Two of the Federal Reserve’s most hawkish policy makers backed raising interest rates another 75 basis points this month to curb inflation, while playing down fears the US economy was headed for recession. Governor Christopher Waller and James Bullard, president of the St. Louis Fed, both stressed the need to get policy into restrictive territory to confront the hottest price pressures in 40 years, even if this meant slowing growth. Both are voting members of the Federal Open Market Committee this year.

함의: 매파적 성향의 연준 인사 둘은 희생을 감수하더라도 75bp 금리인상을 통해 물가 통제를 우선해야 한다고 주장함.

A quarter-trillion dollar pile of distressed debt is threatening to drag the developing world into a historic cascade of defaults. Sri Lanka was the first nation to stop paying its foreign bondholders this year, burdened by unwieldy food and fuel costs that stoked protests and political chaos. Russia followed in June after getting caught in a web of sanctions. Now, focus is turning to El Salvador, Ghana, Egypt, Tunisia and Pakistan — nations that Bloomberg Economics sees as vulnerable to default. As the cost to insure emerging-market debt from non-payment surges to the highest since Russia invaded Ukraine, concern is also coming from the likes of World Bank Chief Economist Carmen Reinhart and long-term emerging market debt specialists such as former Elliott Management portfolio manager Jay Newman.

함의: 개발도상국의 채무불이행에 따른 도산 위험이 높아지고 있음.

Early Asia trading will be focused on the Bloomberg scoop that China is mulling bringing forward $220 billion of bond sales to accelerate its infrastructure push. Overall, my takeaway is that investors are correct to take it positively, particularly for EM assets, as the message is good. Especially as stocks seem ripe for a bit of a bear-market rally. Just don’t think this is a major macro turning point. It will soon be forgotten again, amid the twin scourges of elevated inflation and slowing growth.

함의: 본질적 문제라 할 수 있는 높은 물가와 낮은 성장이 미해결이란 것을 잊지 않아야 함.

Realized and implied volatility in US bonds has soared, but the pattern here is making it look like 3% is now the golden mean when it comes to the benchmark 10-year Treasury yield. ICE’s MOVE index of expected price swings, often referred to as the fear gauge for bonds, has jumped around the periods when the yield topped that round number, and the index also bottomed out in late May when the yield got a substantial way below 3%. Chances are volatility will keep grinding higher until it becomes apparent whether 3% is a ceiling or a floor for yields over the longer term.

함의: 채권 변동성 지수를 통해 투자자들의 심리를 유추해보면, 미국 국채 10년물 금리 3% 수준이 최적의 평균으로 보임.

Commodities remain the best macro hedge. Although we expect spot prices to remain vulnerable to spec length liquidations triggered by negative economic news flow, we believe it is premature for commodities to succumb to recession concerns when the global economy is still growing and markets remain in deficit on strong demand. Thus, we view this price pullback as a longer-term buying opportunity. Barr a large synchronous negative global demand shock that creates a level-shift down in demand, we believe demand rationing will remain the dominant theme for energy and food commodities while an accelerated stimulus program in China should help to create a turnaround in base metals pricing in Q3. Thus, we believe the correlation between commodities and other risky assets is set to decline again given that commodities are spot assets while risky assets discount future expectations that have turned more negative. It is important to remember that, with the exception of the GFC, commodities have been a great macro hedge, with all sectors delivering positive returns during large drawdowns in 60/40 portfolios since 1990.

보고서: 경기침체 공포 속에 모든 자산군이 하락하며 원자재도 예외가 아니었으나, 여전히 거시경제 역풍을 방어하는데 원자재는 최적의 수단임. (Goldman Sachs - Commodities oversold on recession fears)

Yen spiked in an initial risk-off reaction to reports that former prime minister Shinzo Abe was shot, says Akira Moroga, manager of currency products at Aozora Bank in Tokyo.

Bloomberg reported that Beijing may front-load use of Rmb1.5trn (US$220bn) local govt. special bond (LGSB) quota from 2023 to 2H22. Reuters also reported on July 5 that a Rmb500bn infrastructure fund could be set up in 3Q. If materialized, these coupled with policy banks' Rmb300bn financial bonds and Rmb800bn credit could help sustain infrastructure capex momentum beyond August, when MoF requires all the Rmb4.8trn LGSB proceeds to be deployed into projects. In turn, the fiscal and quasi-fiscal boost to infrastructure would reach >Rmb7trn this year, 3x last year's Rmb2.4trn, outweighing slower land revenues and continued scrutiny over local hidden debt and lifting full-year infra. FAI growth to 9-10% (vs. 8.2% YTD and 1.8% p.a. in 2020-21). Separately, echoing a strong pro-growth mindset, China further eased intercity travel restrictions despite the recent flare up in Ba.5 variant, halving travel history tracing to 7 days. These combined support a gradual growth recovery in 2H (3.7% YoY vs. 0.5% in 2Q).

