Daily Brief Macro: More USD Depreciation on the Cards – Who Wins and more

• 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.

• Daniel Dicker is a seasoned oil trader and expert on energy markets
• Oil has become less important in the macro landscape, with its influence on stocks decreasing over the years
• Oil’s current price fluctuations are driven more by supply and demand factors rather than financial speculation, with no signs of improvement in the near future, despite recent macro developments.

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• Happy Wednesday from Copenhagen.
• Trump now has to deal with a reality where Russia is not going to end this war without being forced to—probably always the case—but Trump allowed himself to be friend-zoned by Putin in the run-up to these peace talks.
• Various media outlets have already reported that a sanctions package is being prepared to put pressure on Russia, and in the following, we’ll try to assess the potential content and ramifications of such a package.

• Imports frontloaded before tariff rises seemingly disappeared in broadly unrevised US GDP data. Underperformance is exaggerated as an unwind, or revisions, are likely in Q2.
• Final domestic private sales maintained their rudely bullish US trend while drifting back towards stagnation in the EA and are distorted by residual seasonality in the UK.
• Superior US productivity trends preserve its structural attractiveness. Unemployment’s stability also suggests monetary conditions are near neutral, with easing unnecessary.

• There is a supply demand mismatch globally, particularly at the long end of the curve
• Rising term premiums are a concern, especially in the US due to fiscal uncertainty
• While the speed of the recent moves is notable, there are no major financial stability concerns in the US, but Japan may need to take action to address volatility in the super long sector

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

• Global dry bulk trade is facing its sharpest contraction in nearly a decade, with year-to-date 2025 volumes down 1.5%, according to DBX data.
• This decline is primarily driven by weakening demand from China, rising domestic production in key markets, geopolitical instability, and weather-related disruptions.
• Coal, iron ore, and grain exports have borne the brunt, while bauxite flows remain robust. 

• The Bank of Korea reduced its base rate by 25bp to 2.50%, as widely anticipated, in response to a marked deterioration in growth prospects and persistent domestic demand weakness.
• While inflation remains stable and near target, the MPC flagged rising household debt and FX volatility as key risks, indicating future rate decisions will carefully weigh financial stability against the need for further stimulus.
• The policy outlook remains dovish, but the pace and extent of additional easing will depend on incoming economic data, developments in global trade policy, and the evolution of financial market risks.

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• For the week ending 23/May, U.S. crude inventories fell by 2.8m barrels (vs. expectations of a 1m barrel build). Meanwhile, gasoline and distillate stockpiles unexpectedly fell.
• The EIA reported a 101 Bcf storage build, slightly more than the 98 Bcf forecast. Storage levels are 3.9% above the five-year average.
• Chevron will cut 800 Texas jobs in an effort to reduce its global workforce by 20%. TotalEnergies is selling its 12.5% Nigerian offshore stake to Shell for USD 510 million.