We do not see lower US rates on any incremental Fed dovishness as a threat to the dollar amid rising recession risks. USD has historically always risen in recessions even as the Fed cuts aggressively and is principally rooted in economic weakness outside the US that is largely Fed invariant, and shows few signs of abating. Business surveys are sliding in Europe, and are coupled with another sharp rise in natural gas prices. In China, the Politburo meeting disappointed hopes of big bang policy stimulus. Stay defensive.

보고서: 중앙은행의 금리인상에 대한 기대가 낮아지면서 달러의 강세가 완화될 것으로 기대하는 쪽이 있지만, 경기가 침체에 도달할 수록, 그리고 비미국 국가의 경제가 미국 대비 더 약할 때라면, 중앙은행이 금리를 인하해도 달러는 강세를 보였다는 것을 알아야 함. (J.P.Morgan - Tactics vs. strategy around the dollar)

"Roots are not in landscape or a country, or a people, they are inside you."

- Isabel Allende

Will she or won't she? Nancy Pelosi departed for Asia with no official sign that Taiwan is on her itinerary. China, which has warned of consequences including the possible use of military force if the House speaker visits the island, held live-fire drills in the Taiwan Strait on Saturday. Pelosi's office said her delegation will visit Japan, South Korea, Singapore and Malaysia, with a focus on security, economic partnership and democratic governance.

힘의: 갈 것인가, 안 갈 것인가?

For carry traders battered by the dollar’s rally and higher US borrowing costs, the euro’s worst plunge since 2005 couldn’t have come one moment sooner. Investing in emerging-market currencies with borrowed euros is raking profits of as much as 29% this year depending on the choice of the higher-yielding currency, according to data compiled by Bloomberg. The gains are being driven by the euro’s 10% drop against the dollar, which took the cross to parity for the first time in two decades. Those who funded the same carry positions with the greenback had much less lucrative results: not only the overall strategy is failing for a third successive year, but most individual emerging-market currencies are also producing losses. Even in Latin America, profits have stalled after a stellar start. Needless to say, traders are switching. “Funding carry trades by selling euro is becoming more common,” said Brendan McKenna, a currency strategist at Wells Fargo in New York. “The European Union looks more likely to fall into recession and geopolitical developments should weigh on the currency, making emerging-market carry trades funded by the euro an interesting option.”

함의: 신흥국에 투자하는 달러 캐리 트레이드가 올해 뿐 아니라 3년간 손실을 본데 반해 유로 캐리 트레이드는 유로가 패리티까지 하락하며 올해 +29% 수익을 기록, 유럽의 침체가 가시화되면서 캐리 트레이더들에게 유로화가 좋은 수단이 되고 있음.

China’s banks face mortgage losses of $350 billion in a worst-case scenario as confidence plunges in the nation’s property market and authorities struggle to contain deepening turmoil. A spiraling crisis of stalled projects has dented the confidence of hundreds of thousands of homebuyers, triggering a mortgage boycott across more than 90 cities and warnings of broader systemic risks. The big question now is not if, but how much it will batter the nation’s $56 trillion banking system. In a worst-case scenario, S&P Global Ratings estimated that 2.4 trillion yuan ($356 billion), or 6.4% of mortgages, are at risk while Deutsche Bank AG is warning that at least 7% of home loans are in danger. So far, listed banks have reported just 2.1 billion yuan in delinquent mortgages as directly affected by the boycotts. 

함의: 중국의 부동산 보이콧이 확산될 경우 현재 3.1억 달러에 불과한 모기지 관련 은행 부실이 최악의 시나리오에서는 전체 모기지론의 6.4%인 3,560억 달러에 이를 수도 있다고 경고함.

South Korea’s exports extended gains in July, suggesting the global economy remains resilient amid concerns that rapid central bank tightening could tip the world into a recession. Overseas shipments increased 9.4% from a year earlier, the trade ministry said Monday, compared with economists’ forecasts for a 10% gain. Average daily shipments, which take into account one less business day than a year earlier, rose 14.1%, the customs office said. Overall imports advanced 21.8%, resulting in the second-largest trade deficit in figures dating back to 2000, and the fifth time the economy recorded a shortfall in seven months this year.

함의: 한국 수출은 중앙은행의 긴축과 경기침체 우려에도 불구 전년대비 +9.4% 증가했으나 수입이 전년 대비 +21.8% 증가하며 4개월 연속 수지 적자를 기록함.

