Antipodean Capital Macro Strategy Daily Nov 28 - A rolling bear market is cascading through the commodity sector due to the global data cycle peaking and slowing. Sell miners, AUD & CAD on rallies, Copper, and be long NZ curve flatteners.

Macro: Commodity price contagion is now spreading from not just base metals but also to Oil, Iron ore, and Coal: Global data cycles have peaked, and are now retreating apace, even in the US which has been the strongest of all major blocs. To date, the global data cycle peak was most evident in falling base metals prices, and a continued decline in global mining shares of around 25-30% so far. However the US data cycle peak in September and geopolitical issues are now playing out in Oil markets, which are down 35%. The contagion is spreading to Coal and Iron ore markets, which are falling sharply now due to slowing steel mill profitability in China as global trade gets dislocated via slowing data, and US tariffs. The implications are clear here. All major commodity markets are now falling. This suggests global mining shares have peaked and have further hefty falls to come yet. Commodity FX rates are now vulnerable, but we sense are only being sustained due to potential USD weakness and pre-existing short positions which are being washed out now. We will look to short all major commodity FX rates when we can. Also, importantly, slowing commodity prices imply slowing commodity economy growth, reduced investment in those economies, and possibly falling interest rates. This is very bullish for long term AU, NZ and CAD bond yields.

Summary: US stock markets started the post-Thanksgiving period with a rebound, with no real news or data to frustrate the rally. Trump/Xi trade talks scheduled for this week may or may not be positive. Seasonals are strong for the next 4-5 weeks. However we see this as a counter trend rally. Oil prices rebounded and the USD remained well bid, and US yields ratcheted up in alignment with higher stocks.

New trades: Sell miners replace with long S&P, short Homebuilders at 3.49x, risk 3.35x target 3.8x. Sell Copper at 2.71 risk 2.80 target 2.40. Short NZDEUR at .5970 close at .6017 (-0.6%).
FX: Short EURSTG at .9010 risk .9150 target .84. Long AUDNZD 1.0750 tgt 1.12 risk 1.05. Long GBP 1.2770 risk 1.27 target 1.33. Sell $JPY at 112.80 risk 114.20 tgt 110.
BONDS: Long 2 units ASX Banks 5yr CDS at 54bps, target 140. Long NZ 10s sell NZ 2s at 104bps risk 130bps target 50bps. Sold Portugal 10yr bought German Bund at 158bps, risk 110bps target 350bps. Long US 2-10 curve flatteners at 26bps/35bps risk 40bps target 10bps.
EQUITIES: Long ASX All Ordinaries Top 100, Short ASX Small Ordinaries at 0.81x ratio. Short Homebuilders Long Kospi at 2.72x risk 2.6x target 2.95x.
COMMODITIES. Long Silver short Gold at 83.9x risk 87 target 65. Long Silver at 14.08 risk 13.85 target 14.80+