In today’s briefing:
- Macro Regime Indicator: From Stealth QE to Stealth QT
- Rising Geopolitical Tensions Propel Crude Oil Even as OPEC+ Will Likely Stay the Course
- 5 Things We Watch – EUR-Inflation, Central Banks, The Business Cycle, Positioning & Commodities
- CX Daily: Huawei’s HarmonyOS Next Is Set to Rival iOS and Android
- EA Services Don’t Dis-inflate for Doves
- Auction Dynamics Augurs Well for Long 2Y Short 5Y Spread
Macro Regime Indicator: From Stealth QE to Stealth QT
- Welcome to our Monthly Macro Regime monitor.
- Coming into March, we wrote that “We see little change to the optimistic and risk-favoring sentiment for March, and we thus remain in the goldilocks ‘Gung Ho’ regime.
- With tailwinds from both liquidity and growth, we continue to see a great case for continuing to move/stay further out of the risk curve when it comes to allocation.
Rising Geopolitical Tensions Propel Crude Oil Even as OPEC+ Will Likely Stay the Course
- Oil prices are buoyant as the market largely expects OPEC+ to keep the supply cut policy intact till June.
- Global oil demand outlook improves as the US and China see pick up in manufacturing activity after one-and-a-half years and six months, respectively.
- Russia decides to focus on reducing oil output rather than exports in Q22024, implying a surprise shift in policy.
5 Things We Watch – EUR-Inflation, Central Banks, The Business Cycle, Positioning & Commodities
- Welcome to our weekly ‘5 Things We Watch’, where we take you through 5 of the things we look out for in global macro.
- With markets hawking up Fed expectations, Euro Area inflation surprising on the downside, and commodities breaking out technically, there are plenty of things to shed some light on!
- This week we are watching out for the following 5 topics within global macro:
- EUR-Inflation
- Central Banks pricing
- The Business Cycle
- Fixed Income Positioning
- Commodities
CX Daily: Huawei’s HarmonyOS Next Is Set to Rival iOS and Android
- Coffee / In Depth: Luckin challenger pushes China’s coffee price war toward boiling point
- Huawei /In Depth: Huawei’s HarmonyOS Next is set to rival iOS and Android
- Corruption /: Two officials of China’s non-communist political parties caught up in corruption investigations
EA Services Don’t Dis-inflate for Doves
- EA inflation reversed its previous upside surprise to print down at 2.44% in March. Core inflation was 2bps softer at 2.946% amid non-energy industrial goods price weakness.
- Services inflation once again surprised on the upside by refusing to budge from 4% for the fifth consecutive month despite potential Olympic-related weakness in France.
- The ECB can welcome headline disinflation, but without seeing a slowing in services inflation, we still believe it will not be convinced to start cutting interest rates.
Auction Dynamics Augurs Well for Long 2Y Short 5Y Spread
- Shifting rate cut expectations and contrasting demand for treasuries creates a nuanced topology across various yield curves and inversion dynamics.
- Last Dec, expectations were for six rate cuts of 25 bps each to start from Jan. Two FOMC meetings have passed with rates unchanged.
- FOMC meetings thus far have resulted in (1) No hike & No guidance, & (2) No hike & Reaffirm guidance. Expectation is for 3 cuts of 25 bps from Jun.
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