An Asian equity gauge fell amid declines in Hong Kong and China. Japan was the one bright spot, buoyed by the prospect of administrative stability after the ruling coalition expanded its majority in an upper house election. A dollar gauge was back around the highest level since 2020. The yen was the weakest performer in the Group-of-10 basket. Commodity-linked currencies were also under pressure. Raw materials including oil were on the back foot.

함의: 위험회피심리로 달러 지수 고점에 재차 도달함.

The dollar rallies against all G-10 majors as inflation anxiety keeps Treasuries subdued and as Chinese equity selloff weighs on Asia’s risk sentiment. Yen weakens to a fresh 24-year low above 137/USD.

함의: Cocktail of Risks Boosts Dollar.

The risk of a euro-area recession is growing as the likelihood of natural gas shortages rises and inflation remains at record levels, according to economists polled by Bloomberg. The probability of an economic contraction has increased to 45% from 30% in the previous survey and 20% before Russia invaded Ukraine. Germany, one of the most-vulnerable members of the currency bloc to cutbacks in Russian energy flows, is more likely than not to see economic output shrink. 

함의: 설문에 따르면 유로존의 경기침체 확률이 러시아의 우크라이나 침공 전 20%, 6월 30%에서 7월 45%로 높아졌음(독일의 경우 6월 30%, 7월 55%).

Daily exports was supported by a pick-up in Vietnam (32.0%Y), Singapore (71.1%Y) and Malaysia (95.2%Y), and sustained strength in US (21.3%Y), offsetting softer momentum in EU (-7.0%Y) and China (4.1%Y). By product, petro products (124.8%Y), ships (61.9%Y), and autos (21.2%Y) were bright spots.

보고서: 한국의 7월 열흘간 수출 데이터는 화학, 조선, 자동차 부문에서 특히 긍정적이었음. (Morgan Stanley - Data NOW: July First 10 Days Daily Exports Accelerated)

China’s Wuhan University reported a case of cholera, spurring a rush to trace contacts and stem potential further spread. The district’s health department said it has collected samples, undertaken contact tracing and closed some venues for disinfection after the student was found to have the disease. No further cases have been detected so far, it said. Cholera --  a virulent disease that’s spread through contaminated food and water and causes acute diarrhea -- is relatively rare in China, with one case found in March and five detected last year. But its possible emergence in Wuhan, the original epicenter of Covid-19, comes as China’s health system faces unprecedented scrutiny as coronavirus infections flare across the country despite a harsh zero-tolerance approach designed to stamp out the virus.

함의: 역병의 연속.

One of Wall Street’s most vocal bears is growling again, this time because of dollar strength. The “extreme” rally in the greenback over the past year typically comes alongside market stress or recession, or both, Michael J. Wilson, chief US equity strategist at Morgan Stanley, wrote in a report Sunday, noting how the Fed will want a meaningful economic slowdown and “a stronger dollar is part of that mix.” As such, the surge will be a “massive headwind” for profits at many large US firms and another reason to expect a dimming earnings outlook, he wrote, adding “the recent rally in stocks is likely to fizzle out.”

함의: As i told you.

There has been a notable willingness to re-embrace risk assets so far this month, but still signs of traders willing to bet against them. Net-short non-commercial S&P 500 futures positions increased for a third straight week and have hit their largest since June 2020, according to the latest CFTC data. The bearish bets have grown despite -- or possibly because of -- the US stock benchmark climbing over 6% from its mid-June low.

함의: 지수가 저점 대비 +6% 상승하는 과정에도 비상업적 선물 순매도 포지션은 2020년 6월 대비 최고치를 기록함.

US stocks are likely to rally in the second half of the year as corporate earnings remain resilient to surging inflation and slowing economic growth, according to Citigroup Inc. strategists. “Current risk-off positioning and second-half earnings resilience set up for a mean reversion trade higher into year end,” Citi strategists led by Scott T Chronert wrote in a note on Friday. They expect the S&P 500 to finish this year at 4,200 -- about 7.7% higher from the latest close and a 12% drop for the full year. 

함의: 이번 분기 발표 될 훌륭한 기업 이익이 지수를 더 높은 수준으로 끌어올릴 것이라 주장함.

European regulators are urging second booster doses of Covid-19 vaccines for people over 60 years old as cases and hospitalizations are again rising sharply. Recommendations from the European Centre for Disease Prevention and Control and the European Medicines Agency also include people with medical conditions that put them at high risk of severe disease, both agencies said in a statement on Monday. Weekly cases rates among people age 65 and over increased 32% in 22 of the 24 reporting countries in the week ending July 3 compared to the previous week, according to an ECDC statement.

함의: 유럽 내 고령자와 취약자에서 바이러스 중증환자가 증가함에 따라 백신 추가 접종을 권고하는 성명을 발표함.

Germany is ready to make a decision on a bailout for Uniper SE “soon” but ongoing talks with the company are “difficult.”
Uniper - which is heavily dependent on Russian gas - asked the German government for a bailout on Friday, the first major corporate casualty of Moscow’s squeeze on European energy flows. The government is prepared to help the company no matter what, said a spokeswoman for government. Germany and Uniper have been locked in talks for weeks over a potential rescue package. The company may need about 9 billion euros ($9.1 billion), more than twice its market value, as it bleeds cash trying to replace Russian gas supply with higher-priced alternatives. 

함의: 러시아 가스에 의존도가 높은 독일 기업 중 첫 피해 사례가 발생함.

