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China re-opening hopes rising, CNH.. / OPEC+ unch prod / AAPL buybacks / NFP not that strong

  • Dec 5, 2022
  • 3 min read



  • OPEC+ Oil Production unchanged, implementing the hefty 2 million barrel-a-day reduction agreed at its last meeting, getting cold out there !

  • China may announce downgrade of Covid-19 to less strict category of Management as Early as January

  • It took the Fed a decade to get up to their 2% inflation target and it might take the Fed another decade to get it down to their 2% inflation target

  • Fed's Barkin: labor supply likely will remain constrained - depends what data one is looking at (see thread below)

  • Manufacturing orders from China down 40% in unrelenting demand collapse

  • Morgan Stanley upgrades China Stocks on reopening bullishness..raised to overweight, had been equal-weight since January 2022..Recovery ‘set to be bumpy’ amid earnings pressure, Wang says >> remember on the way down in price, many said they became uninvestable, now price action has changed, guess what...! others will do the same...

  • CBI warns UK faces 'lost decade' of growth unless Rishi Sunak gets 'serious'

  • APPL bought back its own stock to the tune of $90bn in Q3, while investing $11bn in its business, net balance-sheet worth down $50bn..

 
Markets :

  • TLT just registered its second-largest inflow in the history of the ETF on Friday. Is this a sign that the worst is over for US sovereign duration? NO, in fact it looks overdone now, the UST curve dec 2023/24 now nearly 140bp inverted, very punchy 'recession calls'

  • SPX500 stable, after choppy NFP action, ended up unchanged, China stocks up very decently again on hope reopening gaining traction (base case remain they have and they will reopen, not if but when..) >>> slowdown is positive for stocks, when markets chase liquidity, as it is now !... >>> the BIG question is when does risk starts to flip from chasing liquidity to weaker fundamentals, depends on who you listen, and all a lot harder to call if you leveraged of course, best case for now remains weaker macro data in Q1 2023 in the US

  • USDollar still weak, although USDJPY looks to have done enough for now, a good 10% move down from BoJ interventions near 149JPY, time to cover USDJPY shorts..>>> never underestimate BoJ.... CNH slowly catching up...as it should on reopening calls, now 6.9400.. AUDNZD done enough in short-term!..EURCHF (chsart) preparing a move up into year-end? (GBPCHF similar pattern...)

  • Crude stable just above $80 WTI

  • Next big rendez-vous are next week with all FOMC, ECB, BoE and SNBN meetings


 



IT sure got interesting last few days... 2s dropped about 25/30bps - whole curve lower - usd and risk same - not even an apparent strong NFP - in fact you could argue some parts of it was weak - depends what you want to look at ! Interesting few details about US employment data … https://twitter.com/macroalf/status/1598697103613513728?s=48&t=XPCrgH_0zBDvLaTZtdwR1A


Apple supplier Foxconn expects to see full production resume at a COVID-hit China plant around late December to early January, after unrest at a major iPhone factory in Zhengzhou






Price action become positive; many will start chasing again..




EURCHF preparing a move up into year-end? (GBPCHF similar..)



Have a great start to the week

Team PVM


 
 
 

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