The Taiwan dollar slid past a key psychological level of 30 per US dollar for the first time since June 2020 amid bleak economic prospects for the island. The currency fell as much as 0.2% to 30.008 per dollar amid foreign outflows that reached $626 million this quarter. Taiwan last week lowered its unofficial economic outlook for the year amid waning global demand for electronics and rising inflation. Asia’s factories continued to report weakening activity in July amid lingering supply chain complications and a slowing global economy. Investor sentiment is also cautious amid geopolitical risks surrounding a potential visit by Nancy Pelosi to the island. Pelosi left Taiwan out of the itinerary in a statement on Sunday announcing the trip, which will also include stops in Japan, South Korea and Malaysia. Yet speculation is still rife that Pelosi would visit Taiwan at some point this week, risking a heavy-handed response from China, which regards the self-governing island as its territory.

함의: 달러 대비 대만 통화가 제조업 둔화와 공급망 이슈, 경기침체 우려 속에 심리적 지지선을 돌파했고, 미국 하원의장의 부인에도 불구 대만 방문 가능에 여전한 의심을 품으며 지정학적 갈등 위험까지 반영하고 있음.

The number of companies that have delayed or canceled financing plans has soared to at least 358 as the global economy continues to battle inflation and energy shortages. The deals, including initial public offerings, bonds, loans and acquisitions, amount to more than $254 billion. The Americas saw the highest number of transactions being postponed or shelved at 184, which was more than double the tally for other regions. The high Americas’ numbers were due to a slowdown in its equity market with 136 IPOs pulled since January, making up two-thirds of total listings shelved for the year globally. In the debt market, borrowers are still facing challenges raising funds, with 103 deals worth at least $64 billion delayed or scrapped globally since the beginning of the year. July also saw the first Schuldschein transaction being postponed due to Europe’s energy crisis.

함의: 세계경제가 인플레이션에 따른 금리인상, 에너지 부족 위기 등을 겪는 동안 358건 2,540억 달러에 달하는 기업공개, 자금조달, 인수 등이 취소되거나 연기되었음. 특히 미국의 경우 358건 중 184건이 해당하면서 가장 큰 비중을 차지함.

Germany’s presidential palace in Berlin is no longer lit at night, the city of Hanover is turning off warm water in the showers of its pools and gyms, and municipalities across the country are preparing heating havens to keep people safe from the cold. And that’s just the beginning of a crisis that will ripple across Europe. It might still be the height of summer, but Germany has little time to lose to avert an energy shortage this winter that would be unprecedented for a developed nation. Much of Europe is feeling the strain from Russia’s squeeze on natural gas deliveries, yet no other country is as exposed as the region’s biggest economy, where nearly half the homes rely on the fuel for heating.

함의: 독일은 겨울 에너지 부족에 대응하여 불필요한 에너지 사용을 줄이는 지침을 시행하기 시작함.

A worsening crisis in China’s real estate sector is dragging industry shares to the lowest in almost five months, with home sales slumping further and setbacks spreading at the nation’s most indebted developer. A Bloomberg Intelligence index of developer stocks dropped as much as 2.3% to the lowest level since March 16. Guangzhou R&F Properties Co. and Country Garden Holdings Co. led the declines, each losing at least 6%. The industry’s outlook turned darker after data showed home sales in the country extended a plunge amid a widening mortgage boycott, while China Evergrande Group failed to unveil a long-promised restructuring framework on time. Investor confidence also weakened on news of a plan mulled by authorities to seize distressed developers’ idle land to help complete stalled projects, a move that could cost creditors access to some of builders’ most valuable assets.

함의: 중국 경제에는 언제나 회색 코뿔소란 수식어가 함께했음.

With the busiest week of the second-quarter earnings season over, investors are relieved that results are holding up better than feared, according to Goldman Sachs Group Inc. strategists. Of the 56% of S&P 500 companies that have reported earnings so far, more than half have beaten analyst estimates -- above the long-term average of 47%, strategists led by David J. Kostin wrote in a note dated July 29. That, combined with “dovish messaging” from the Federal Reserve, has provided a boost to equities, they said. Still, at 52%, the rate of earnings beats is trailing the 62% average pace set in the last five quarters, Kostin said, suggesting that stocks are not out of the woods yet after posting their strongest monthly rally since November 2020. Although investors have been optimistic that corporate profits are proving resilient to the impact of scorching inflation and glum consumer sentiment, strategists are divided on the course for earnings estimates through the second half of the year -- and its impact on equities -- especially against the backdrop of a looming recession.

함의: 미국 기업 실적발표가 집중되었던 지난주 이후 집계 된 결과를 보면 투자자들 우려에 대비해 더 나은 실적을 보인 회사가 많았고, 이를 통해 인플레이션과 수요감소라는 우려스러운 환경에 기업들이 적응하고 있다는 기대를 불어넣음.