The Watch Series
Positioning Watch – Oil longs are not as big as you think
Oil positioning is not as long as people think when looking at actual volumes, bonds are still underperforming, and the bearish sentiment in equities still prevails. Read along for more positioning data insights!
Portfolio Watch: The last gasp of a dying man?
We’ve taken a massive WIN in recent weeks, but the markets are precarious here after blood on the street as seasonality shifts. Is there a final surge before the impending collapse?
CRE Debt Watch: The initiator or magnifier of financial crises
Have markets and REITs come to terms with higher interest rates, and should we really care? We’ve looked to see if a collapse was brewing – in the US or in Europe.
Trade Alert: From equity proxy to the real deal
We have recently played the energy trade from an equity perspective, but now risk/rewards favor the underlying commodities instead.
Watch recording from Premium Q&A
Did you miss our Premium Q&A on Tuesday? Don’t worry – you can watch the entire session right here!
Out of the Box #20: Gas and Steepeners brought to you by Muftis and Tsars
The reliance on Muftis and Zars in the energy policy reminds us of the 1970s and 1980s. Steepeners, higher Natural Gas Prices and tighter fiscal policy will likely be the end game in that order.
US Debt Watch: Time for lengthy shutdown?
The U.S government will shut down on Sunday when FY23 funding elapses with no spending bill to replace it. This is how we assess the shutdown unfolding and how it will affect the outcome of the final 2024 budget.
Ifo Nugget: Now good news are bad news
With today’s release of the total Ifo data from the manufacturing sector we wanted to quickly touch upon the main data points we are looking at. We particularly note that good news in Germany, is now bad news for the EUR, since an uptick in the industry means more gas buying, which in turn means more FX outflow.
The Energy Cable #39: A Maturing Bull Market
Is the oil bull market about to become old hat? We are turning our attention to Natural Gas and Uranium to find value in energy markets. Find out why here!
EUR inflation watch: Another couple of months of EASY disinflation on the cards
The EUR-inflation numbers will be helped lower by substantial base effects while we see weakness spreading across services-inflation. The bottom will likely be found in Nov or Dec at levels close to the target.
Trade Alert: We engage in a trade to profit on rising energy prices
We back our words with action as we step into an equity spread trade. Please see the context below for further details
Remember our Monthly Premium Q&A on Tuesday
Tune in to the monthly Q&A to hear all about Part 2 of the Energy Crisis!
Macro Nugget: Why the price at the pump matters for inflation expectations
With the recent surge in oil prices due to supply constraints, we highlight the contrasting market impact in the US and the Eurozone. Our Monday Macro Nugget available below
Positioning Watch: Higher for longer vs Lower for longer?
The Fed projects higher rates for longer, while oil production cuts persist. How do markets play the “Higher for longer and Lower for longer” ? Read our weekly report below
Portfolio Watch: The wheels are coming off in Europe
How do you trade the tight energy supply with increasing consensus in the oil market? We see various interesting proxies and have started to add them to our portfolio.
Trade Alert: Exploiting the weaknesses in Japan
Japan is one of the most energy sensitive countries in the world and the BoJ is not (truly) willing to underpin the JPY. We aim at exploiting this in a RV trade in Asia.
Japan Watch: How will Ueda cope with all of the “pauses”?
Ueda has got the situation under control and managed to orchestrate a whole string of positive market developments on the back of his monetary policy mix. There are no major reasons to change course. Steepen the JPY curve slowly, while accommodating the short-end.
Energy Watch: Time for Nat Gas to outshine Oil?
Is the divergence between energy stocks and oil markets worth noticing? And could the risk/reward be shifting towards other parts of the energy space?
Trade Alert: Entering the Oil-proxy up north
We flip our exposures in the Energy space and find value in adding a lagged proxy trade to the current oil price spike.
Trade Alert: Taking profit on 3 winners
We have closed 3 positions as the risk/reward from here has weakened.
Fed Nugget: Why the Fed dot plot will remain hawkish
Given the information received since the last update of the dot plot in June, inflation has surprised to the upside, the growth gauges have surprised to the upside, while the labor market has surprised to the downside. Net/net no reason to alter the dot plot.
The Energy Cable #38: Time to switch exposures in Energy space?
Both nuclear and oil returns have gone bananas in recent weeks, so it might be time to change focus in energy space? We look at the model evidence across energy asset classes.
Asset Allocation Watch: Best not hope for cuts
Last week we tried to assess where in the cycle we’re currently at and whether the recession risks were receding. In this sequel, we’ll take a look at how various asset classes perform during hikes, pauses, and cuts respectively. Hold on your cheer for cuts maybe…
Recession Nugget: What’s the deal with GDP and GDI
The spread between the income and production side of the economy keeps widening, but are there reasons to worry, or is it once again just a statistical question?
Central Bank Watch: 5 charts on the Central Bank bonanza week!
Our expectations for the big central banks this week presented in a one chart + one-paragraph format!
Positioning Watch: Energy is not (yet) a consensus
Betting against Europe is becoming increasingly popular, but the energy trade is yet to become overcrowded. Here is the weekly positioning report.
US Economy Watch: The Recession That Never Came… Or?
Inflation in the word recession? Some have stubbornly called for a doomslike recession while others see the economy firing on all cylinders. Our data-based weigh in on the topic.
Portfolio Watch: Any juice left in the anti-Europe bet?
The short Europe bet is getting increasingly crowded but for good reasons, while the energy bet, impressively, is not overly crowded yet. That is comforting for EUR shorts as energy is a main driver of European versus US allocation.
EUR watch: Why the ECB outlook is 100% off in 4 charts
We consider the ECB assumptions to be off and see a much “weaker” ECB commitment going forward compared to the Fed. Here is why the ECB is off in 4 charts!
PPI Nugget: New Pressures On Producer Prices To Come?
Prices paid to US producers increased in August by the most in more than a year largely due to energy. Is relative US vs EU market pricing off? Here are the key takeaways!
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Steno Signals
Steno Signals #67 – 150bps higher 10yr yields and parity up next in EURUSD?
We know the playbook from last year if the energy squeeze is just getting started. Rising demand/activity in the energy-intensive industry is a negative for the overall asset market in regions with scarce supply. Parity up next?
Nuclear Nugget (FREE): 3 Questions For The Nuclear Space
Hi and welcome to this free post where we wanted to touch upon uranium and nuclear energy since it has been a trending topic for a couple of weeks now. We pose 3 questions which we briefly try to answer in order to give you an idea where we are and what is going on in the uranium and nuclear space.
5 Things We Watch – EUR Inflation, Ifo Survey, Swedish CRE, Deposit Flights & Nuclear/Uranium
Markets are finally sensing that something is rotten in the economy. We have a look at what to stay on top of in the weeks to come.