보고서: 중국의 성장률은 부양은 늘리고 규제는 줄이면서 회복할 것임. (Morgan Stanley - More Stimulus, Less Restrictions)

President Joe Biden will discuss possible reductions in US tariffs on Chinese goods in a meeting with his advisers set for Friday, according to people familiar with the matter, as his administration nears a closely-watched decision on trade with China. The White House meeting is the latest in a series Biden has held on the issue, and it’s not clear if he intends to decide on a path forward, according to the people, who spoke on the condition of anonymity because the president has yet to reach a decision. 

함의: Will, will, will...

Some of South Korea’s legion of retail investors, who’ve been eager buyers of volatile assets like cryptocurrencies and Tesla Inc., may be getting cold feet. An early sign of that can be seen in their still small but growing purchases of one of the more conventional and usually less risky asset classes: debt securities. At the same time those investors are buying shares at a much slower pace. At Samsung Securities Co., one of Korea’s biggest brokerages, retail investors bought 2.8 trillion won ($2.2 billion) of local bonds in the first half of 2022, an increase of 60% from a year earlier. Retail traders’ bond trading accounts are increasing at brokerages including NH Investment & Securities Co., and investors are buying high-grade debt such as Korea Electric Power Corp. notes.

함의: 한국 개인 투자자들의 위험자산 회피심리가 높아지고 있음.

Investors making bullish calls on Chinese equities have just found another reason to love them: these stocks have zero performance correlation with their US peers. The 52-week correlation between the S&P 500 Index and the CSI 300 Index has fallen to around zero for the first time in four years. That’s largely a function of the policy divergence between the two countries -- with US now trying to put a brake on the economy to stamp out inflation and China shifting its policy focus to bolstering growth from tightening the screw on tech giants and property speculation.

함의: 미국과 중국의 상반 된 핵심정책으로 두 국가의 주가지수 상관관계가 4년만에 '0'으로 무관한 영역에 수렴함.

Former Prime Minister Shinzo Abe -- Japan’s longest-serving premier and a figure of enduring influence -- was in grave condition after he was shot during a campaign event Friday, an attack that shocked a nation where political violence and guns are rare.

Taiwan Semiconductor Manufacturing Co. reported better-than-expected quarterly revenue, providing another signal that electronics demand is holding up better than feared. The world’s largest contract chipmaker booked NT$534.1 billion ($17.9 billion) of revenue for the second quarter, according to Bloomberg’s calculations, compared with the average analysts’ estimate of NT$519 billion. The results from Apple Inc.’s most important chipmaker may allay investors’ worst fears about the impact of weakening demand and soaring costs on the $550 billion semiconductor industry. On Thursday, Samsung Electronics Co. also reported a better-than-anticipated 21% jump in revenue, triggering an Asian stock rally.

함의: 애플의 메인 제조업체가 수요 둔화와 투입 비용 증가에 대한 투자자 우려를 실적으로 잠식시킴.

Today’s unexpectedly strong jobs numbers may have bought a temporary reprieve, but the recession drum-beat is getting louder, with the Wells Fargo Investment Institute going as far to say the US is already in one. That’s likely premature, but the slowing of growth and the nature of recessions means this could change very fast. After the stimulus-charged demand surge in the wake of the pandemic, US growth is now fading rapidly. Rising rates are coursing through the economy, causing slowdowns in housing, auto sales, demand for lending, and leading to collapses in business and consumer confidence.

함의: 고용 데이터 서프라이즈만으로 침체 우려가 덮어진다 볼 수 없음.

Labor-market data has shown early signs of softening, but investors are mixed on the report. Bloomberg economists are factoring in the possibility that slightly softer data will prompt the central bank to go back to 50 basis point moves, even after the report showed job gains topped analyst estimates. Others see the recent data as a signal that fears of recession are overblown and say that the downshift may be too modest to shake the Fed from its path. “The reaction feels a bit knee-jerk to me,” said Max Gokhman, chief investment officer for AlphaTrAI. “The market’s muscle memory tells it that a strong labor market means more hikes means sell stocks. But to ‘price’ this trend requires doing more than looking at the headline.”

