Steno Signals is our weekly editorial on everything macro. The byline of the editorial is Andreas Steno Larsen, former chief strategist at Nordea Bank and CEO of Steno Research.
Europe and China have so far been the safe havens in macro, but we are seeing signs that the light is starting to shut here as well, which begs the question if you can even hide from the slowdown in growth by now? As per usual, we lay out our approach and trade recommendations here.
The gap between surveyed/anticipated inflation and measured inflation has been widening rapidly in recent weeks. Are surveys accurately predicting what’s ahead, or is inflation actually trending lower? Let’s take a closer look.
Everyone is certain that inflation is coming back in force due to tariffs, and while that is admittedly the straightforward conclusion, current live observations suggest a different picture. Could inflation surprise to the downside?
The price action and macro trends are starting to resemble those of early autumn 2024, which ultimately led to a material rate-cutting cycle. Could the Fed be stepping in sooner rather than later once again?
The tariffs are largely priced in, and there are early signs of a “race to the bottom” as Trump’s reciprocal approach prompts countermeasures. Meanwhile, US macro surprises are weaker than those in Europe.
I have the contrarian take that reciprocal tariffs will ultimately be good news, and global trade may actually end up flourishing. This would leave the tariff trades running on fumes!
Reciprocal tariffs will put markets on the back foot right from the start of the week, leaving certain EMs highly vulnerable, while Europe remains well-positioned. Setting the noise aside, the 2025 cycle looks very promising.
“How would you go long the USD at the Wellington open?” is a clear hint of the current sentiment. Could the USD peak already today, and where is the money to be found in this environment? Trade suggestions for this week are attached!
There are (and will be) Trump headlines right, left and centre over the coming weeks. Trading macro is therefore all about being right on the core underlying macro trends and cutting out the policy noise!
We present our best charts on gorwth from around the globe!
What a weekend in Trump-land, set against a macroeconomic environment that, as far as I can tell, looks more like 2021 than 2017. If we cut through all the noise, it seems we’re still early in the business cycle—and things are accelerating once again.
On the back of an uber-bullish Philly Fed Manufacturing print, we take a look at the sensitivities of assets to a boom in the manufacturing economy.
Reflation is roaring across global economies, and higher inflation on a trend basis is the last thing markets need – but it might be what they get. While that’s not overly bearish for risk assets in the medium term, it might be the final nail in the coffin for equities short-term.
Consensus is being torn apart from every direction—right, left, and center. This is typical in the early stages of a new trading year. So, what’s the current consensus, and how might it be wrongfooted? Let’s take a closer look!
We have complied a chart deck with our best charts on inflation and what to look out for in macro in 2025
We go into the year long equities, while being more neutral on US Fixed Income and the dollar. What are the key events to watch this week?
More US cuts for 2025 than anticipated by many?
Here’s a look at 2025 and how to trade macro. The short-term outlook remains heavily dependent on the debt ceiling, but there are reasons to be optimistic about risk assets in 2025.
Contrary to the current prevailing consensus, liquidity appears poised to improve significantly during January. The debt ceiling dynamics play a crucial role in this, as they directly influence the FOMC’s considerations.
We continue to observe soft surprises from the US economy, while momentum in China is outright collapsing according to our models. Below is the full Christmas overview of the economic calendar, along with guidance on how to trade and navigate it effectively.
Most risk-takers were caught off guard by Powell’s attempts to bring the Fed ahead of the hawkish repricing last week. Will this prove to be another incredibly ill-timed flip-flop from the Fed?
Markets are back discussing inflation fears ahead of 2025, but is it really such a big thing? The outcome space for 2025 is huge and I am personally torn between the 2007 and 2021 analogy for now.
The labor market report was weak enough to keep the Fed on an easing path but not weak enough to truly spook otherwise stretched risk asset markets. Here are four asymmetrical Santa Powell cases:
China is curbing exports of critical metals, while Russia plays hardball on uranium. The power vacuum between Biden and Trump is creating a wealth of tradable trends in commodities. Here’s your overview!
We’ve started to observe weaknesses in the US economy across our growth models, a major game changer with the ISM report and NFP coming up this week. Could weakness in the US economy prompt the Fed into a 25 bps cut in December? Odds are increasing for such a scenario.
The trend shift in fixed income is remarkable and sharply contrarian to the post-Trump consensus. We expect more of the same ahead, coupled with a firm decision by the Fed to support liquidity in December. Meanwhile, gold may see a catalyst.
The Chinese issuance of USD-denominated bonds in Saudi Arabia may seem negligible on the surface, but it holds significant signal value for the direction of the USD. If China feared a strong USD – or planned a devaluation – this would be an odd move. It could also signal a farewell to gold as a key strategic asset.
Markets are celebrating the appointment of Scott Bessent as the new Treasury Secretary. He is seen as much more growth-friendly than markets feared—and he’s a snack for doves! But how will his policy initiatives affect markets, and are markets overreacting to the news? We’ve got you covered for the coming macro week!
Liquidity trends remain tighter than anticipated, primarily affecting government bond and repo markets. The current market frenzy actually needs a bit of bad news to provide the liquidity boost required to take the next step.
This week’s The Drill looks at commodities post Trump election where calmness has started to ensure as risks were too greatly priced.