Read on the Trading Floor - 22 Jan 2024
Today’s focus… waiting game
Macro Themes At Play
Theme 1 - Trump, Haley and....
Theme 2 - BoJ
Theme 3 - The slide in Chinese assets continues to generate excellent material for FinTwit
Theme 4 - Bitcoin.... the magnetic drift towards 40k continues
Further reading and listening of note
Theme 1 - Trump, Haley and …..
DeSantis has dropped out and kissed the ring, leaving Trump as the odds-on favourite to take the republican nomination (if not the WH given he also leads Biden in the polls). The post-mortem has started on why such an early favourite with such an impressive CV has struggled to take votes away from Trump.
Haley is also on the backfoot in her home state which after New Hampshire is the next key battleground (Feb 24th). Trump enjoys the backing of the two state senators for SC as well as the Gov. Will the GOP keep her campaign rolling just in case Trump's bid for re-election ends in the courts or is it more beneficial for her to drop out now and make it Biden vs Trump 2.0. Afterall Trump is clearly in the lead as Biden's satisfaction rate is impressively low given stocks are at ATH and the $5trillon fiscal support still flooding through the system.
Further reading form our curated "US elections" channel
FiveThirtyEight - Immigration, the economy and foreign policy could decide the New Hampshire primary
The NY Times - G.O.P. Donors Face a Dilemma as Another Trump Rival Falls
- #888 - Trump vs Biden
Source: FiveThirtyEight
Theme 2 - BoJ
This is an extract from The Morning Hark - Jan 22)
"All anticipation and potential volatility has been drained out of this policy meeting with the events of the first three weeks of the year. Official comments, weaker data and, of course, the earthquake have all taken the wind out of the hawks’ sails as a “nothing to see here” event looks the most likely outcome. Hence rates on hold at -0.1% and the YCC bands to remain at their current levels. The most interest will probably centre around the outlook report and in particular any changes to the growth and inflation forecasts. Both measures are expected to be trimmed but by how much? Seems likely that given the rally in US yields and no movement by the BoJ the JPY will continue to trade weakly into the all important spring wage negotiations, which the BoJ have previously flagged, as being crucial for the future path of rates in Japan."
Brent Donnelly am/FX - BoJ and RBNZ
Bloomberg - BOJ to Hold as Market Seeks Hints on Inflation Progress Needed to End Negative Rates
Theme 3 - The slide in Chinese assets continues to generate excellent material for FinTwit
Are we all just waiting for the stimulus?
Alexander Campbell - Time for a Bottom in Chinese Stocks?
Some further reading of note from our China channel
SCMP - Red Sea crisis: China firms eye Plan B ahead of Lunar New Year as container prices soar further
ZeroHedge - China Stocks Crash Through 'Snowball Derivatives' Trigger Levels Overnight
Theme 4 - Bitcoin.... the magnetic drift towards 40k continues
Source Tradingeconomics.com
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Top Pieces
Discovered on Harkster.com
Further reading and listening of note
The Next Economy by
- Two Pivotal EventsNordea - Major forecasts: It’s a NO to big near-term rate cuts
MacroHive - Markets to Watch: PCE to Push Fed Into 50bp in March?
JPM - Global Rates: January ECB meeting and Euro rate markets
Steno Research - PMI Watch: Time for the much awaited rebound?
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