함의: 같은 헤드라인을 보고도 해석은 엇갈림.

It isn’t the first time billionaire Tesla Inc. founder Elon Musk burned his investment bankers on deals and it may not be the last. When Musk dropped a regulatory filing late Friday saying he was walking away from his $44 billion agreement to buy Twitter Inc., some of the bankers who were backing him felt a mixture of disappointment and relief even with millions of dollars in fees at risk, according to people familiar with the matter. “He did burn bankers for tons of time,” said Susan Wolford, a former investment banker who was vice chair and ran the tech group at Bank of Montreal. “You have to take this to committee, you have to do all the work for something that large.”

함의: 그는 늘 거래가 아닌 노이즈를 만드는 편임.

China can consider increasing its budget deficit to provide more support for small businesses battered by Covid outbreaks and weak consumption, a former finance minister suggested on Saturday. “The budget fiscal deficit of central and local governments can be increased when necessary,” Lou Jiwei, who served as finance minister from 2013 to 2016, told the Caixin Summer Summit in Beijing. The aid to small firms “is still insufficient due to a severe slump in fiscal income across local governments,” he said. The central government could boost transfer payments to regional authorities to help them support individual merchants and small and micro businesses, Lou said. Local governments meanwhile could invest more on public projects, he added.

함의: 중국 중앙정부 및 지방정부 재정적자를 확대하면서 중소기업을 지원할 수 있다고 함.

The bounce is back in equities. Could they have fallen enough to account for what comes next in the economy? While the consensus of the pundit class is no, investors are again showing signs of seeing it otherwise. Deluded as they have repeatedly proved, hopes that the worst is over are resurfacing. The S&P 500 just shook off rising bond yields and climbed for the week, at one point stringing together the longest streak of gains since March. Notably, bulls are flexing on the eve of a period when companies will give details on the topic dearest to investor hearts: the state of earnings.

함의: 주가가 최악의 상황을 모두 반영했다는데 확신할 수 없으나, 실적 발표를 앞두고 3월 이후 가장 긴 기간 상승세를 보였단 점에 주목할 필요가 있음.

Macau will shut almost all business premises including casinos for a week from Monday as a Covid-19 outbreak in the gambling hub showed few signs of abating, Macao Daily reported.
Essential business operations including supermarkets and pharmacies will remain open, the report cited the city’s officials as saying at a press briefing Saturday. 

Sustained US job growth and an unemployment rate near a 50-year low bolstered bets that the Federal Reserve will proceed with another big interest-rate hike this month to rein in demand and tamp down inflation. Jumbo hikes were the theme of the week in other countries as well, like Hungary and Pakistan, as policy makers work to extinguish price pressures.

함의: 미국의 낮은 실업률은 중앙은행의 75bp 인상 확률을 높이고 있고, 여타 국가 중앙은행의 100bp 이상의 'Jumbo hikes' 흐름을 지속하게 할 것임.

Many people of a certain age can recall the first time they held a smartphone. The devices were weird and expensive and novel enough to draw a crowd at parties. Then, less than a decade later, it became unusual not to own one. That same society-altering shift is happening now with electric vehicles, according to a Bloomberg analysis of adoption rates around the world. The US is the latest country to pass what’s become a critical EV tipping point: 5% of new car sales powered only by electricity. This threshold signals the start of mass EV adoption, the period when technological preferences rapidly flip, according to the analysis. For the past six months, the US joined Europe and China — collectively the three largest car markets — in moving beyond the 5% tipping point. If the US follows the trend established by 18 countries that came before it, a quarter of new car sales could be electric by the end of 2025. That would be a year or two ahead of most major forecasts.

함의: 미국 신차 판매 중 전기차 비율이 5%를 넘었고, 이는 새로운 문물이 가파르게 점유율을 높이는 전환점, 다른 국가의 사례를 보면 2025년이면 미국 신차 중 25%가 전기차가 될 것임.

US Secretary of State Antony Blinken blasted Beijing over its support of Russia after emerging from more than five hours of talks with his Chinese counterpart Wang Yi. During a meeting on the sidelines of a Group of 20 foreign ministers meeting in Bali, Indonesia, Blinken on Saturday said he told Wang that China wasn’t neutral on the Ukraine war because there’s no such thing as being neutral when there is a clear aggressor. He cited Chinese President Xi Jinping’s recent call with Russia’s Vladimir Putin as evidence of Beijing’s ongoing support of Moscow. 

함의: 미국은 러시아에 대한 중국의 태도를 지속 비난하고 있음.