China’s credit jumped much more than expected last month to the highest on record for June due to a strong rebound in bank lending and record government bond sales. Aggregate financing, a broad measure of credit, reached 5.2 trillion yuan ($775 billion), the People’s Bank of China said Monday. That was the highest for any June in comparable data back to 2017 and beat the consensus estimate of 4.2 trillion yuan. Financial institutions made 2.8 trillion yuan of new loans in the month, also better than economists’ projection. The end of the lockdown of Shanghai in June may have contributed to the increase in borrowing demand. The data indicates that stimulus from the central bank and government is starting to have an effect on boosting the supply of credit to the economy.

함의: 중국 정부의 경기부양 노력이 신용 공급 증가로 가시화되고 있음.

BlackRock Warns Against Dip Buying as High-Volatility Era Dawns. There’s no quick recovery in sight for stocks and bonds that are having their worst year in at least three decades, according to strategists at BlackRock Inc. Russia’s grinding war in Ukraine and supply bottlenecks from labor shortages will keep the pace of price growth elevated. Central banks will tighten policy until the economic pain forces them to shift direction and live with inflation. Constrained by the “hyper-politicization of everything,” policy makers will struggle to tackle the fallout.

함의: 블랙락은 30년래 최악의 시기를 보내고 있는 주식과 채권의 성과가 단기에 회복할 것이란 기대로 섣부른 매수를 하는게 위험하다고 경고함.

When Wall Street analysts were as bullish on stocks as they are now, while investors were bearish, history shows it’s the prognosticators that are usually right. The gap between analysts’ 12-month target and current prices for US major averages have widened this year as gloomy investors sent stocks plunging while strategists stood by their optimistic views. Monthly data doing back to 2004 identified four previous instances when the S&P 500’s projected returns (the gap between strategist 12-month forecasts and spot prices) were equal or higher than the 25.5% as of Thursday’s close. The benchmark posted an average gain of 24.9% a year later, rising three our of the four times. Analysts called for an average of 28.9% gain back then.

함의: 이 정도 지수 격차에서는 애널리스트 추정에 결국 수렴함.

The US housing market saw a rise in the percentage of deals cancelled in June as rising mortgage rates made homes more expensive, pushing some buyers to walk away from deals. Across the country, nearly 60,000 home sales fell through, according to an analysis by Redfin Corp. That was equal to 15% of transactions that went into contract that month, the highest share of cancellations since April 2020, when early Covid lockdowns froze the housing market.

함의: 미국에서 주택가격 및 대출이자 상승으로 부동산 거래의 15%가 취소됐으며, 이는 2020년 4월 이후 최고치임.

Stocks dropped Monday as traders await the key second-quarter earnings season for indications on how companies are weathering the inflation storm. A dollar gauge climbed to the highest level since 2020.

The euro is again flirting with dollar parity today, and once again there is nothing on the macroeconomic side to stop it breaching that level. The slow roll of ECB tightening, coupled with the increasingly severe economic outlook for Germany, means that on a relative basis there seems to be little reason to prefer the common currency over the dollar.

함의: 달러 외 대안이 없어지며 유로는 패리티에 근접함.

Treasury volatility ain't going away, analysts say. Not with CPI pending. The ICE BofA MOVE index is just shy of its March 2020 peak and shorter-term measures based on options on rate swaps have already exceeded those levels. Big intraday yield moves are occurring with alarming frequency. In the past month, the 10-year yield's daily range topped 15 bps 10 times, three of those in July.

함의: 채권 변동성이 지속 확대되며 10년물 채권 금리가 일 중에도 15bps 움직이는 일이 빈번, 변동성이 낮아질 기미가 보이지 않음.

Think risk factors instead of asset classes, Mohamed El-Erian writes. A risk-factor approach is particularly helpful in understanding the impact of economics and policy on markets this year. The path forward for markets will depend on the Fed, the strength of the labor market and inflation.

함의: 올해 시장 대응은 자산군보다 중앙은행, 노동시장, 물가로 구분되는 위험요소를 중심으로 한 접근이 더 효율적임.

The founders of bankrupt crypto hedge fund Three Arrows Capital haven’t been cooperating in the firm’s liquidation process and their whereabouts were unknown as of Friday, according to court papers. Representatives tapped to liquidate Three Arrows by a British Virgin Islands judge had “not yet received any meaningful cooperation” from Kyle Davies and Zhu Su, lawyers said in US bankruptcy court filings. Advisory firm Teneo is attempting to round up and preserve the assets of the hedge fund. 

함의: 가상화폐의 그들은 '가상' 속으로 사라짐.

Long-held economic theory says that just the expectation that inflation will accelerate will cause actual inflation to accelerate. The thinking here is that if consumers expect prices for goods and services to rapidly increase in the near future, they will buy earlier, faster and in bulk, which causes those prices to rise faster than they would otherwise. Makes sense, but can the same be said about a recession? Sure, and it may be happening now and in real time. If people fear that the economy is about to take a turn for the worse, they will reduce spending, trade down to cheaper brands, postpone consumption and economize in general. The net effect if enough people take such action would be a recession.

함의: 경기침체의 실제 여부를 떠나, 가계 주체들이 그렇게 체감하면 경기침체에 맞는 행태를 보이게 됨.

Chinese stocks plunged in the US as investors digested news about Covid and fines levied on tech giants. The Nasdaq Golden Dragon China Index fell 7.1%, the biggest one-day drop since May.

함의: 미국 대비 견조했던 중국 주식도 악재를 더 반영하기 시작함.