Daily BriefsMacro

Daily Brief Macro: The Great Game – 7 Takeaways from G7 and more

In today’s briefing:

  • The Great Game – 7 Takeaways from G7
  • Taiwan’s 2024 Poll Takes Shape as Parties Complete Nominations
  • China Needs to Call in the Cavalry to Bolster Faltering Growth
  • Federal Reserve: Skipping the Pause and Pivot
  • Services Requesting Rate Hikes
  • CX Daily: China’s Effort to Move Mountain of ‘Hidden Debt’ Faces Uphill Climb
  • CX Daily: Chinese Fast Fashion Platforms Could Be Next U.S. Target

The Great Game – 7 Takeaways from G7

By Mikkel Rosenvold

  • Steno Research reporting live from Japan where the G7 meeting in Hiroshima just concluded yesterday.
  • Here’s our 7 main takeaways – both geopolitical and financial
  • What will G7 do about China, world peace and AI?

Taiwan’s 2024 Poll Takes Shape as Parties Complete Nominations

By Manu Bhaskaran

  • Taiwan’s political parties have concluded their nominations for the 2024 presidential polls. Despite voter approval for Tsai’s leadership, victory for her party is not guaranteed. 
  • China would tone down its hawkishness in the run-up to the polls to avoid spooking voters towards voting for the Beijing-skeptic DPP. 
  • Taiwan’s internal political dynamics are also shifting; a strong showing by the new Taiwan People’s Party may show appetite for a middle ground in cross-strait relations. 

China Needs to Call in the Cavalry to Bolster Faltering Growth

By Manu Bhaskaran

  • China is paying the price for the excessive investment and leverage of the past 20 years, while headwinds are building to current components of demand. 
  • Beijing appears to be focused on long-term political and economic challenges. It is downplaying the current downside risks in the belief that these can be sorted out with relative ease. 
  • The short-term recovery is thus at risk of losing momentum. Expect more episodes of economic distress in the public and private sectors. 

Federal Reserve: Skipping the Pause and Pivot

By Jeroen Blokland

  • There can’t be a Pivot. Before the Fed can cut rates to a less restrictive level of unemployment must rise. 
  • There can’t be a Skip and Hike. US Macro Momentum is fading, and investors are underestimating the impact of tighter lending standards.
  • Eventually, the Fed will be forced to cut. Markets expect this, but for the wrong reason.

Services Requesting Rate Hikes

By Phil Rush

  • The Flash PMIs diverge between manufacturing’s depression and rudely resilient services activity. It’s a similar story for the UK, EA, and US as they resist recession.
  • Their unemployment rates are lower than a year ago, except in the UK, where there has been a slight rise of questionable statistical significance.
  • Persistent excess demand is inconsistent with ending the inflation problem. We still expect another BoE hike and two from the ECB. Further Fed steps could extend that.

CX Daily: China’s Effort to Move Mountain of ‘Hidden Debt’ Faces Uphill Climb

By Caixin Global

  • Debt /: Cover Story: China’s effort to move mountain of ‘hidden debt’ faces uphill climb
  • G7 /: China protests G7 communique, saying it interferes in domestic affairs
  • Covid-19 /: China’s post-reopening second Covid wave could peak in late June, expert says

CX Daily: Chinese Fast Fashion Platforms Could Be Next U.S. Target

By Caixin Global

  • E-commerce /In Depth: Chinese fast fashion platforms could be next U.S. target
  • Sentiment /: British firms ‘conditionally optimistic’ about their China operations in 2023
  • AIDS /: HIV/AIDS cases in China fell 13% during pandemic, expert says

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