Markets Morning Newsletters

Huawei and Hong Kong might complicate the markets calm – Macro Markets Morning 8 August 2019

on August 9, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • Without fresh bad news catalysts and with some not terrible Chinese trade data Wednesday’s hiatus in fear and lift in risk assets continued in trade thursday. But that worry has creep back after the close in US markets with news Huawei licences have not been granted and speculation the Trump Administration will break of trade talks if China cracksdown on Hong Kong.
  • So we head into the week’s end with undcertainty growing and a real risk those players wanting to sell the rally could come down to market. We’ll see. For the moment though the S&P was up 1.9% at 2938, the DAX rallied 1.7% to 11845, and US 10’s ran toward 1.8% before reversing the reversal to sit back at 1.72%. Gold is still bid, as is the USD despite aggressive tweets from president Trump.
  • It’s a big end to the week and we’ll all be focussed on the Yuan fix today. But there are plenty of other data and events as well.   

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaHuawei and Hong Kong might complicate the markets calm – Macro Markets Morning 8 August 2019

Wild Wednesday leaves traders none the wiser – Macro Markets Morning 8 August 2019

on August 8, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • Too far too fast? That’s the question I sense many traders are asking themselves at the moment after the protagoniosts in this trade war haven’t escalated the escalation. It doesn’t mean the end of the moves we are seeing, nor that the global growth slowdown is real and intenfiying. But it does mean a lot of bad news has been discounted – maybe too much.
  • So traders in stocks and bonds were thus vulnerable to the inevitable headlines that trade talks are still ongoing and both sides want to keep talking. Happy days right, nah but yea for today.
  • So the S&P bounced back from a low at 2825 to fi a 2883, US 10’s traded 1.6%ish then finished at 1.72!!! NOT a typo, while the Aussie dollar traded 0.6675 but is back at 0.6759. Without fresh bad news catalysts its reasonable to think Wednesday’s moves might continue toward week’s end. 

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaWild Wednesday leaves traders none the wiser – Macro Markets Morning 8 August 2019

Turnaround Tuesday rings hollow but assuages nerves – Macro Markets Morning 7 August 2019

on August 7, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • In the topsy turvy land markets inhabit these days things not getting worse is a sign they are better it seems. So while the notion China was going to set the Yuan fix above 7 Tuesday seemed fanciful to me that was not the case with markets, which seemed relieved. The fix in the 6.96’s was viewed as China not taking the next step in escalation, even though USDCNY is at 7.0235, down 0.32% this morning. 
  • That’s the Yuan offshore and onshore was off its lows helped stocks in the US which have staged a Turnaround-Tuesday with the S&P 500 up 1%. However Europe’s bourses were all lower still as was most of Asia, while the true test of the markets nerve is likely the fact gold is actually up 0.6% at $1472 even though the USD is a little stronger.
  • Messages from the Fed that a series of rate cuts aren’t yet necessary and President Trump tweeting everything is awesome for farmers and the US economy while China issues warnings – on many fronts – says we are not done yet with this funk. Even if US stocks bounce a bit more.

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaTurnaround Tuesday rings hollow but assuages nerves – Macro Markets Morning 7 August 2019

Yuan loses 1.8% to 7.09 global markets roiled – Macro Markets Morning 6 August 2019

on August 6, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • The faux trade battle is now officially a war after China decided this time not to resist the market’s urge to take USDCNH/Y above 7. In framing it that way CHinese authorities also signalled they won’t stand in the way of further weakness yet.
  • But the signal traders in other markets, bond, stocks, commodites, and risk assets got was that the gloves are off and the trade war’s intractability is going to linger and hurt growth and earnings for a protracted period. So they went about repricing expectations about the outlook with gusto.
  • So the S&P fell 3% to 2844, gold rose 1.6% to $1463, US 10’s finished at 1.72%, german 10’s at another record of -0.52%, the Euro surged to 1.12, the Aussie fell to 0.6757, and oil dropped to $55.01 in WTI terms. It’s market funk reaction 101 folks and without a circuit breaker it’s not done yet. Who’ll blink first Xi, Trump, or traders?

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaYuan loses 1.8% to 7.09 global markets roiled – Macro Markets Morning 6 August 2019

Of non-farms, trade, Tariffs, and Market funkiness – Macro Markets Morning 5 August 2019

on August 5, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • Stocks look offered, Australia’s services PMI has just been released and is a shocker. let’s hope it’s not the start of a bad day of services PMI’s because if it is the perfect storm of negative sentiment and feedback is about to engulf a market worried about the future.
  • Regardless of the PMI’s though even good outcomes will do little to assuage the fears of traders who have been acting, based on correlations, like they are worried for the past couple of months. So they news last week – Powell’s messaging, Trumps trade tweets, and the data flow – has informed this worry and seen asset markets react accordingly.
  • So the red on US stocks is expected to coontinue to weigh on global sentiment, copper has collapsed to within an inch of the 2018 low and we are seeing german 10’s hit new record lows. Risk appetite is on the wane folks and we are searching for the circuit breaker – or rather we are in the abbsence of one. 

