The 2024 consensus is getting very bullish on US growth, while nothing is happening outside of US shores. Meanwhile, markets see all major markets converging towards a 2-2.5% inflation range. Feasible?
Despite inflation not dropping to the extent our models had suggested, the ECB has still been dovishly surprised relative to its base case. Will the ECB prepare for cuts at the meeting this week?
Some Manufacturing gauges struggle to get out of the gates despite cyclical tailwinds. Is the lack of progress related to the Red Sea? Major revisions are needed from the ECB on Thursday.
Chris Waller hinted of a twist to the QE operations, which will likely impact the yield curve in the US. Will the Twist operation support the procyclical trends already seen?
The cyclical rotation is slowly but surely rolling and if central banks add rate cuts to this mix, we are staring directly into the melt up.
The market consensus is turning more and more upbeat on 2024 forecasts for the US economy, but what about China and Germany?
Disinflation is simply not happening as fast as anticipated by our models, but base effects remain very benign in coming months. The stickiness in services is eye-catching, but there is light at the end of the tunnel for the ECB.
Money growth has improved lately in the US, while there are trillions parked on the time deposit / MMF side-lines. If the Fed cuts rates into the current rally, we may see another 2021/2022 melt-up.
Takata from the BoJ has truly restarted speculations in action from the BoJ already in April as he labeled the inflation target as “coming into sight”. Meanwhile, the EUR-flation target may be coming into sight from the other direction despite lukewarm releases today.
This week “5 Things We Watch” dives into the divergence between US and Europe inflation, OPEC continuing its cutting cycle, focus on shipping distortions in energy and Bitcoin boom.
Is China actually rebounding here? Oceanian central banks remain skeptical, while certain cyclical markets are starting to discount a slightly less abysmal Chinese scenario.
Money growth has improved lately in the US, while there are trillions parked on the time deposit / MMF side-lines. If the Fed cuts rates into the current rally, we may see another 2021/2022 melt-up.
Japanese inflation has been trending clearly below 2% over the past 3-4 months and it seems like the so-called “inflation-problem” is non-existent in Japan. Meanwhile, China continues to look like a compelling case.
The gap between trends in forward looking inflation indicators in Germany and the US is striking and increasing. This may be the most important macro trend right now..
We need a very soft inflation report from the Euro area to bring back hopes of ECB spring action. We lean dovish, but dovish enough?
Fed and ECB doves have ultimately killed the last market hopes of rate cuts during the spring from the big three central banks. What does it take to bring back the receiver case and the hopes of April/May cutting action?
The ongoing AI wave has been spiced up with signs of procyclical data releases and improving fundamentals in Manufacturing and global trade. Where does it leave us globally?
If the manufacturing cycle is indeed improving, Natural Gas is starting to look extremely cheap. Here is the case..
We add to our cyclical rotation, while we take profit in our very profitable tech bets.
Big tech keeps surprising on the upside despite heightened expectations, while the Fed is moving closer to a tapering of QT. This makes for a benign scenario for the business cycle despite a lack of imminent rate cuts.
Powell keeps referring to a labor market getting into better balance, but is the labour market really moving into a better balance? It is highly doubtful after watching these two charts.
The technology bet is suffering from a bit of pre-Nvidia fatigue, while there are early signs of positivity around cyclical assets. The FOMC meeting minutes will probably hold the most signal value on the balance sheet.
Forward-looking indicators are telling us that the cyclical momentum will return. Here is how we trade it!
The Chinese authorities have stepped up their cutting game again, which may offer some short-term consolidation if continued. The spillovers to CNY, JPY and goods prices will be clear as well.
PMIs and inflation details will be revealed in the Euro area this week. Will the Euro area developments start to mirror those in the US?
Both input- and output prices have flared up in the US and the 2024 consensus on rates and inflation is blown into smithereens. What’s next?
The spill-overs within German regional banks from the CRE crisis are increasing. Will this turn into a topic for the ECB or for German politicians?
More and more signs point to a plateau in inflation in the US, which makes a return to 2% tough in this cycle. The odds are better in the Eurozone, while the UK remains a basket case.
Japan has entered a technical recession, but markets remain homed in on a few small hikes to bring Japan out of NIRP-territory. Meanwhile, the inflation evidence keeps diverging elsewhere.
Another smoking hot inflation report in the “sticky” categories. Shelter is re-accelerating, while wage-heavy categories continue to surprise on the upside. Goods deflation remains ongoing.
