In today’s briefing:
- VanEck GDX Benchmark Switch: Implications for Zijin and Amman
- BoE Survey Says Inflation Persists
- Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 5 September 2025
- Why the US Market Continues to Struggle
- BNM Holds Rate Amid Trade Headwinds
VanEck GDX Benchmark Switch: Implications for Zijin and Amman
- What is Happening: VanEck shifts GDX’s US$19.5bn benchmark to MVGDX on 19 Sept 2025, cutting constituents from ~62 to 44 with stricter purity and liquidity rules.
- Impact: Estimated US$10bn turnover; Zijin excluded, Pan American added, Amman included short-term but copper-driven revenue mix riks future exclusion under MVGDX’s ≥50% threshold.
- What to Do: Fade Zijin’s mechanical exclusion, stay cautious on Amman, and rotate into high-purity beneficiaries (Agnico Eagle, Pan American Silver, Shandong Gold) likely to gain weight.
BoE Survey Says Inflation Persists
- CFOs are telling the BoE that they plan to keep raising prices by more than 3% in 2026. The BoE should take notice, as this survey’s previous warnings have proven accurate.
- Expected increases reflect the passthrough of further wage increases beyond a pace consistent with the target. They exceed even our already hawkish forecasts.
- The BoE is unlikely to realise the sharp drop in wage growth it expects by year’s end, without a shock to break the current regime, bolstering our call for no more rate cuts.
Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 5 September 2025
Hong Kong sentiment improving; closed short on property and turned more constructive amid signs of stabilisation.
Initiated long on China equities, expecting profit recovery from 2026 after prolonged earnings recession.
Regional PMIs broadly above 50, while U.S. remains weak; Fed likely to cut rates in September.
Why the US Market Continues to Struggle
- The US equity markets continue to struggle as global markets continue to gain this year. US dollar weakness has only amplified the US equity underperformance.
- On a risk-adjusted basis, US markets show even worse performance with Sharpe ratios substantially below global peers. This underperformance holds both on a USD and local currency basis.
- Foreign investors have pulled back hard on USD asset purchases this year as seen in import and NIIP data. We anticipate that pressure on US asset markets will continue.
BNM Holds Rate Amid Trade Headwinds
- BNM holds its OPR at 2.75% as expected. Its data-dependent stance signals patience amid trade uncertainties & resilient domestic conditions.
- Benign inflation (1.4% headline, 1.9% core) provides policy flexibility, and a moderate outlook through 2026 supports an accommodative stance.
- Strong 4.4% H1 growth, driven by robust 7% Q2 domestic demand, leads analysts to expect rates on hold through 2025, with cuts if growth weakens.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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