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.
Welcome back to our Wednesday series where we take you through the world of global macro and what to look out for going forward. Since we have not covered much else than China this week and the fact that it remains one of the key macro stories we thought we would exclusively zoom in on 5 things we watch related to China.
Either the commodity market is 100% wrong or else China is amidst a rebound. What does that mean for the hopes of getting inflation back to target? And will it impact the yield curve? Here are the three most important questions for investors right now!
Ahead of the CPI release tomorrow we zoom out to provide you with the bigger picture and what to watch out for in global macro over the next weeks.
The Bank of Japan has fueled a global curve steepening and the US Treasury is forced to emphasize the trend with substantial ramifications for liquidity, rates, FX and equities. Here is how we play it!
The US credit rating downgrade is making the rounds, but is it even relevant? We take a look at the empirical data alongside updates on the five things we watch currently in global macro.
We are now one step closer to a complete normalization of the monetary policy in Japan and I guess it is safe to say that the only thing that is normal in this cycle is that monetary policy returns to “normal”. The boomer trades are back!
It’s central bank week again, and that of course means that we provide you with all you need to know ahead of the big meetings. Recent inflation numbers have pause written all over it, but will central bankers keep their hawkish tone?
We are at macro crossroads as markets start to chase a cyclical rebound in the economy. Is a cyclical rebound a true possibility or is this the famous fatamorgana of a soft landing just before the actual recession kicks in?
The USD has weakened materially over the past weeks, which could be an early harbinger of an improving growth cycle. If cyclical growth is indeed rebounding, right about everyone will be wrongfooted. Here is how we position for it..
Positioning and price patterns reveal that the pain trade is higher rates- and higher equities, while the recession is slowly but surely being called off by the consensus. Here are four reasons why everyone misunderstood the recession risk and why it is still alive…
The equity rally continues, Xi is in the middle of structural issues, house lending is falling off a cliff in EZ and inflation is waning fast. Read more about the 5 things that we watch currently in this week’s edition of ‘5 Things We Watch’.
Expectations are real, while the reality is nominal! Soft data keeps getting the reality wrong, which is probably a phenomenon that relates to the extreme spread between nominal- and real figures. Will this issue keep wrong-footing everyone?
Geopolitics remain tricky to trade and we don’t see any strong risk/reward trades on the back of the turbulence in Russia over the weekend. Meanwhile, Europe remains an odd consensus bet, while UK inflation and US housing markets risk wrongfooting everyone.
Incentives will matter a lot in coming weeks and months if the Fed has actually paused. Interest rate volatility is likely to come down, which mechanically leads to increased risk appetite.
The Central Bank Bonanza continues with our live coverage of the ECB Liveblog. Remember to post your questions below
Welcome to the Central Bank Bonanza with meetings of both the Fed, the ECB and the Bank of Japan. We’re covering it all live here on stenoresearch.com. Ask your questions below!
Should the Fed skip/pause on Wednesday, we’d argue that market positioning will quickly unwind and turn optimistic. The soft-landing narrative is back on the agenda and all the mistakes of the past are likely to be repeated.
When headline inflation wanes fast, real wages grow, while corporate profits shrink. This is now the base case for H2-2023 while Chinese and Turkish political developments MUST be watched from a macro perspective. Here is why!
AI is mana sent from heaven, while McCarthy and Biden have allegedly agreed on a debt ceiling deal. We continue to favor positions with a positive beta to slowing inflation despite the recent concerns around stickier for longer.
We have launched our live portfolio monitor, which allows you to track our performance and our positions in real-time. The live feed will be available for premium subscribers only, while we will deliver occasional updates on the composition for basic subscribers as well.
Given the lack of an imminent economic crash risk, bond bears have been back in the driver’s seat. No news is bond bearish news, which in turn is likely to exacerbate the already worsening root cause of the deposit crisis. We are on high alert for the ramifications of the price action in the USD.
The USD debt ceiling is a returning topic and it’s typically not overly important for markets, but this time is likely to be different. The repercussions for USD funding markets may be material and in sharp contrast to consensus expectations the USD may stage the biggest comeback since Lazarus.
How do we approach the most anticipated recession in newer history when the labor market keeps holding up? And how severe is the banking crisis in a historical context? We aim at providing you with the answers here.
All eyes are on the Fed and ECB in the coming days! We have got you covered with our LIVEBLOG throughout Wednesday and Thursday.
We have been bullish on equities through the year but now see increasing signs warranting a defensive shift in positioning. Liquidity is drying up both in Europe and the US, and BoJ has effectively made further liquidity adding interventions unnecessary. China may be the only place on earth with positive liquidity trends.
Here is a list of four concrete ways that consensus could be wrongfooted based on my discussions and findings after having travelled Asian institutions last week.
The de-dollarization chatter is back after the IMF COFER data showed a new drop in the relative size of USD FX reserves in Q4-2022. Currently, everyone agrees that the USD will weaken from here, which is when you need to become worried.
Evidence is gathering that the SVB-fueled banking stress indeed will turn into a recession, but instead of a fast and rapid liquidity driven recession, we are rather slow-walking into a credit crunch over summer.
Back after a great week in The Big Apple. Investors have four major themes on their radar as I see it. Today we digest those themes and asses how to trade them! Enjoy
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