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaOf non-farms, trade, Tariffs, and Market funkiness – Macro Markets Morning 5 August 2019

Trump’s tariff hits markets for six – Macro Markets Morning 2 August 2019

on August 2, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • That moved fast. Normally you hear the music change before the jump scare in a Horror Movie but not this time as President Trump’s decision to place a 10% tariff on $300 billion of Chinese goods both shocked markets and escalted the trade war another notch.
  • Stocks didn’t miss the import though a 0.9% fall in the S&P 500 to close at 2953 isn’t too bad all things considered. EU stocks will reverse Friday potentially in the manner that silver and gold did last night, but in an equal and opposite way. Gold is $1445 and Silver $16.33 about 3% from the lows of the day.
  • Speaking of lows oil was belted with WTI and Brent down 7 and 6%. Copper got hit too, as did the Aussie, Kiwi, and CAD naturally given the above. The USD is off a little, the Euro off it’s lows.
  • The framework is broken folks, now for non-farms. 

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaTrump’s tariff hits markets for six – Macro Markets Morning 2 August 2019

Fed CHair Powell’s terrible communications skills do it again – Macro Markets Morning 1 August 2019

on August 1, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • I had such high hopes for Jerome Powell when he became Fed chair and he’s not hopeless by anystretch of the imagination as his willingness to be flexible has shown. But gee whiz his communication at the press conferences he’s held is terrible.
  • He did it again Wednesday by not exactly signalling one-and-done but delivering a less dovish message than the market expected or I’d guess he and the FOMC intended.
  • The result was stocks swooned with the S&P 500 off more than 1%, the USD has rocketed to a new high in DXY terms at 98.60 with the Euro at 1.1073 and the Aussie at 0.6844.  Gold lost 1.2% oil reversed earlier strength and bonds reversedthe early selling once stocks fell out of bed. 
  • An interesting couple of days ahead. 

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaFed CHair Powell’s terrible communications skills do it again – Macro Markets Morning 1 August 2019

President Trump leans on the Fed – Macro Markets Morning 31 July 2019

on July 31, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • President Trump leaned beautifully on the Fed telling them to cut big, end QT, and signalling the trade war will continue indefinately. Will they listen? Probably not, but they are likely to cut and signal more to come.  
  • Stocks in the US weren’t too keen on the trade talks warning, but equally a small dip before the Fed and with solid overhead resistance it’s not unexpected. Europe’s big drops though were material. Where the S&P lost 0.25% to finish at 3013 the DAX dropped 2.2% as BoJo doubled down and traders bet brexit isn’t just the UK’s problem.
  • Elsewhere, forex markets were mixed, the Aussie, Kiwi, and Pound down, Euro and Yen up. Bonds continue to rally which helped gold, though copper is down as China takes a measure view of stimulus. Oil was higher and is catching a bid, maybe a big one as inventories fall. 
  • Now for Jerome’s World – coming to you live at 2pm Washington Wednesday. 

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaPresident Trump leans on the Fed – Macro Markets Morning 31 July 2019

BoJo hits the Pound HARD – Macro Markets Morning 30 July 2019

on July 30, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • The Pound was pole axed as it became obvious to markets – FINALLY – that BoJo isn’t kidding when he puts no deal Brexit on the table. Readers know I’ve been talking about this for weeks now but the EU seems to want to play hard ball – we’ll see how things play out GBPUSD fell 1.3% to 1.2217 and the FTSE loved that rising 1.82%.
  • Elsewhere it’s largely wait and see. Asian stocks were down and the S&P dipped 0.15% in the physidcal market while Europes bourses were quiet. Likewise bond markets and forex outside of the Pound was fairly sanguine as traders wait for the BoJ today.
  • Gold was higher in a sign that uncertainty remains and oil lifted too. but it’s very much rangey as we wait for the next shoe to drop. . 

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

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Greg MckennaBoJo hits the Pound HARD – Macro Markets Morning 30 July 2019

US data beats, trump talks currencies, and a week of CB meetings – Macro Markets Morning 29 July 2019

on July 29, 2019

Morning folks – Welcome to McKenna Macro’s Market Mornings.

In a rush? Here’s the key takeaway

  • President Trump is his interventionist self and threatens currency market plays even though his advisers say nothing to see here. It’s another neat passive aggressive play by the president to get what he wants. That said though the USD is building topside momentum across the board.
  • Part of that momentum flowed from the 2.1% Q2 GDP print which beat expectations and showed solid consumption. We still think the Fed will ease so stocks liked this Goldilocks like environement with the S&P 500 up 0.75% to close at 3025.86. Europe was higher too and Asia should have a decent day today too.
  • It’s a big week this week with BoJ, BoE, and Fed meetings, there is plenty of data at the back end of the week too. So it’s going to be a big one for markets. I’ve highlighted some really important levels for a number of markets today as a result. 

Now,  let’s dive in to this morning’s newsletter.   

And for non-subscribers, If you want to have a trail of the daily subscriber service to get this and the 3000 odd words I write – and lots and lots of chart – on markets each day you can sign up here for a trial

And if you missed the weekly sunday – you can read it here.

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Greg MckennaUS data beats, trump talks currencies, and a week of CB meetings – Macro Markets Morning 29 July 2019