08 August 2016 at 2:24 GMT
- The US nonfarm payroll number beat expectations, up 255,000
- We're questioning the USD's potential to rally sustainably in the near term
- Central banks are on deck, including RBI, RBNZ, BoK, Mexico and Chile
By Kay Van-Petersen
Welcome to Macro Monday, your cross-asset weekly call on global markets. For week 32 we take a look at the following:
- The week after the Reserve Bank of Australia and Bank of England rate cuts, disappointing Japan stimulus and another monster beat on US nonfarm payrolls – up 255,000 against a 180,000 estimate, with 40,000 in revisions
- Thoughts on tactical positioning: Questioning the USD's potential to rally sustainably in the near term. Loving the price action in the Aussie and favour AUDUSD longs, with tactical best probably being long AUDNZD into the Reserve Bank of New Zealand. Think that US equities keep breaking higher and volatility keeps degrading lower – sixth consecutive weekly decline in the VIX
- Tail risk insurance and option premiums in general are looking cheap
- No scheduled Federal Reserve speakers (believe it or not), but watch out for RBA’s Glenn Stevens on Tuesday
- On the geopolitical side of things, Donald Trump continues to blow himself up (cons?) and Turkey’s Tayyip Erdogan is heading off to see his main Putin in Russia (Turkey is a NATO member)
- Several charts including: gold, WTI, copper, SPX, DOW, NDX, YEN, EUR, GBP, AUD, DXY
Central banks take centre stage this week. Photo: iStock
The week ahead
- There is a lot involving central banks: RBI, RBNZ (potential inflection point), BoK, Mexico and Chile.
- Plus we will be answering some client questions and what’s that? We’ve upgraded the optionality on our US options offering you say?
- Next week we have minutes from the RBA and the Federal Open Market Committee.
– Edited by Gayle Bryant
Kay Van-Petersen (KVP) is Global Macro Strategist at Saxo Bank, please follow him on Twitter @KVP_Macro and at SaxoStrats. Don't forget Macro Monday – your weekly cross-asset Global Markets Call. Please join us here live again next Monday at: 0830 [SG/HK], 0930 [TOK], 1030 [SYD].