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APAC brief 19 Mar
Markets trade thin ahead of central bank risks: It’s said that money makes the world go around. And given central bankers control the money of the world, it is they who decide when the turning starts and stops. Described this way, central bankers role in the economy sounds Bond-villain-esque. That’s entirely unfair of course – only fringe-dwellers would suggest they are so malevolent. But recent history, based on experiential evidence, suggests that when it comes to financial markets, the actions of central bankers take primacy over all other considerations. This phenomenon must be a transient thing – a part of some other historical process. All high priests eventually lose their power. For now, though, it feels the age of the central-banker has reached its epoch, with markets dutifully obeying their rule.

Markets pace the margins: The reason for the foregoing expatiation is that financial markets, owing to a dearth of economic and corporate data, have traded quietly in anticipation of several key central bank meetings this week. Naturally, the biggest of them all is Thursday morning’s US Federal Reserve meeting. In preparation for the event, traders are pacing the markets’ fringes. Risk appetite on Wall Street is still rather well supported. Volumes are below average but having broken key-resistance at 2815 on Friday, the clearing of that technical level has invited in some buyers. Rates markets are largely unchanged, although US bond yields have ticked slightly higher across the board, while the US Dollar is relatively steady, albeit well off its recent highs.
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Flowless rally - APAC brief 18 Mar
A flowless rally: It’s being dubbed the “flowless rally”. Equities are ticking higher, but without the fundamental buying-support one might assume. This is especially so when considering the milestone achieved on Wall Street on Friday. Finally, the 2815 resistance level has tumbled, and the bulls have cautiously, quietly rejoiced. There are yellow flags popping up here and there, however, and that is making participants wary. It goes back to this “flowless rally” business: the latest leg of global stocks big recovery isn’t being supported by investor flows. In fact, investor flows look to have diminished somewhat. The reasoning behind this move is somewhat speculative. The impact of share buybacks is one popular argument. Whatever the cause, confidence isn’t accompanying this rally.


Economic conditions deteriorating: Maybe market participants are still scorned from the market correction in 2018. A bitterness and cynicism stemming from that is understandable. Much of the frustration comes, it would seem, from a widespread recognition that this rally has come in the absence of solid fundamentals. On the contrary, if looking at the macro-outlook, there are more reasons to be bearish than bullish right now. Global growth is (almost) irrefutably slowing, and some of the geopolitical sore-points dictating sentiment, like Brexit and the US-China trade war, are showing little new signs of progress. A major factor keeping this rally alive in riskier assets, perhaps concerningly, is a little case of “fear of missing out”.
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MP's Vote To Extend Article 50 As The Brexit Saga Continues - EMEA Brief 15 March


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Delaying the pain of uncertainty - APAC brief 15 Mar
Delaying the pain of uncertainty: The pain of uncertainty, when it comes to two of the world’s big macroeconomic issues, looks likely to persist for a little while yet. Two stories, to be elaborated on in a moment, defined market-headlines overnight: a meeting between US President Donald Trump and Chinese President Xi Jinping won’t happen until at least April; while the UK House of Commons has voted overwhelmingly to extend the Brexit-deadline, though with no clear path forward from here. The frustration is palpable, and its apparently resulted in a level of exhaustion for financial markets. After a bit of chop, Wall Street is trading in a cold-fashion, only slightly down for the day, handing the Asian region little inspiration for the day ahead.
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May there be hope for Brexit? Pound rallies after no-deal rejection - EMEA Brief 14 March
The pound rallied to a new high after British MP reject leaving the EU with a no-deal. As the rejection passed by 312 votes to 278, the pound gained 2% against the dollar, reaching new highs for the year of 1.3339, as investor's received the no-deal rejection as good news for the future of the British economy.

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APAC brief 14 Mar
Traders see “goldilocks” conditions in US: Both European and US shares rallied overnight. For the latter, the term “goldilocks” has been bandied around. That is: growth in the US, though not as strong as it has been in the recent past, is still solid, while inflation risk is presently low, meaning the US Fed will likely remain in a neutral position. A reminder of this dynamic came in the second of two major inflation releases out of the US this week. PPI data showed a weaker than expected print, following the night prior’s soft CPI numbers. The effect has been static bond yields, a slight lift in the prospects of a US rate cut this year, and a US Dollar that has pulled-back from its highs.

