Something for your Espresso is the Daily morning research letter from Steno Research. Occasional morning letters for the US based audience is also send out under the name Good Morning America
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?
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.
The market consensus is turning more and more upbeat on 2024 forecasts for the US economy, but what about China and Germany?
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.
Is China actually rebounding here? Oceanian central banks remain skeptical, while certain cyclical markets are starting to discount a slightly less abysmal Chinese scenario.
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.
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?
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?
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.
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.
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?
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?
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.
CPI flared up yesterday and markets bleed with it taking out consensus bets ruthlessly. We are still afloat and offer our latest reflections below
Wage data is starting to question the disinflation momentum across G3 economies. Can wage data drive prices or is it a false flag?
Inflation from the US and UK take center stage. May back in play for both?
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.
Chinese deflation is no longer as big an issue for the Western economy, while regional economies surrounding China will likely feel the consequences.
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?
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.
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?
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?
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.
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.
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.
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.
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.
Chinese equities with another strong session. Is it time to jump the bandwagon? Meanwhile, an expected non-event ECB meeting may not be completely sleepy.
The lack of a strong consumer rebound in Europe will make the rising freight rates less prone to impact CPI indices, while it looks much more likely in the US.
