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)

Looking at the past five incidents when annual US inflation topped out at 5% or more, each one saw a fairly swift decline afterwards, especially the only two episodes when the peak was above June 2022’s 9.1% reading -- back in in the 1970s and 1980s. If economists are right that June 2022 marks the high in this cycle, then their forecasts for a deceleration to 2.7% by the end of 2023 would require that inflation cools by about 40bps a month. That’s a bit faster than the 30bps seen for the 1970s and 1980s occurrences, but it’s in the same ballpark. And if the trough is a bit higher or takes a bit longer then you would get a perfect match. The sting in the tail is that all five of the episodes covered included a recession as inflation dropped back down. That also underscores the bond market’s stubborn insistence that a hard landing is the more likely outcome.

함의: 만일 물가가 정점을 지났고 인플레이션 스왑이나 물가기대(BEI)에서 책정하는 2023년 연말 2.3%의 물가를 보려면 월간 40bp씩 물가가 하락해야하고 이는 과거 정점 이후 30bp씩 하락한 경로폭 부근임. 다만, 채권시장이 경착륙을 반영하는 이유는 과거 인플레이션 정점 이후 경기침체가 뒤따라왔기 때문임.

A global equity index is set for a third weekly advance and near a two-month peak in a recovery from bear-market lows, helped by resilient US company profits. The durability of the bounce remains in doubt as borrowing costs go up. “It’s a little too early to say the risk is off the table,” Carol Schleif, deputy chief investment officer at BMO Family Office, said on Bloomberg Television. “Significant slowing” is starting to come in parts of the US economy, she said. US payrolls Friday are the next key data point for markets. Hiring likely softened in July but the labor market remains consistent with an expanding rather than recessionary economy and the Fed will press on with rate hikes, according to Anna Wong, chief U.S. economist for Bloomberg Economics.

함의: 주식시장은 여전한 불안요소를 품은 가운데 약세장의 끝자락에서 3주간 연속 상승하며 2개월래 최고치에 근접함.

Bitcoin is higher on Friday and traders with long exposure will be hoping the change in nonfarm payrolls prints below the 250,000 estimate. For the past six US employment reports Bitcoin has responded to downside miss with a gain and an upside beat with a decline, in the 30 minutes after the data release. Last year the cryptocurrency responses were inconsistent to US payrolls, which may reflect that Bitcoin has become more in tune with the general risk on/off mood of assets in 2022.

함의: 현재 상승 중인 비트코인 보유자들은 오늘 고용지표가 시장 예상치를 하회하길 바라고 있는 것으로 보이는데, 지난 6번의 고용지표 발표 후 30분간 예상치 하회 시 상승, 예상치 상회 시 하락하는 반응을 보이며 작년과 달리 위험선호/회피를 대표하고 있기 때문임.

BofA Says Take Profit on ‘Bear Rally’ as Stock Outflows Resume. Investors have resumed shunning global stocks in favor of bonds, according to Bank of America Corp. strategists, who say the time is right to step back from US equities after the strong rally in July. Global equity funds had outflows of $2.6 billion in the week through Aug. 3, according to a note from the bank, after last week seeing their first additions in six weeks. US stocks had redemptions of $1.1 billion, and while $4.1 billion left cash, global bonds had additions of about $12 billion, the most since November, BofA said, citing EPFR Global data. Strategist Michael Hartnett, who has said the recent rebound in stocks was more a bear market rally than a sustained run higher, reiterated that investors should “fade” the S&P 500 Index from a level of 4,200 points -- just 1.2% above its latest close. He maintains that the bottom for the benchmark is below 3,600, or 13% below current levels.

함의: 장 끝났는데...???

In a market downturn, it’s challenging to find anywhere to invest. But beginning last year, one vehicle may be worth considering: active quantitative equity funds. Since the pandemic, systemic active funds have outperformed their benchmarks after three dismal years of performance from 2018 to 2020. Joseph Mezrich, head of quantitative strategy at Nomura Securities International, and his colleagues, Lai Wei and Thelonious Jensen, credit the success of equity quant funds over the last two years largely to the upward trend of long-term interest rates. It’s a pattern. Since 2010, they found that equity quant funds have performed well when rates have risen and poorly when rates have dropped. The persistent low rates of that era were a problem for them — and rising rates, if they persist, will be just what they need. In 2021, almost 67% of quant funds outperformed and in the first half of 2022, 60% outperformed on asset-weighted basis — and these figures are after fees have been taken into account.

함의: 최근 액티브 퀀트 펀드들의 성과가 우수한데 작년의 경우 이 유형의 펀드 67%, 올해 60% 수수료 차감 기준 초과수익을 달성했음. 이들 펀드의 특징은 금리하락기에 부진하고 금리상승기에 성과를 낸다는 것임.

This is a phenomenally strong jobs report, way stronger than forecast and more than the average payrolls expansion for the year through June. This will increase chatter for a 75-bp move from the Fed, and the reaction should be along those lines.

함의: 9월 중앙은행의 75bp 금리인상에 가까워지는 강력한 고용 보고서가 발표됨.

Former Fed Governor Randall Kroszner says on Bloomberg TV: “Certainly 75 basis points will be on the table for the next meeting.”