US stocks fail to jump significant hurdle again: Perhaps most significantly for those with a bullish disposition, US equities have responded to the “goldilocks” dynamic in the most enthusiastic way. Once again, the S&P500 has challenged crucial resistance at 2815 – that notorious level at which the market has broken down on nearly four-or-five occasions in the past. Promisingly, as it applies to last night’s trade, the sector responsible for driving the S&P500’s gains is information technology – primarily Microsoft and Apple Inc. Recall, it was the en masse dumping of the tech-giants that led US stocks lower in Q4 last year. It’s hope that their continued recovery may be a bellwether, for the bulls, of further upside to come.
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No-Deal Brexit to be voted after May's deal rejection - EMEA Brief 13 Mar
The pound ticked higher after having dropped on Tuesday after Theresa May’s amended Brexit deal rejection. Today’s vote in the UK parliament whether to leave the EU without a deal is unlikely to provide excessive pressure on the sterling in case the proposal is rejected, however downside risk exists.
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Financials drag on the ASX: The ASX200 was legged in the final stages of trade yesterday. It was led by a sell-off in major financial stocks, after a media address made by Australian Treasurer, Josh Frydenberg, during which he announced the Liberal government would not pursue the eradication of trailing commissions for financial advisors and mortgage brokers, as prescribed by Kenneth Hayne QC in the final Banking Royal Commission report. It turned what was an otherwise solid day for the ASX200 on its head. Naturally, given their substantial weighting in the index, a bad day for the banks more-often than not leads to a pull-back in the market. That notion certainly proved to yesterday and looks to prove true again this morning.

A good lead, but a weak start: Thus, at time of writing, SPI Futures are pointing a 7-point drop at the open. With half-an-hour left in Wall Street trade, it won’t be for a lack of a positive lead that this will be so. It’s been a reasonable day for US stocks, rallying just over 0.3 per cent, according to the S&P500. Market participants, it would seem, have had hurled back at them, when it comes to the banks, the political risk to the industry, they’d thought, had disappeared following the final report handed down by the Royal Commission. This being the case, the simplest answer for the ASX’s likely sluggish start today is this returning shadow of regulatory uncertainty over the financial sector.
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May Secures 'legally binding changes' to her Brexit Deal; Pound Rallies - EMEA Brief 12 March
Theresa May has announced that she has secured "legally binding changes" to the withdrawal agreement ahead of the pivotal vote on her deal in the House of Commons this evening. Specifically, the changes mean that the Irish backstop would not "become permanent".
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Up, down, turnaround - APAC brief 12 Mar
Up, down, turnaround: It’s been a bipolar market of late. Global stocks are moving in unison, and have swung from broad-based losses on Friday, to broad-based gains overnight. US equities are naturally the exemplar and are a responsible for driving overall risk appetite. With an hour left in trade (and as a quick aside, Wall Street closes at 7am AEDT for the next few weeks) the S&P500 is up well over 1 per cent. It’s been a day of relatively low activity. However, breadth is expansive: over 90 per cent of stocks are higher for the session. After last week’s losses, the S&P500 is some way from the key resistance at 2815. The fundamental strength of the market will be assessed by its ability to rechallenge that level.

ASX to hit the ground running: It was topsy-turvy yesterday, as far as the ASX’s behaviour went within the context of the global rally in equities. Unlike during stages of last week, the ASX200 was a thin-cut of red in an otherwise sea of green, when looking at the global equity index map. Australian stocks will join the party this morning, and according to the SPI Futures contract, will bust out of the gate at today’s open with a 34-point rally. Inducing from European and North American trade what we might see today: materials stocks may follow their international counterparts, energy stocks may track a lift in oil, and Australia’s growth stocks in the biotechnology industry should follow US tech’s run higher.
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BoE Tightens Bank Liquidity Controls - EMEA Brief 11 March
Amid the political uncertainty surrounding Brexit, the Bank of England has advised UK lenders to triple their holdings of liquid assets in the run-up to Brexit to prepare for a forecast market meltdown if the UK leaves the EU without a deal later this month. Banks are also being told to adjust their balance sheets on the assumption that they will not be able to swap sterling for USD.
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Week US jobs data - APAC brief 11 Mar
US NFPs: The final bastion of global economic growth is showing cracks in it walls. Arguably last week’s key-release, US Non-Farm Payrolls disappointed market participants over the weekend, printing well below expectations. It wasn’t a clear-cut, poor print. The unemployment rate dropped to 3.8 per cent and wage-growth climbed to 3.4 per cent. The shocker was the headline number: forecast to reveal a jobs-gain of 180,000, the US economy only added 20,000 last month. It’s given rise to concerns that, given how low the unemployment rate is in the US, and that wages are finally picking-up, the long-thriving US labour market has finally reached full capacity for this economic cycle.

