Thread by @Trinhnomics

Good morning☘️! Hope springs eternal - markets are excited by the partial deal & maybe a longer trip in the US (meaning more talks, more chance of some sort of de-escalation). Markets also excited by Borish & Leo Varadkar (Irish PM) regarding "pathway to possible deal"

In Asia..

In Asia, the move is obvious welcomed most by AUD, CNH et al as the news of trade-war "partial deal" at the very least on the margin takes off 1 uncertainty, among many others. Notice that JPY weakened (safe haven). USD too weakened (safe haven).

US data wise, CPI flat @ 1.7%YoY

So both hope of trade-war "partial deal" & Brexit orderly thanks to some kind of "pathway" & also soft CPI & slowing PPI pave ways for help from JPO et al in terms of rates.

Asian data is light today w/ markets waiting for Malaysian budget 🇲🇾 to see whether there's help & impact

Asian data is light today w/ Malaysia IP (and obvs budget!!!) & Singapore retail sales, India IP, & maybe Chinese monetary data (date not specified & in a range).

Why do people care about Malaysian budget? B/c on the fixed income side, has the highest foreign share in Asia 👈🏻

Some expectations of the Malaysian budget - seems like a lot of expectations of broadening the SST base (GST was abolished after a quick stint to offset lower oil revenue & hence lower CPI in 2018 & early 2019).

theedgemarkets.com/article/cover-…

straitstimes.com/asia/se-asia/m…

A primer on Malaysian fiscal & why the move last year to get rid of GST didn't blow up the fiscal deficit (as expected by @Trinhnomics ) 👇🏻👇🏻👇🏻

https://twitter.com/Trinhnomics/status/994742987375525888?s=20

We argued that the fiscal deficit will not blow up even with the removal of GST as it was replaced by SST, which was more of the status quo than GST as GST was just introduced recently to cover short-fall of oil.

Deficit likely -3.4% of GDP in 2019 👈🏻@natixis @NatixisResearch