We are back up on the week having forecasted the CPI record better than the street but contrary to the prevailing sentiment we think this juncture may prove a little counterintuitive
Many have profited from MXN carry in the first half of 2023. But is there more left to squeeze out or is it running on fumes? We give our take here and assess the structural patterns at play in Mexico in relation to recent performance and the geopolitical climate.
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’.
We are back to the good old discussion on whether eight straight months of manufacturing contraction equals a recession or not. The jury is still out, and equity markets have not received the memo yet in case. The ISM Services will be a guiding star, but not a decisive one.
Nikkei at 33-year highs again this morning as the melt-up continues. Falling inflation outpaces mediocre liquidity -and growth outlooks, which goes to show how a rapid disinflation can be seen as manna from heaven initially.
The West sent checks, while China focused on supply-side policies in response to Covid. But what will Beijing do now?
As a new addition to our editorial, I will now provide a monthly overview of emerging markets, taking a step back from the intricacies and offering a broader perspective. The purpose of this feature is to outline our current positioning within the market cycle and highlight the key factors we are monitoring surrounding EM.
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 ECB members agree on a hike in July, but September is still in doubt after what may have been the most hilarious update to staff projections in recent years. Rear-view mirror policy-making continues.
The inflation report was a mixed bag of goodies, but good enough for the melt up to continue! The “Powell-flation” indicator points to a pause from the Fed this afternoon, which is likely to emphasize the MELT UP for now.
The market is now clearly starting to price in a soft inflation number from the US today. The inflation report better deliver or else the market is in for a rude awakening.
The market is now clearly starting to price in a soft inflation number from the US today. The inflation report better deliver or else the market is in for a rude awakening.
In this current cycle, India has emerged as a favorite among emerging market investors. But are we seeing a bubble similar to Japan in the 1980s? Or will India be successful in replicating the success of China? While we maintain a positive outlook – India counterintuitively is not cheap.
China’s export/import activity is telling for the global economy and commodities remain a sell. Meanwhile, the TRY is getting annihilated despite Erdogan’s attempts to restore economic credibility.
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!
Was it too early to burry the Chinese rebound? Manufacturing is now showing signs of life. Meanwhile, the FDIC sounds worried about the health of the US banking system in their quarterly report. Expect a stinker in the ISM Manufacturing report today.
As we close out our first week with a live portfolio, we are excited to introduce our new weekly watch piece, providing a comprehensive summary of our trading week. Every Friday, we will release this publication, and we extend a warm welcome to you all in this premiere edition!
While OPEC+ tries their best to prop up prices via cutbacks on supply, demand is evidently still not as strong as oil bulls would’ve liked. Will the Chinese momentum pick up and deplete reserves and will the turn of summer in the northern hemisphere counter such effects?
The FOMC hawks have been parading over the past 24 hours, but the base case remains solid for a pause in June. Don’t count on further hikes, but maybe on a “prolonged” pause. Receive July vs paying Dec in SOFRs?
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.
As the markets evolve, we adapt accordingly. Although the reopening of China’s economy is still ongoing, the optimism surrounding it is gradually diminishing. Simultaneously, the worsening economic data from Western countries indicate a significant slowdown. With the once-promising light at the end of the tunnel slowly fading away so do the flows. In this short piece we reveal our new position
What’s going on with Italian banks? How does the Chinese reopening look? What are the ramifications of a US shutdown? Will consumers run out of excess savings? And are FX crosses ready for a recession? Find the answers in this week’s edition.
The Chinese comeback is still very services based, which has proven to be an issue for the energy bull case. Will the Chinese momentum be reignited in H2 and where does it leave the energy space?
The China play has thus far not been profitable but I refuse to back down on my underlining analysis- Yet some reconsiderations are in order and it might be the start of a larger reevaluation. But for now the course of the ship is intact
In recent weeks, social media and leading financial media have been flooded with sensational articles about the dollar’s demise. In this piece, I will provide an analysis of the actual immediate obstacles facing the American dollar where USD hegemony is being undermined. Given the current US debt ceiling theater, one can scarcely think of a better point of reference than the debt default champion of the Western hemisphere: Argentina
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.
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.
In Q1, we had a long position in copper. However, since our exit, industrial metals have experienced a reversal, and most of the gains YTD have been wiped out. But could the copper story have another leg to it? In this piece, we will share our perspective combining the macro with the development from the relevant EM frontlines.
The banking crisis seems to be back, Asia is apparently the new black, and the hopes of an economic comeback in the West is vanishing. Things are certainly not as we thought a couple of months ago, but follow along as we look at the best hideouts in this week’s edition.
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.