US stocks fall, but losses were limited: That would be bad news for the US and global economy. Despite this gloomy picture painted by NFPs, and an initial knee-**** reaction, traders sought to see through the data. It was a bad day, ending a bad week, for risk assets on Friday – that’s no question. But given that the weak US jobs figures punctuated a series of weak global economic data, which solidified the fear the global economy is sharply slowing, the reaction in markets was fairly contained. Global stocks certainly put in their worst weekly performance for the year. However, Wall Street’s daily losses were contained to a relatively modest 0.21 per cent, if judged by the S&P500’s performance on Friday.
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Huawei Sues The U.S. Government - EMEA Brief 07 March
Global tensions reach new heights as Chinese tech giant Huawei files a lawsuit against the U.S, claiming that a law that bans government agencies from buying the company's equipment is unconstitutional. This comes after Huawei's CFO also filed legal proceedings against Canada. Meanwhile, there has been a report that North Korea are moving to rebuild a nuclear missile site, following a break down last week in the summit between Trump and Kim Jong Un. 
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Australia's slowdown - APAC brief 7 March
Australian data draws global interest: Australia’s remarkably weak growth figures captured attention, both locally and abroad. The numbers conveyed in yesterday’s GDP were truly disappointing. Growth in the final quarter of 2018 was a paltry 0.2 per cent, and after another set of revisions to previous data, the annualized growth rate fell to 2.3 per cent. Each figure was quite an undershoot of expectations: for one, economists were expecting the quarterly number to come-in-at 0.3 per cent in seasonally adjusted terms. Now, on the face of it, this may not seem too bad. However, this estimate had been revised down several times in the week preceding yesterday’s GDP release, from around 0.6 per cent, in response to other underwhelming Australian economic data.

RBA’s dissolving logic: As it stands, the picture the GDP print painted of the Australian economy blows the RBA’s base case out of the water. Recently, the RBA had become candid in its assessment of the (let’s say) “crosswinds” in the domestic economy. So cognizant of the risks, they’d adopted a “neutral” stance to monetary policy moving forward into 2019. But still, their optimism remained: growth would remain strong enough to lead to an even tighter labour market, which would eventually feed into a pick-up in wages growth, and subsequently the inflation and consumption growth long-missing in the Australian economy. It was this view that fundamentally created the bedrock for the RBA’s policy bias and supported their hope for improved local economic conditions.
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Aon Plc considers $24 billion bid for rival Willis Tower Watson Plc - EMEA Brief 6 Mar
Trading in Asia was mixed as investors wait for more clarity on the US-China trade deal. The top performer was Shanghai Composite which was up 0.7% while Japan’s Topix was down 0.2%. 
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Trump states he will cooperate with House Judiciary Committee Investigation  - EMEA Brief 05 Mar
Trump is subject of large-scale investigation by the House Judiciary Committee who have sent requests for documents to 81 individuals. The investigation will look into alleged obstruction of Justice, corruption and potential abuses of power. 

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American stocks fall - APAC brief 5 March
American stocks fall: Wall Street looks poised to register its worst daily performance since the start of the year. The technical action was sweet: another early challenge of 2815 – the price ran slightly above that – before the bears swooned, and traders “pulled the trigger”. It’s been a day of selling since, with the S&P500 down 0.6 - 0.8 per cent, at time of writing. It’s nothing to be too concerned about, of course. This is nothing like the behaviour witness at the end of last year. It’s just that the price action has the commentariat ready to call the long-awaited reversal in US, and global equities. The closing price will be crucial today, but a bearish engulfing candle already signals looming weakness.

