In today’s briefing:
- Technically Speaking, Breakouts and Breakdowns: HONG KONG (February 11)
- Impact of Nextrade Alternative Trading System Going Live on the Korean Stock Market on 4 March
- The Drill – What will world peace mean for markets?
- US Inflation Ending Cutting Cycle
- Indian Trade Body Greenlights ADD On Halobutyl Rubber Imports
- Trump’s Tariffs: Steel First, and Then Reciprocal and Finally Cars
- India: Our View About Inflation Vindicated in Jan’25, Paving Path to Faster Rate Cuts
- When Markets Meet Mercantilism
- Overview #15 – Who’s Afraid of the USD?
- Trump The Disrupter
Technically Speaking, Breakouts and Breakdowns: HONG KONG (February 11)
- Hong Kong’s secular bull market gained after DeepSeek’s announcement ignited shares in the tech sector.
- Kingsoft Corp (3888 HK) broke out to new high after it announced its DAU for WPS exceeded 100mm. Kingsoft Cloud Holdings (3896 HK) is benefiting from the AI rally.
- BYD (1211 HK) broke out to an all-time high after announcing it would offer its ADA service for free. The move caused Tesla (TSLA US) shares to fall.
Impact of Nextrade Alternative Trading System Going Live on the Korean Stock Market on 4 March
- Nextrade (NXT) is an alternative trading system (ATS) in Korea which will start to go live on 4 March.
- Nextrade provided a list of 10 stocks including Lotte Shopping, Cheil Worldwide, Kolon Industries, LG Uplus, and S Oil that will start to trade on NXT starting 4 March.
- Most of these 10 stocks tend to be lower beta stocks with relatively low amounts of share volatility. These 10 stocks are up on average 2.8% YTD, underperforming KOSPI.
The Drill – What will world peace mean for markets?
- All across the world, people are worried about Donald Trump and the uncertainty he will bring to the global order.
- For macro investors particularly, Trump has proven a continuing headache with his weekly insistence on pushing out tariffs news or other bombshells late Friday.
- This past week-end was not exception with Trump’s remarks on reciprocal tariffs and potential tariffs on aluminium and steel.
US Inflation Ending Cutting Cycle
- Intensifying US inflationary pressures significantly exceeded consensus expectations in January, accumulating news potentially worth 1pp in 2026 since the Fed first cut.
- We now doubt there can be sufficient downside news to offset these hawkish pressures, with the Fed on hold in March. That means we see the next Fed move as a hike in 2026.
- Annual core inflationary pressures are not outliers in the US, nor is its labour market resilience, so other central banks should struggle to sustain cutting cycles beyond H1.
Indian Trade Body Greenlights ADD On Halobutyl Rubber Imports
- HIIR from Japan, Russia, Singapore, UK, USA face action
- India producer Reliance Sibur petitions DGTR on dumping
- ADD range from 10% to 70% on the affected imports
Trump’s Tariffs: Steel First, and Then Reciprocal and Finally Cars
- The 25% Steel and Aluminum tariff could have small to modest adverse inflation and GDP growth impacts on the U.S., but reciprocal and more product tariffs create trade policy uncertainty.
- This could amplify the impact of the cumulative tariffs under president Trump’s administration.
- President Donald Trump 25% tariffs on all steel and aluminium imports from March 12 has no exemptions, though Trump did hint at an exemption for Australia on U.S. aircraft imports.
India: Our View About Inflation Vindicated in Jan’25, Paving Path to Faster Rate Cuts
- The RBI forecast 4.4%YoY inflation in Jan-Mar’25, but a 15.7%MoM decline in vegetable prices in Jan’25 enabled headline CPI inflation to ease to 4.3%YoY.
- Our forecast of 4.1%YoY inflation for Jan-Mar’25 remains on track. With food inflation set to recede, we expect CPI inflation below 4%YoY in Apr-Sep’25, enabling 75bp of further rate cuts.
- If the SW Monsoon in Jun-Sep’25 is normal or better, another 25bp rate cut is likely in Dec’25, taking the repo rate to 5.25% by the end of 2025.
When Markets Meet Mercantilism
- The global investment landscape is undergoing a paradigm shift as geopolitical risks evolve from transient shocks to structural forces reshaping market efficiency.
- Historically, markets absorbed episodic geopolitical crises—like oil embargoes or regional conflicts—through short-term volatility and mean-reverting adjustments.
- However, the post-2020 era has seen economic policy fused with national security imperatives, exemplified by techno-nationalism (e.g., U.S. CHIPS Act), weaponized supply chains (e.g., rare earth export controls), and financial system fragmentation (e.g., SWIFT exclusions).
Overview #15 – Who’s Afraid of the USD?
- A review of recent events/data impacting our investment themes or outlook
- China listed HK shares continue to lead the pack in Asia
- India’s rate cuts, tax cuts and election wins are not supporting the market
Trump The Disrupter
- Trump is a disrupter. But it is game change NOT game end.
- If he as we expect unleashes a global deregulation wave, reins in government, implements Reagonomics 2.0 and level the trade playing field everyone benefits.
- We are overweight on US equities and the dollar and believe every market dip is an opportunity to exposure in conviction stocks.
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