The current sell-off is driven by position squaring not least in USDJPY. The turning tide on USDJPY will impact the EM space largely and also knock-out a few EM darlings in commodity space!
Steno Signals
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.
The Week At Glance: A look at US Cycle indicators. You sure consensus is right?
Are US cycle indicators rebounding right, left and center in coming months, and will inflation expectations follow? It sure looks like it from our model package. Meanwhile, don’t expect the Chinese rate cut to lead to metals buying.
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Steno Signals #109 – What if we are all wrong on liquidity, rates and commodities?
What if the Fed is wrong, we are wrong, and the consensus is wrong? Here’s a look at liquidity, rates, and commodities amidst a macro landscape with a very broad outcome space for the coming 12-18 months.
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EM Watch: China FLOODS global copper markets amidst the plenum
Exports of Copper from China are THROUGH THE ROOF, which is a strong hint that the local consumption is on the floor. The CCP plenum has not addressed the short-term activity, meaning that the West will be flooded with Copper now.
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Macro Watch: 5 Charts that’ll cure your recession blues!
There is currently a lot of focus on the US cycle and whether it is weakening sufficiently to prompt a 150-200 bps cutting cycle, and potentially even a 50 bp cut in September. Here are five charts showing that the US economy is improving.
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Equity Watch: The Trump versus Biden Basket
A deep dive into our Biden and Trump basket along with a look at the sensitivities to the broad market and a look at small businesses should Trump get elected.
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Great Game – Trump: Election or Coronation?
This week’s edition of Great Game following a remarkable weekend. While we cover the Trump assassination attempt elsewhere, today we’ll concentrate on the political repercussions and discuss other pertinent issues, such as the Chinese Policy Plenary.
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The Week At A Glance: Another inflation shocker in the UK paired with a rebound in US retail sales?
Will the UK economy keep delivering out of the ordinary inflation numbers despite the disinflation seen elsewhere, and will the US consumer rise from the weather abyss seen in April/May? Let’s have a look at the week ahead!
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Steno Signals #108 – A messianic Donald
All talk about Biden will likely fall silent after the attempted assassination of Donald Trump. Will a “Messianic” Trump impact the markets in the weeks ahead? Meanwhile, the hot PPI report on Friday served as a friendly reminder to still care about inflation.
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The Week at a Glance: Stagflation or (temporary) Goldilocks?
Inflation data from the US will take center stage this week after a week of weak growth gauges. Will the US momentum look stagflationary or smell of temporary Goldilocks?
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Steno Signals #107 – The 3 indicators you NEED to watch on recession risks
The recession chatter is back in the US, and for good reasons. The big question is whether it will matter at all for markets. Here’s a list of indicators you need to watch to assess when or if to turn bearish.
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The week at a Glance: Time for a coordinated Sintra-messaging?
The annual ECB conference at Sintra is a strong forum for signaling a coordinated central bank direction. This year, the conference takes place amidst weak US economic surprises, with the Fed perceived as the most dovish central bank for 2025.
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Steno Signals #106 – The cycle is improving. Not weakening.
It seems like old hat to discuss the weakness in labor markets as the cyclical vibes are getting stronger out of the high-beta economies globally. Will the US cycle follow suit?
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The Week At A Glance: Time to bet against the USD?
Is it time to bet against the USD based on relative surprises and relative inflation numbers? The week ahead is full of interesting inflation data.
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Steno Signals #105 – What to make of the rising bankruptcies?
Recession chasing has become an obsession for many, but how can we use the current bankruptcy trend to trade the macro cycle in a clever way? Here are the findings from our bankruptcy studies.
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The week at a glance: UK CPI report is taking the headlines together with Le Pen
Will the UK Service inflation finally soften? The consensus once again hopes that service prices will de-accelerate in the UK, while Le Pen is trying to pour oil on troubled waters in French fixed income.
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Steno Signals #104 – Get ready for a WAVE of liquidity in July!
While the rate of change is turning bearish on growth- and inflation, we may (temporarily) end up in a goldilocks scenario in July. Bonds tend to perform alongside equities in such a scenario. Buy risk and head for the summer cottage?
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The Week at A Glance: Everything you need to know ahead of the FOMC and CPI
The Fed will have to deal with a backdrop that is more hawkish than anticipated on most major parameters. Will they dare to continue highlighting a couple of cuts this year?
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Steno Signals #103: A blood-bath in metals in July!?
There is a material cluster risk in metals ahead of July deliveries and the consensus remains alarmingly upbeat in Gold, Silver and Copper. Here is why it could turn into a July bloodbath in metals.
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The Week at A Glance: The comeback of the (growth and inflation) cycle
We expect the release of ISMs and labor market data to rhyme with an increase in activity in May relative to April. The ECB meeting will likely be mostly about buying time after the (almost) pre-announced cut.
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Steno Signals #102 – Bad inflation news everywhere
We are getting unpleasant inflation surprises across the West again and the progress on inflation has even stalled in the Euro area. Can the consumer survive a prolonged period of inflation?
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The Week At A Glance: Another hawkish EUR-flation surprise?
The consensus for EUR inflation is seasonally soft, while there is a seasonal adjustment uncertainty around the PCE release later this week. It looks like another relatively hot inflation week.
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Steno Signals #101 – Introducing the Washington DC Crypto Put!
The full-blown underpinning of crypto by Donald Trump increases the probability of pro-cyclical fiscal- and monetary policy. Ensuring a floor under Crypto developments is of utmost relevance ahead of the election for Biden.
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EM Watch: Have Copper markets been hit by a bus full of tourists or by the Chinese economy?
The front-month Copper bet has been extremely popular in recent weeks/months, but is the Copper market being run over by a bus full of tourists or by an actual increase in the demand in the global economy? All roads lead to Shanghai!
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The Week At a Glance: MPC members better prepare a Bailey for the Coffee, while Ueda better pray for a weaker JPY..
Action-packed week ahead with overseas central bank action, while we get PMIs and CPI prints at home. The FOMC meeting minutes will likely steal the stage and set the tone on markets Wednesday, and we’ll see whether they address the ongoing commodity-driven re-flation cocktail.
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Steno Signals #100 – China’s MAJOR power grab on Copper supply chains
The next few weeks will be absolutely vital in copper space as we will see whether China will offload Copper stocks to the West as they are currently paid to do. If they DON’T, we can conclude that China is building stock for strategic purposes.
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China Watch: No one has noticed that China is exporting INFLATION again..
The Chinese industrial production pace is back at pre-pandemic levels, while the stock market has never recovered. We are slowly but surely seeing a build up of momentum that could turn out to be very self-fulfilling.
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Out of the Box: Don’t worry about the real rates spread, ECB
We’ll present 3 arguments for the ECB to commence its rate cutting cycle and not be afraid of the Fed and their policy rate decisions.
The Week At A Glance: It’s getting hot in here! CPI week..
Full focus on the US CPI report and the consensus is heating up! Meanwhile, the UK labour market will be important ahead of a clutch UK CPI report the week after.
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Steno Signals #99 – Freddie Mac gearing up to unleash trillions for consumption?
As the pool of excess savings seems to be eroded, Freddie Mac has put forward a suggestion that holds the potential to unleash trillions of dollars. Will the US consumer fire on all cylinders again?
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