Bulls fail to break technical resistance: It’s the considerable lack of upside momentum, coupled with the breadth of the sell-off, that is noteworthy. After all, again, the S&P500 is only down 0.6 per cent on the day. The RSI is pointing its head downwards, though, clearly breaking with its recent upward trend. Intraday breadth is very poor: only around 20 per cent of stocks are higher for the session, and every sector is presently in the red. Right now, the triple top at 2815 – the formidable level that saw the bulls bail-out on as many occasions in Q4 2018 – has proven its might. The discourse might once again shift from here to where the next low could be registered.
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Vix Offers on Platform
Get your answer on Community - "Can you please clarify what the Volititily index tracks on the platform. I see DFB, Mar and Apr offers. Does the March track the March 19 future, the Apr track the Apr19 future? What does the DFB track?"
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Economic stagnation; ECB and other central banks; range trading - DailyFX Key Themes
As pattern recognition machines, humans want to avoid a repeat of a painful event from the past, but we don’t always bore down to the root of the problem – especially when the situation is complicated or inconvenient (such as chasing mature and fundamentally dubious trends). At present, we have a range of high-profile fundamental themes that could ease experience another flare up that coincides with the eventual turn of the markets (trade wars, monetary policy flub, fiscal policy flub, political crisis, diplomatic relationships breaking down, etc). Yet, in a neutral market environment, all of these issues could be absorbed readily with little more than a brief injection of volatility.
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US-China Trade Deal 'moving along nicely' - EMEA Brief 04 Mar
Reports over the weekend have indicated that the US and China are in the later stages of trade talk discussions in a deal which could see tariffs and sanctions lifted on both sides. Donald Trump tweeted over the weekend asking China to remove all tariffs on agricultural products and that trade talks are "moving along nicely". 
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The latest from Trump - APAC brief 4 Mar
Are things not so bad after all? It appears there’s emerged a self-reinforcing belief that economic fundamentals aren’t as bad as once thought. There’s not a simple binary that can be reduce out of this – a clear “risk-off” or “risk-on” signal. It’s clear there remains a general sense that the global economy is entering a soft-patch. But in that, is the key: slower growth is taken as granted, however the extent of such a slowdown is ostensibly being revised. There isn’t quite (just for the moment) the same level of catastrophism filling the news wires in financial markets right now. It raises the question whether the fundamentals have changed at all, or whether its actually market participants’ perception of the fundamentals that’s changed.

Improved perceptions towards fundamentals: An answer to that one is very difficult to grasp just looking at the price-action. To rattle-off one of the stalest of undergraduate clichés: perception is reality. In the case of traders, the rosier perception of economic fundamentals has inspired the emergence of a virtuous cycle in financial market bullishness. Very often, a break from fundamentals, and a movement towards some imagined state of affairs, gives birth to a sufficient enough divergence between sentiment and hard-data that a relatively small catalyst can spark a jolting correction in market-pricing. That may well be the situation market participants are operating. A blithe optimism or not, some key markets are approaching now key inflection points.
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Planned interview with Jim Rogers
Hey all - just to let you know that we have an interview planned with Jim Rogers on Monday and we want to make sure our clients have the opportunity to submit any questions they may have. You can do so by leaving your question on this post.
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Chinese factory activity shrinks again- EMEA Brief 01 Mar 2019
Chinese factory activity reduces for the third month in a row with Caixin/Markit Manufacturing PMI at 49.9 for February. A reading above 50 shows expansion
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Chinese bull run - APAC brief 1 March
“A tale of two cities”: As far as Australian markets go, they’ll be defined, broadly-speaking, by the unfolding “tale of two cities” story in global markets. That is: the renewed optimism about the US growth outlook, versus the deterioration in global economic prospects, led by the slowdown in China’s economy. The Australian economy is heavily geared to the latter, so the hunch is our fortunes will be more greatly impacted by that variable. But it won’t be clear cut, and that’s where the uncertainty and opportunity may emerge. The last 24 hours of trade presented a series of curious themes for market participants, with the subsequent price action patchy. What transpired did shift the narrative somewhat, setting the foundations for an interesting week next week.

Chinese (and global) growth: First, the darker side of (the all too crude) binary: a view on what’s happening in China and the world ex-American economy. The Asian session yesterday was preoccupied first by political theatrics, then macroeconomic information. The Cohen testimony gripped attention, however proved more a distraction as far as traders’ were concerned. The falling apart of the Trump-Kim talks in Hanoi disturbed markets, mostly in North-East Asian markets, such as the KOSPI, before the conclusion was drawn that a grand-peace pact between the US and North Korea was an absurd fantasy to begin with. The true focus was on China’s PMI numbers during our Asian trade – and how, once more, very disappointing they were.
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Post in Indices
Join the debate: "Here is a great chart I originally posted on the forum back in 2016 and I'm very pleased to see it's recently been updated. It gives a valuable insight into the mind set of 'the punters' and has become famous over time as it is so revealing."

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