In today’s briefing:
- UK: Spurious H1 Surge Again
- The Drill – When the Facts Change, So Do We
- Asian Equities: Launching Our Asia Ex Japan Model Portfolio
- Commodity Equity Monitor: May 2025 Issue
- CX Daily: China’s Exporters Get More Help to Withstand Trump’s Trade War
- [ETP 2025/20] WTI Skittish on Trade Hopes and Oversupply Fears; Henry Hub Falls on Tepid Demand
- Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 16 May 2025
UK: Spurious H1 Surge Again
- GDP’s resurgence caught the consensus off guard, as it failed to recognise the residual seasonality still skewing activity growth into the first half of the year.
- The 0.7% q-o-q outcome for Q1 matched our forecast and leaves a powerful carry-over to Q2, where GDP seems set to exceed the BoE’s 0.1% forecast at about 0.4% q-o-q.
- Strength discourages another policy rate cut. Disappointment in H2 is the hangover, but we doubt it will motivate renewed easing amid excessive price and wage inflation.
The Drill – When the Facts Change, So Do We
- Greetings from Copenhagen.
- The global macro landscape is shifting rapidly, with U.S. policy priorities evolving just as quickly.
- The administration is now 1) refocusing on the Middle East, 2) signaling that a Ukraine–Russia deal is inching closer, and 3) initiating currency policy discussions with Asian nations—many of which are active FX manipulators.
Asian Equities: Launching Our Asia Ex Japan Model Portfolio
- We launch the Emmer Capital Asia ex Japan Equity Model Portfolio. We shall measure the absolute and relative performance (vi-a-vis MSCI Asia-ex-Japan Index) of the portfolio and rebalance it monthly.
- Our sector and market choices are governed by macro-economic and policy considerations. Asian consumption support, inflation divergence strengthening Asian currencies and market leading domestic exposures are some of the themes.
- We are overweight HK/China, India, Korea; underweight Taiwan, ASEAN. We like consumer discretionary, communication services and technology, despite the latter’s global footprint. We prefer high ROEs and dividend yields.
Commodity Equity Monitor: May 2025 Issue
- Outperformers: Uranium, Coal & Battery Materials. The strongest performers this month were uranium and thermal coal producers, which benefitted from renewed institutional interest and long-term structural tailwinds.
- Underperformers: Gold Miners, Energy, and Select Coal. Despite a +5.2% increase in the gold price, key miners such as Barrick Gold (-7.6%) and Agnico Eagle (-0.9%) underperformed
- Equities vs Commodities. There was a notable decoupling between equity and commodity performance this month.
CX Daily: China’s Exporters Get More Help to Withstand Trump’s Trade War
- Exporters / In Depth: China’s exporters get more help to withstand Trump’s trade war
- China-U.S. /: U.S. tariff relief offers limited reprieve for Chinese small-parcel exporters
- Takeaway /In Depth: JD.com wants to unseat China’s takeout king
[ETP 2025/20] WTI Skittish on Trade Hopes and Oversupply Fears; Henry Hub Falls on Tepid Demand
- For the week ending 09/May, U.S. crude inventories grew by 3.5m barrels (vs. expectations of a 2m barrel fall). Meanwhile, gasoline and distillate stockpiles unexpectedly fell.
- The EIA reported a 110 Bcf storage build, slightly lower than the 111 Bcf forecast. Storage levels are 2.6% above the five-year average.
- Saudi Aramco’s Q1 profit fell 4.8% YoY but beat estimates by 2.8%. Morgan Stanley downgraded BP to Underweight from Equalweight, while HSBC lowered Chevron to Hold from Buy.
Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 16 May 2025
US inflation remains elevated; interest rates likely to rise further amid persistent debt issuance and economic uncertainty.
India and China show signs of easing policy; monetary conditions improving in China, rate cuts expected in India.
Japan faces growth constraints due to full employment; focus should remain on globally exposed companies, not domestic demand.
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