed cuts is almost the most favored outcome in market pricing now
Back Testing the End of Mandatory Lock-Up Periods Monthly Data in Korea
- In this analysis, we provide a back testing analysis of the end of mandatory lock-up periods monthly data in Korea in the past six months.
- All in all, this end of mandatory lock-up period monthly data continues to provide some alpha generating results.
- In the past six months, they have tended to work better in periods when KOSPI declines rather than in periods when KOSPI rises.
Asian Geopolitics: Despite Global Turbulence, Can Asia Enjoy Relative Calm?
- Despite trade and other frictions between Washington and Beijing, the two sides have set up mechanisms for regular high-level exchanges and other guard rails which reduce risks.
- However, as more big powers turn hawkish on defence and trade, other Asian exporters may end up being collateral damage from anti-China protectionism.
- Closer to home, the ongoing Myanmar conflict is reaching an imminent turning point as the risk of China getting involved increases and the fighting becomes more intense.
Great Game: Despite New Aid, Ukraine will lose within 12 months. Plan Accordingly!
- With all eyes on the Middle East for the past weeks and months, we haven’t focused as much on the ongoing war in Ukraine.
- In the big picture, not much has changes on the frontline despite continued heavy losses and a Russian election.
- But now I think it’s time for investors to re-adjust their assessment of the war and consider contingencies for the path ahead.
China Economics: Headwinds Remain Despite Rosy GDP Figures
- China’s first quarter growth of 5.3% comes amidst a slew of other positive data releases, including an improvement in fixed asset investments and a turnaround in net exports.
- But a closer examination suggests that momentum remains weak; the recovery was boosted by Lunar New Year spending, which showed signs of fading by March.
- Overcapacity and trade tensions remain major headwinds for any export-led recovery; even as property sector misery continues to dampen purchaser sentiment.
Policy Tightness is Gradations of Weak
- The PMIs mostly revealed surprise resilience in April, albeit with the US disappointing. Divergent surprises may reflect excessive spread changes in policy expectations.
- Residual seasonality may exaggerate current strength and unwind in the summer, but stability in unemployment trends still suggests global monetary policy is not that tight.
- Persistent excess demand requires tight conditions to be sustained. The BoE MPC seems desperate to cut, but resilience should delay it, including relative to Fed pricing.
Bollinger Bonds
- In our April monthly, we highlighted the combination of fading impulse for momentum stocks (principally tech) and the need for tax related selling in the trading/retail space coming against a background of a correction in the short term bull phase within the longer term bond bear market.
Since the beginning of March, US 10 year yields have gone from 4% to around 4.6%, unwinding the Fed Pivot language that emerged to ‘explain’ the earlier rally.
In our view that was an unlikely ex-post narrative, as is the one emerging now that the Fed will not cut at all.
Singapore CPI Inflation 2.7% y-o-y (consensus 3.0%) in Mar-24
- Singapore’s CPI inflation in March 2024 dropped to 2.7% year-on-year, which was lower than the market consensus of 3.0%, showing a significant moderation of price pressures.
- The inflation rate is 1.34 percentage points below the one-year average.
- This data highlights a persistent disinflationary trend in Singapore.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Positioning Watch – 0 Fed cuts is almost the most favored outcome in market pricing now
- Hello everyone, and welcome back to our weekly positioning watch, where we as usual will dive into positioning and sentiment data to provide you with the latest overview of crowded trades and where the markets are leaning.
- This week we dig into how the rise of volatility (and volatility of volatility) has affected market positioning, if the recent weakness in equities has shaken around positioning (hint: it has) and the recent developments in rates pricing, where the outcome space for the DEC2024 SOFR contract has turned significantly more uniform in hawks’ favor.
- The VIX recently woke up after a long period of being range-bound between 12.5 and 15, surging on the back of weakness in equities as tax payments have been due in April combined with a slightly hotter than expected CPI report and hawkish remarks from Powell.
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