Daily Brief Macro: Steno Signals #182 – Cutting Through the Trump Noise: A Massive Uniform Move Is Happening and more

• Happy Sunday, and welcome to my weekly editorial on everything macro and markets.
• We are now at the final innings of the inauguration week, and oh boy did it surprise and entertain right about everyone (including me).
• From full-blown tariffs from the get-go being the base case, a Trump meme coin being launched into the week and a government sponsored Bitcoin reserve (or at least a clear reference to the crypto space during his first week) to barely any mentioning of crypto, no immediate tariffs on China and very accommodative policies on the fiscal side, which makes the 3% deficit target proposed by Scott Bessent look unrealistic at best.

• Jay Peloski, founder of TPW Advisory and former top-ranked analyst at Morgan Stanley, discusses the tripolar framework of regional integration and competition between Europe, Asia, and the Americas
• Europe faces challenges with common taxation and revenue creation, Asia is increasingly integrated around China, and the Americas have not fully leveraged North America integration and engagement with South America
• Regional competition is seen in key areas such as AI, climate, and defense, with each region vying for economic influence and competitive advantage amid global shifts and challenges

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• An anticipated slowdown in China’s growth in 2025 has implications for other Asian economies, although the mainland’s influence on the region’s growth has lessened over the years.
• In relative terms, Taiwan, Singapore and Vietnam are most exposed to a slowdown in China’s export and GDP growth. Japan, Indonesia and India are least at risk.
• Rising imports and investments from China can potentially be beneficial for inflation and growth in ASEAN economies.

• China’s rise as a global manufacturing hub was fueled by WTO accession in 2001, supported by export-friendly policies, low-cost labor, and rapid infrastructure development.
• A 1994 currency devaluation and a shift to value-added goods boosted productivity as labor costs increased.
• Since the mid-2010s, rising costs and geopolitical factors have driven supply chains to Southeast Asia.

• Greenfield tire production facility to come up in Sindh, Pakistan
• JK Tyre to get US$100 million sustainability loan for expansion
• Sustainability-linked loan a first in India’s tire industry

• President Trump’s inauguration caused volatility in financial markets
• Expectation that Trump will impose significant tariffs on China and other countries
• Fed expected to keep rates on hold at upcoming FOMC meeting

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• Strong gains in oil prices attributed to tightening sanctions against Russia and Iran by outgoing Biden administration
• Market anticipating decline in Russian and Iranian oil exports, with potential disruptions and price increases
• Russian oil exports showing resilience despite sanctions, with logistics and companies excluded from restrictions providing room for maneuvering

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• Basis reflects the US dollar scarcity premium, with a more negative basis indicating greater scarcity
• Positive Euro US dollar basis is primarily driven by short-term tactical cross-border flows, not direct funding dynamics
• Evolution of relative balance sheet dynamics between the Fed and ECB will be a dominant driver of the Euro US dollar basis going forward

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• Mixed steel prices reflected short-term boosts from rising hot metal output and policy support, offset by lingering property sector woes, trade uncertainties, and structural market challenges.
• IO prices consolidated and closed slightly above the 200-day DMA indicating the strengthening of the bullish trend. Bulls risk facing a consolidation or downward correction from these levels. 
• Managed Money, Physicals participants & Others are net short with 129.1k, 5.1k & 18.6k lots respectively across all F&O expiries. Managed Money decreased net shorts while FIIs decreased net longs.

• EM markets reacting to executive orders and remarks from President Trump, particularly focused on tariffs
• EM currencies have shown some strength due to lack of tariff implementation so far
• Market relief since the inauguration, but uncertainty remains around tariff policy and other domestic issues

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