Daily Brief Macro: Oil: Revisiting My Forecast and more

• Oil supply is projected to outpace demand growth through 2026, leading to rising inventories and sustained downward pressure on Brent crude to below USD60pb.
• Opec+ output increases, quota disputes (especially with the UAE), and the potential unwinding of voluntary cuts could further flood the market.
• US shale producers and international oil companies are reducing investment due to lower prices, but current Brent levels are not yet low enough to force significant cuts.

• Price edge and stable grades help Indonesia stage a good show  
• US demand strengthens despite Trump tariffs  
• China demand softens, Japan slides as tariffs take effect  

• In this insight, we discuss the increasing popularity of EB issues with treasury shares as the base assets in Korea. There were seven EB issue announcements in Korea in June.
• Going forward, more Korean companies are likely to issue EBs in the next several months, prior to the actual official changes in regulations of treasury shares in Korea.
• These companies that issue EBs using treasury shares as underlying assets are prime targets of short selling/underperformance.

• Dollar decoupled from US rates and equities, investors expected to chase dollar lower
• Dollar positioning not as crowded as perceived, global holdings of US equities still large
• Unlikely for significant repatriation of Japanese foreign bond investments, focus on rebalancing rather than one-way repatriation; implications of upcoming election on Yen uncertain

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

• How did our major investment themes do so far in 2025?
• Review of the performance of the major markets and asset classes we focus on
• We revisit our outlook for each of those asset classes for H2 25

• Regional rotation places DM Europe as clear consensus overweight among active Global equity funds.
• Seventy-Five percent of funds are overweight UK stocks, with 69.6% overweight France and 70.2% overweight the Netherlands
• Novo Nordisk, ASML, Schneider Electric, and AstraZeneca remain key holdings, while a resurgence from European banks and select names like Spotify and LSEG is also starting to stand out.

• UK active funds are buying back in to the UK Homebuilding sector, with ownership showing consistent increases from the lows of early 2024.
• Over the past six months, Homebuilding recorded the third-largest increase in fund participation, trailing only Agricultural Commodities and Pharmaceuticals.
• At the stock level, the sector remains highly concentrated. Four companies — Taylor Wimpey, Bellway, Barratt Redrow, and Persimmon — account for 81% of the total allocation.

• After a slow start in Q1, ASEAN has benefitted from front-loading of exports and favourable tariff differentials with China in Q2. But the momentum is likely to falter in H2.
• With the 9 July deadline for reciprocal tariffs approaching and limited progress in trade talks with the US, tariffs could increase for the region within days.
• Even if tariffs remain unchanged, exports and growth will likely slow as businesses and consumers adjust to higher costs and inventory restocking in the US gives way to declining demand.

• DM swap spreads exhibit correlation but also have idiosyncratic drivers
• Central bank balance sheet evolution and money market rates are identified as top drivers of DM swap spreads
• Fed expected to continue QT, ECB and BoJ expected to normalize balance sheets, impacting swap spreads

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

• Overweight, Indian equities with a bias towards industrials, property and consumer stocks.
• But investing in India is  ultimately about the domestic story
• While its progress in AI, the green transition, and advanced manufacturing lags far behind China—disappointingly so—business cycle indicators are improving, and the multi-year structural growth narrative remains compelling.