Shippers rerouted vessels as China began its most provocative military drills in decades around Taiwan, creating logistical headaches for global supply chains. China’s military kicked off three days of live-fire military exercises around Taiwan in response to US House Speaker Nancy Pelosi’s visit, even as Taipei played down the impact on flights and shipping. Live-fire drills in six areas surrounding the island began as planned at noon Thursday, Chinese state broadcaster China Central Television reported. The PLA’s Eastern Theater Command conducted long-range shooting drills in the Taiwan Strait around 1 p.m. on Thursday, CCTV said, adding that a “precise strike” was carried out in an unspecified area in the eastern part of the Taiwan Strait. It gave no other details.

함의: 십수년만의 실사격 군사훈련이 대만 주변에서 시작되었고, 목표지점이 공개되지 않은 정밀타격도 포함됐음. 광범위한 훈련에 따라 공급망에 지장을 줄 움직임도 보임.

For a group supposedly keen on dialing back forward guidance, Fed officials sure have been doing plenty of guiding this week. A drop in the benchmark Treasury yield toward 2.5% seems to have been the trigger, sparking a rush to the microphones from an array of policy makers amping up the hawkish rhetoric lest we had forgotten their commitment to fight inflation. Fed Bank St. Louis President James l Bullard said he favors a strategy of “front-loading” big interest-rate hikes, while his Richmond and Minneapolis counterparts -- Barkin and Kashkari -- noted the importance of tackling inflation. San Francisco Fed President Mary Daly endorsed a half-point September hike, but didn’t rule out a 75-basis-point move. The jaw-jaw has pushed yields back up again, and odds on a three-quarter point rate increase next month have gone up. But investors continue to bet the Fed will be back easing policy next year with between two and three rate cuts still priced in.

함의: 미국 국채 10년물 수익률이 2.5%에 도달하면서 중앙은행 인사들이 통화정책에 강한 의지를 표명했지만, 시장 참여자들은 여전히 내년 2~3차례의 금리인하가 있을 것이란 정책완화 기대를 하고 있음.

The recent brisk rebound in equity markets won’t last as the macroeconomic data continue to deteriorate and earnings forecasts are being slashed, strategists at Goldman Sachs Group Inc. and Sanford C. Bernstein warn. “Without clear signs of a positive shift in macro momentum, temporary re-risking could actually increase risks of another leg lower in the market rather than signal the end of the bear market,” Goldman strategists led by Cecilia Mariotti wrote in a note dated Aug. 4. With investors once again flocking to equities in recent weeks, Goldman strategists said market positioning has improved from a very bearish level seen in June, and the swing in asset allocation could fuel the rally in the short term. But ultimately, strategists said they’re “not convinced that we are past the ‘true’ trough in positioning just yet, and we think the path from here is likely to become more dependent on macroeconomic data.” Bernstein strategists Sarah McCarthy and Mark Diver said in a note on Thursday that the earnings downgrade cycle is just starting along with outflows from stock funds. While investors have stopped buying equities in the second quarter, funds haven’t yet seen a reversal of the “huge” inflows of $200 billion seen in the first quarter, they said. “We expect another leg down in the market in the short run,” Bernstein strategists wrote.

함의: 곰 두 마리.

BOE Raises Rates by Most Since 1995, Warns of Long Recession. The Bank of England unleashed its biggest interest-rate hike in 27 years as it warned the UK is heading for more than a year of recession under the weight of soaring inflation. The half-point increase to 1.75% was backed by eight of the bank’s nine policy makers, who also kept up a pledge to act forcefully again in the future if needed, potentially putting similar hikes on the table for coming meetings.

함의: 영국 중앙은행은 9명 중 8명 동의로 27년만의 50bp 인상을 함.

BlackRock Inc. is partnering with Coinbase Global Inc. to make it easier for institutional investors to manage and trade Bitcoin, marking a major push into cryptocurrencies for the world’s largest asset manager. Top clients will be able to use BlackRock’s Aladdin investment-management system to oversee their exposure to Bitcoin along with other portfolio assets such as stocks and bonds, and to facilitate financing and trading on Coinbase’s exchange, according to a statement Thursday. The focus of the partnership with Coinbase, the biggest US crypto-trading platform, “will initially be on Bitcoin,” BlackRock said. The move underscores how Wall Street’s traditional financial players are expanding deeper into crypto and related technologies, even after this year’s meltdown in such assets. Bitcoin has lost about half of its value in 2022, while the collapse of the Terra ecosystem and Three Arrows Capital have raised questions about the resilience of the market and prompted increased regulatory scrutiny.

함의: 블랙락은 암호화폐 가격 붕괴 및 각종 논란의 사태에도 불구 전통자산에서 암호화폐로 고객의 포트폴리오를 다각화하기 위해 코인베이스와 협력관계를 맺음.

Since around the mid-2000s, the ETF landscape has become increasingly treacherous. It started with funds that — like the new single-stock ETFs — bet against broad indexes or use borrowed money as leverage to juice their daily returns. Then came volatility funds, structured funds and ever more concentrated baskets of the most speculative stocks. These newer funds flipped the odds — the longer people dabble in them, the worse off they’re likely to be, at least relative to buying the broad market.

