In today’s briefing:
- Gold’s Building Blocks Giving a Buy Signal
- How Are Fed’s Rate Hikes Impacting EM?
- EM Currencies Under Pressure – IDR Could Be The Next To Crack
- Alpha Generating Trading Strategy of KOSDAQ150 Deletions & Additions in June 2022
- CX Daily: The Troubling Balancing Act Facing Shanghai’s ER Doctors
- UK: Cars Drive GDP Growth Back a Month
- CX Daily: ‘Zero Covid’ Slams the Brakes on China’s Electric Car Industry
Gold’s Building Blocks Giving a Buy Signal
- Factors that typically impact Gold have, on average, reached an extreme
- They include the USD, Bitcoin, and US TIPS Yields which have all trended strongly up till now
- Are we about to see at least a minor but notable turning point that provides a buy signal for Gold?
How Are Fed’s Rate Hikes Impacting EM?
- Notwithstanding the economic uncertainties, with the Fed’s path better defined now than a few weeks ago, I expect the volatility of rates to peak in the coming weeks.
- Uncertainty around the Fed’s rate hikes has been spilling over to the monetary policy paths of EM countries even though many of them have been raising rates since last year.
- If the US rates volatility falls as I expect, then it will be supportive of the short ends of EM rate curves in Latin American and Central European countries.
EM Currencies Under Pressure – IDR Could Be The Next To Crack
- There are more signs of stresses across EM economies. The Turkish Lira has crept past the TRY15-mark against the USD, spurring another bout of unconventional intervention by the authorities.
- Sri Lanka has been rocked by protests and demonstrations, with the makings of macroeconomic mismanagement by the Rajapaksa family. PM Mahinda Rajapaksa’s resignation failed to soothe the anger of protestors.
- Indonesia has benefitted from the upturn in commodity prices while inflation remains (relatively) manageable. But, the Rupiah could be poised for a meaningful correction.
Alpha Generating Trading Strategy of KOSDAQ150 Deletions & Additions in June 2022
- KRX is expected to announce the KOSDAQ150 rebalance in the next couple of weeks.
- An alpha generating trading strategy would be to focus on companies with higher probability of getting deleted in the next round of KOSDAQ rebalance in December.
- These 15 companies are those among the bottom 30 market cap in KOSDAQ150 that are ranked number 16 to 30 in terms of combined market cap and trading value range.
CX Daily: The Troubling Balancing Act Facing Shanghai’s ER Doctors
Shanghai / In Depth: The troubling balancing act facing Shanghai’s ER doctors
Southeast Asia / Southeast Asian exporters step up as China locks down
China-France / Xi, Macron discuss Ukraine war in phone conversation
UK: Cars Drive GDP Growth Back a Month
- UK GDP growth declined in March as new car deliveries got delayed until April. The trend also disappointed amid downwards revisions and unsustainably sourced strength.
- Occasional jumps, mainly in the past, skew headline growth rates higher. GDP’s pace still seems to be quartered in Q2, now from 0.8% to 0.2% q-o-q.
- Stagflationary pressures from extensive cost shocks sustain an uncomfortable policy trade-off. We still expect the BoE to hike in June and August before slowing the pace.
CX Daily: ‘Zero Covid’ Slams the Brakes on China’s Electric Car Industry
In Depth: ‘Zero Covid’ slams the brakes on China’s electric car industry
Shanghai’s Covid hospitals struggle to handle patients with other serious illnesses
Exclusive: China’s ‘Big Four’ banks to start pilot program for retirement savings products
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