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?
Steno Signals #87 – Inflation is BACK! Position accordingly..
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?
Something for your Espresso: Pfandbrief, Achtung Achtung!
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?
G3 Inflation/Wage Watch: US inflation will not return to 2% this cycle
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.
Something for your Espresso: Bye bye NIRP and growth?
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.
USD inflation review: Powell has to invent a new measure..
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.
Something for your Espresso: Is disinflation with us in the room right now?
Wage data is starting to question the disinflation momentum across G3 economies. Can wage data drive prices or is it a false flag?
UK CPI Nugget: Is something wrong with services?
Markets betting on one of the softest MoM services CPI prints in UK inflation history in January. Feasible? Yes, but…
Something for your Espresso: May back in Play?
Inflation from the US and UK take center stage. May back in play for both?
Steno Signals #86 – Trading the relative Fed and ECB balance sheet development
With an increasingly tricky timing of the first rate cut, we look for tradable trends in balance sheets instead. Balance sheet trends are easier to predict, which makes them very tradeable. Here is why!
USD Inflation Watch: Softer than recently seen – May back in play!
With revisions out of the way, we can look forward to the US CPI report on Tuesday. Everything points towards a softening and a May cut should be back in focus!
Something for your Espresso: A day of revisions and reckonings
We are approaching make or break territory for early spring cuts from the ECB and the Fed. Revisions to CPI numbers will play a crucial role in the coming days.
Something for your Espresso: Chinese DEFLATION
Chinese deflation is no longer as big an issue for the Western economy, while regional economies surrounding China will likely feel the consequences.
Inflation Watch: Adjusting for revisions, tax, seasonality and sunspots
The revised weights -and seasonal patterns will be revealed by the BLS on Friday, while we will get the updated weights from Europe alongside an understanding of the tax impact on HICP inflation.
Something for your Espresso: Walking the last mile
Central bankers accept that the next move is a cut, but they are continuously talking about “walking the last mile” on inflation. How long does it take to walk a mile?
Something for your Espresso: Wen recession?
The US economy is accelerating, and various indicators have clearly bottomed out already. The question is if prices will accelerate alongside the rebound in activity and whether the rates market is still wrong.
SLOOS Survey: The US economy is re-accelerating and money growth is back!
Is inflation going to re-accelerate? The bottom is in for the SLOOS survey, which tends to be a strong cyclical indicator in the US economy.
Something for your Espresso: Food for hawks or doves?
The NFP spooked rates markets, but there are reasons to believe that technicalities were behind the spike in job creation and wage growth. Time to receive again?
Steno Signals #85 – NFP report full of FAKE news?
An extraordinary NFP report spooked markets on Friday, but is the report full of fake news? The NFP admittedly rhymes with the big picture observations. The US economy is accelerating, while Europe is stuck in the abyss.
Something for your Espresso: Is Powell right?
The US economy is probably accelerating. The ISM PMI defied weak seasonality and the orders to inventories. Will the NFP defy seasonality gravity today as well?
G3 Watch: Timing the first rate cut
The first rate cut is a timing question from both the Fed, the ECB and the BoE now. How do we trade the first cut and why are seasonality issues important to bear in mind? Read along here.
Something for your Espresso: March 23 PTSD
The NYCB scare made for an almost PTSD like reaction in cross-asset markets. So far, we consider the story a non-event and put more emphasis on the guidance from Powell.
Something for your Espresso: Disinflation going down under
Morning from Europe ahead of a big inflation day. Disinflation has reached Australia, which is good news for our AUD duration bet. The January FOMC meeting will be all about QT.
US Liquidity & Debt Watch: Yellen to decide the QT tapering timing tomorrow
Yellen holds the keys to an early end to QT. At the surface, she holds all the incentives to get the QT tapering process started sooner rather than later. Will it be reflected in the QRA details tomorrow?
Something for your Espresso: No issuance bomb from Yellen
The risk of another supply-driven sell-off in USTs has diminished as the fiscal trajectory in the US is improving slightly due to an improving income side. Meanwhile, we have a big day ahead for the Euro area.
EUR HICP Forecast: HUGE vol in Germany. A deflation shock?
Germany is the biggest inflation battleground in January. Volatility in forecasts is enormous. Will Germany deliver a deflationary shock compared to expectations?
Something for your Espresso: Ever Grande, Ever Given, Ever Everything
Tensions are rising between the US and Iran as the Red Sea troubles are widening. Meanwhile, Evergrande is liquidated in China but with limited spill-overs.
Steno Signals #84 – The Red Sea troubles are spreading FAST!
The issues in the Red Sea are spreading from containers to dry bulk and energy. The impact from the Red Sea will not be seen short-term, but it may prove to be a sneaky and relatively lasting positive impact on inflation.
Something for your Espresso: March or April?
Markets are betting on an April cut from the ECB, but the January HICP may lead to a larger repricing of the March probabilities as well. Meanwhile, the US economy appears to be in a temporary goldilocks phase.
ECB Watch: The ECB is likely wrong on all major parameters
We see downside risks to the ECBs growth-, wage and inflation forecast for Q1. Is a March cut in play? Or is the market right that they will have to take another dovish step in March before cutting in April?