함의: 새로운 상장지수펀드(ETF)는 과거와 다르게 보유기간 증가와 비례해 위험해지고 갉아먹히는 구조로 만들어짐.

"Some books are so familiar that reading them is like being home again."

- Louisa May Alcott

China likely fired missiles over Taiwan during military drills on Thursday, Japan said, part of Beijing’s biggest cross-strait exercises in decades after US House Speaker Nancy Pelosi visited the self-ruled island. The Ministry of Defense in Tokyo estimated that five ballistic missiles landed in Japan’s exclusive economic zone, and four of those probably flew over Taiwan. If confirmed, it would mark a major escalation as it would be the first time China has flown missiles over Taiwan itself. Officials in Taiwan haven’t commented on the specific flight path of the projectiles. The People’s Liberation Army in China fired 11 Dongfeng ballistic missiles into waters north, east and south of Taiwan between 1:56 p.m. and 4 p.m. local time Thursday, the island’s Defense Ministry said in a statement. Sun Li-fang, a ministry spokesman, earlier said missiles had been fired from land, without providing more details.

함의: 중국이 대규모 군사훈련을 실시하고 있는 가운데 지상에서 발사된 것으로 추정되는 탄도 미사일이 대만 상공을 지난 것으로 보이며, 이는 지금까지 없었던 일로 중대한 사항임.

World chip sales growth has decelerated for six straight months -- yet another sign the global economy is straining under the weight of rising interest rates and mounting geopolitical risks. Semiconductor sales rose 13.3% in June from a year earlier, down from 18% in May, data from the global peak industry body showed. The current slowdown is the longest since the US-China trade war in 2018. The three-month moving average in chip sales has correlated with the global economy’s performance in recent decades. The latest weakness comes as concern about a worldwide recession has prompted chipmakers like Samsung Electronics Co. to consider winding back investment plans.

함의: 삼성전자가 투자계획을 재검토하는 것, 반도체 판매 6개월 연속 감소에서 알 수 있는 경기둔화의 그림자.

For a while, it was a popular narrative: Chinese stocks would outperform those in the US and other advanced economies. The thesis was simple. China needs to ease financial conditions, via a stronger equity market and weaker currency, to engineer an economic recovery, whereas the US and Europe are doing the opposite to cool inflation at the risk of a recession. It was a great trade in June following Shanghai’s reopening from lockdown, but since then it has given up all the profit. That shows that China’s efforts to reflate the economy are facing considerable constraints. 

함의: 한 동안 유행했던 중국이 경제봉쇄를 해제하고 경기를 부양하는 반면, 미국과 유럽은 인플레이션 통제를 위한 정책으로 인해 중국이 초과수익을 줄 것이란 트레이드는 6월 수익을 모두 반납하며 중국 또한 경제부양의 어려움에 봉착했음을 시사함.

Elon Musk, chief executive officer of Tesla Inc. and the world’s richest person, said he sees signs that the global economy has gone “past peak inflation.” Speaking at the electric-vehicle maker’s annual shareholder meeting, Musk said the company’s commodity and component costs are trending downward over the next six months. He also reiterated prior comments that he expects a mild recession to hit that could last 18 months. “The trend is down, which suggests we are past peak inflation,” Musk said at Tesla’s Austin headquarters and factory. “I think inflation is going to drop rapidly” at some point in the future, he said.

함의: 주주총회에서 원자재나 부품 투입가가 향후 6개월 간 계속 낮아질 것으로 보이며 인플레이션이 정점을 지났다고 판단한다 발언, 다만 18개월 정도 지속되는 완만한 침체를 겪을 수 있다는 주장은 반복함.

The KRW typically moves against the USD and JPY in the same direction. However, more recently (since 2020), KRW has appreciated ~15% vs. JPY and depreciated ~20% vs. USD. Investors wonder if this could erode Korea’s export competitiveness given export similarities with Japan. This association may explain why KRW is the second-worst performing currency vs. USD in Asia YTD after JPY. It may also explain why MSCI Korea has underperformed AxJ even as MSCI Japan outperforms the latter in USD terms. The depreciation vs. USD has also led to market anxiety about whether BoK needs to keep pace with the Fed, to slow the economy and arrest KRW depreciation, or risk more severe ramifications from KRW weakness owing to import-led inflation and external debt. Indeed, the rates market expects BoK to hike in tandem to a terminal policy rate of ~3.4%, similar to what Fed futures are pricing in. We believe the macro implications from currency developments are less negative than markets fear. The bigger risk for Korea remains global demand uncertainty, in our view.

보고서: 일반적으로 원화는 달러와 엔화에 대해 유사한 방향으로 절상/절하를 보이지만 최근 다른 방향으로의 움직임이 발생, 일본과 유사한 수출 구조를 가진 한국의 경쟁력 우려를 일으켰음. 뿐만 아니라 계속적인 달러 통화 절하에 따라 한국은행이 미국 중앙은행에 맞춰 금리를 올려야 하는지(실제 최종 금리는 3.4%로 미국과 유사하게 책정 된 상태) 등의 우려를 낳고 있는데, 한국이 진정으로 걱정해야 하는 것은 환율이 아니라 세계 수요의 불확실성임. (Morgan Stanley - A Divergent KRW: Why It's Less Bad Than Feared)