The RBA echoed the Fed and sees sticky prices as a reason to remain on hold. The RBA has adopted a classic symmetrical stance, something that could spread across the G10, unless the growth picture stalls further.
Something for your Espresso: A week of respite before the inflation numbers?
The US calendar is light in the week ahead, meaning that European central banks take center stage. Will high-beta assets continue to soar on hopes (expectations) of cuts?
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Steno Signals #98 – The recession panic is back right as liquidity is returning!
The recession narrative has returned after a series of weak PMIs. Betting against the returning recession hysteria has been a profitable strategy since April-2020, but will it be so again this time? Hallelujah!
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Steno Signals #97 – 5 reasons why the CNY will be devalued next week and how to trade it
The list of triggers for a material devaluation of the CNY keeps getting longer and action is probably imminent. The question is how markets will react to such an event and whether it will prove to be a new trend.
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Something for your Espresso: Waiting for the dust to settle..
The embedded value in risk assets is improving, but the USD wrecking ball will continue into this week. The question is whether we have imminent action ahead from the BoJ/MoF or the PBoC as a consequence.
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Steno Signals #96 – A major devaluation of the CNY could be imminent
China is preparing for something major. That seems increasingly obvious judging from the stockpiling of important resources. Could it be that they are preparing a major one-off devaluation of the CNY?
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Something for your Espresso: More USD strength is coming!
The strong Chinese GDP numbers were overshadowed by a continued weakness in Asian FX trends. Energy and metals typically continue to perform in such an environment.
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EM Watch: China is preparing something BIG!
The strategic shift from Real Estate to Green-tech manufacturing in China is very evident and it will likely impact Europe to a much larger extent than the US. Counterintuitively, it means that two of the strongest inflation hedges stem from China and Mexico simultaneously. Here is why!
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Energy Cable: Melt UP in commodities upcoming?
While we have booked profits in our long oil bets, we are getting increasingly bullish on the broader commodity complex. Especially a couple of metals look extremely interesting here.
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Something for your Espresso: Chinese deflation arriving in Europe but not in the US
The gap is growing between the US and peers. Both on inflation and unemployment. Will this lead to surprising rates decisions already this week? Meanwhile, we don’t think energy prices will drop because of Israel pulling out troops.
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Reflation Watch: Has Japan turned a page, and have markets gotten ahead of themselves?
The BoJ delivered a historical hike – its first in 17 years – last week. Does this mark the turning point for Japan for good, or do risks still linger?
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Explainer: the 3 faces of Chinese consumer pessimism
The Li Keqiang Index witnessed its most robust monthly surge since 2005 but consumer confidence is rotten?
Understand the paradoxes of the Chinese consumer in this explainer.
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Energy Cable #62: Biden is selling crude straddles, while something is cooking in China
This week we hone in on the consequences of the Ukraine’s successful attacks on Russian refiners and how to play it along with some thoughts on our profit taking in metal space as something BIG is cooking in China!
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Portfolio Watch: Data green-lighting continued rally – cautious metals however
China has been in the limelight recently, and the attention from clients match the evident rotation in managed positioning. While tremendously yielding, we’ve decided to de-risk in metals but keep overall cyclical exposure.
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Chinese Momentum: Driving Markets or a Crowded Consensus?
China’s vehicle of choice in achieving its growth targets has long been real estate. With RE still in shambles, will manufacturing be the stand in, and has the market in fact crowded out the China case?
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Something for your Espresso: Unions paving the way for Ueda
>5% wage gains for the Rengo union members in Japan, which paves the way for policy action from the BoJ. Meanwhile, the PBOC refrained from cutting. Possibly as rate cuts are off the table in the US given the PPI developments?
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Rotating EM Flows: From Japan to Emerging Asia
Japan has reemerged as a feasible investment these last years, but is the driving force of this performance ebbing, as China returns to the table? A look at the relative winners and losers if China in fact is returning.
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Something for your Espresso: Big in China instead of Japan?
Sentiment in Japanese stocks has weakened ahead of a potential lift-off on front-end rates in March, while the JPY FX case looks compelling still. Meanwhile, Chinese sentiment is improving both directly and via proxies.
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3 take-aways from Li Qiang’s speech
With China slowly emerging from the COVID abyss, what are their plans for economic recovery and long-term growth?
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Something for your Espresso: The inflation target is coming into sight
Takata from the BoJ has truly restarted speculations in action from the BoJ already in April as he labeled the inflation target as “coming into sight”. Meanwhile, the EUR-flation target may be coming into sight from the other direction despite lukewarm releases today.
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EM Cycle Watch: South Korea a good buy?
Amidst some EARLY resurgence in China and signs of cyclical rebound, South Korea looks increasingly compelling. Could this convergence of factors signal a strategic entry point into South Korea’s manufacturing and AI-focused market?
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Something for your Espresso: Is China rebounding or not?
Is China actually rebounding here? Oceanian central banks remain skeptical, while certain cyclical markets are starting to discount a slightly less abysmal Chinese scenario.
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Something for your Espresso: There is no inflation problem in Japan
Japanese inflation has been trending clearly below 2% over the past 3-4 months and it seems like the so-called “inflation-problem” is non-existent in Japan. Meanwhile, China continues to look like a compelling case.
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China Watch: Trading the latest rate cut stimulus
Was Tuesday’s aggressive stimulus just the PBoC’s latest desperate attempt, or was it in fact enough to get the distraught property sector and broader economy back on track? Our interpretation of the mixed signals here.
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Something for your Espresso: The party is still ongoing!
Big tech keeps surprising on the upside despite heightened expectations, while the Fed is moving closer to a tapering of QT. This makes for a benign scenario for the business cycle despite a lack of imminent rate cuts.
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Something for your Espresso: The Chinese cutting cycle is back on fire
The Chinese authorities have stepped up their cutting game again, which may offer some short-term consolidation if continued. The spillovers to CNY, JPY and goods prices will be clear as well.
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Something for your Espresso: Chinese DEFLATION
Chinese deflation is no longer as big an issue for the Western economy, while regional economies surrounding China will likely feel the consequences.
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EM by EM #42 China could do with a cold Turkey
While all the hype in EM is about China these days, we are healthy skeptics. We’d like to see Beijing adopt a more structural approach to truly win us over, similar to what they’re doing in Turkey
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EM by EM #41: Fearing the Fury but Fading the Fear
Buy the fear and sell the hype is our overarching mantra in EM these days. Read how below!
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5 Things We Watch: Iran, China, Crypto, Inflation and the Fed
Macro is on the move and we have diverging trends in inflation. Find our brief overview of the five themes that move markets the most this week in global macro.
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