MBCC TH 17th January'23 - "What is going on in the Euro and Yen, where do we see Dollar going? It is all one big macro trade!

The theme of 2022 was higher Dollar (DXY) and lower EM/China/Commodities into 2H as the tight supply chains unwound along with falling demand, but also the massive unwind of $ARKW and Nasdaq as Bond yields rallied as Fed embarked on a rate rising cycle. So the whole growth vs value debate has ended as both have gotten hit, there is no either or for now as they bot have different fundamental factors driving it. But what is interesting in the last month is that the Dollar has fallen, China has rallied massively and EM too along with Bond yield falling, as the market is convinced the Fed is almost done with 1-2 more 25 bps rises and so are chasing the 2021 winners, which are the MEME stocks etc and non profitable companies. Investors are so used to buying and selling the same stuff, but is this time different?

China’s GDP grew by 3% in 2022 Q4 GDP grew by 2.9% y/y Dec. Industrial production +1.3% y/y; beating expectations of  +0.1%, and down from Nov's +2.2%. Dec. retail sales -1.8% y/y; smashing expectations of a -9% plunge, and a big improvement from Nov's -5.9% plunge. Jan.-Dec. fixed-asset investment excluding rural households +5.1% y/y; also beating expectations of +5%, and a modest slowdown from the Jan.-Nov. print of +5.3%. Now we know China was crumbling last year, so how do they get their GDP numbers to bounce hard and fast? Boost infrastructure spending to get property markets under control and developers some cash. How much is sustainable? Where does China go from here and what are the actual physical markets telling us?

We break it all down and the catalysts for Q1. Sign up to find out. Investing is about risk/reward and we move from extreme to extremes, but 2023 is going to be about thinking outside the box and different trades working.