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
Market consensus clearly hoping for soft inflation prints from both the UK and the US this week. Will they get more fuel for the disinflationary rally?
The duration scare is back after a weak 30yr auction. We are yet to enter a home-run environment for USD durationistas, but a flatter curve may be on the cards until the December FOMC-meeting.
Oil and bonds have recently taken divergent paths, and we believe it’s worth pondering the factors behind this recent price action. Read our morning thoughts below
There are plenty of “real economy” red flags in recent price action. Coupled with signs of financial stress, we believe our recession case is increasingly supported.
While Korea is banning short selling, the US appears to be increasingly recessionary. Distortions and oddities persist, causing ambiguous data prints, all very characteristic of the post-COVID cycle. Read our latest morning thoughts below.
The quarterly SLOOS results are out later today ahead of “empty” data week. Powell will take stage on Wednesday and Thursday. Will he backpaddle if the melt up continues?
When Powell allowed market based conditions to dictate the Fed Funds path, he indirectly also introduced a hawkish reaction function, if risk and term premias abate in coming weeks.
Powell sounded dovish yesterday, but also opened the door for a potential unconstructive feedback loop by allowing market conditions to dictate the policy rates. If market rates drop and equities perform, the FOMC will have to act in December.
While the overarching momentum of the economic cycle is undoubtedly disinflationary, the United States stands out as the last man. Meanwhile China is in a crisis of its own. Read our morning report below
The Bank of Japan opens the door for >1% 10yr bond yields alongside a large revision of inflation forecasts and yet the JPY weakens again – exactly as we anticipated. Meanwhile, the US Treasury issuance bazooka was nowhere to be seen, or was it?
Early regional evidence suggests that we will see a dovish surprise to the EUR-flation numbers this week as we forecasted. Will the Fed and the BoE be convinced of similar dovish inflation trends when they meet?
A bloodbath in equities, a new re-steepening of the curve and signs of life in the long energy trade again. It sure doesn’t look pretty out there, but will Lagarde and the ECB admit to it? Big day ahead!
Finally, markets have awoken to the Chinese stimulus. Read here for our Morning takeaways on the matter
The recent pressure on bonds could soon be compounded by additional external sources of stress. While economies may be undergoing decoupling, the world of finance remains highly interconnected on a global scale. Read our morning post below
Middle East unrest, Yen weakness and CCP worries- all interlinked with the soap opera on the Hill in the eyes of the market. Read our monday daily below
From a slide to a climb: the yield curve seems increasingly poised to slope positive in the near future. Good news? Well… Read our morning thoughts below
Restocking and US consumers keeping up relentlessly. We think it is bound to come to an end soon. Read here why
US Congress, Middleast, Japan, China, Europe… Plenty of stuff to keep track on at the moment. Read our latest reflections below
Stocks seem to hold up in the storm. But what will it take for a capitulation? Read our daily below
We’re back at it this fine monday with 3 semi depressing macro-risks which all have one common denominator: Energy. Read them below
Ok, probably a bit of a baity headline since gasoline demand probably never left the building, except that the EIA weekly data suggested as much. That conclusion is now off the table again after yesterday’s figure, but now the weakness has moved to oil markets. Is that fair?
A big inflation day is ahead with focus on energy markets. The EIA- and OPEC will release reports as well. Expect a dovish vibe in the CPI but new positivity around oil and gasoline.
We are walking a tightrope with war, high energy prices and recessionary risks. Is the market pricing congruent or does market pricing suffer from cognitive dissonance here?
Oil, USD and rates are up on the back of the increased Geopolitical risks. Will the fundamentals back up a continued move in that direction over the week?
The EIA report shocked oil and gasoline markets and the big question is whether the weak demand is a harbinger for the broader US economy.
The curve steepener remains the best risk/reward trade in global macro as the Asian doom loop now adds to steepening pressures. With the PBoC, the BoJ and the CBI in intervention territory, should we expect further pressures?
The USD wrecking ball haunts again and several Asian Central Banks now actively intervene. The issue is that the USD is not the trigger of this move. Energy is.
There are signs of a pick-up in German activity in the details from the IFO survey. A long in Nat Gas looks increasingly compelling, while US Manufacturing keeps rebounding as well.
The IRA has saved the US from entering a recession alongside peers this year. If the appropriations negotiations this week lead to a bye bye to Oprahnomics, then we consider a recession a done deal for 2024. Buckle up!
A crucial week is ahead of us in global macro as the only remaining bastion in the global economy may be heading into a shutdown. Meanwhile, we are watching for signs of an emerging restocking cycle in Germany.
