FED is pausing but EM’s are already fed up and the dynamics of the 2022-trade remains our frame of guidance. But what could turn the table?
EM by EM #20 Another energy squeeze in the cards?
Emerging market central banks demonstrated their foresight in 2021, acting ahead of the curve. However, there is a looming concern that the resurgence in energy prices might pose a challenge for them, much like it did in 2022.
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Out of the Box #17 How would US exceptionalism flip the table for the RoW?
Global trade is shifting and the US economy is still going strong but the dynamics are changing as are the times. How will global macro likely change as a result?
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Services Week: What to buy if manufacturing rebounds while services weaken?
We have run the numbers on historical correlations between the US PMI spread and various asset classes to find out what you should buy if manufacturing rebounds while services weaken.
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Positioning Watch – The Chinese disappointment is written all over the latest positioning
CPI is cooling with economic data still suggesting that we are in a Goldilocks scenario. But are markets claiming their victory too early? And will unusual optimism be the catalyst for a recession?
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Commodity Watch: Alternatives to betting directly on the curve
This week has been all about the yield curve and a potential steepener here at Steno Research. We’ll end the week on a short note for those seeking alternative ways of playing the steepener.
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The Energy Cable #30 – Progress for The Bulls
A weaker USD, a slight rebound in the Manufacturing cycle and still tight supply has re-ignited the energy space alongside the broader commodity trend. There is certainly progress for bulls now.
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Commodity Watch – A rebound in the most cyclical asset class?
With the possibility of the manufacturing sector rebounding, commodities might be in for a ride as demand increases in a tight market.
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Positioning Watch – Preparing for (dis)inflation?
With a strong jobs report and a soft CPI print, the market is currently digesting divergent data. In the upcoming weeks, we will closely observe market positioning to interpret the implications for price action. If the inflation paradigm is shifting, how are markets prepared?
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EM BY EM #11 Hangover after the Gold rush?
Gold has enjoyed a revival on the back of inflation and monetary expansion. But what happens when the tailwinds disappear?
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Positioning Watch: War in Russia? Markets are forward-looking but never see it coming
Positioning will be KEY to watch as political risks and tensions mount. We offer our view on the data for the past week as Yevgeny Prigozhin marches on Moscow.
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Something for your Espresso: No help for commodities from China (yet)
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.
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The Great Game – Betrayal from the inside threatens OPEC solidarity
Why – even after successive cuts – does crude oil keep settling on a $70 barrel? The conundrum has pitted the OPEC+ alliance against each other. Suspicious eyes are turning away from outside foes, and are now looking inwards, trying to sniff out the mole who is free-riding on the collective. Will the imposter be detrimental to Saudi’s production cut strategy?
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Positioning Watch – The soft landing narrative is scratching the surface again
With the debt ceiling deal done and yesterday’s stunning NFP numbers, the soft landing narrative seems to be back, and optimism is gaining territory in the global macro scene. See what this means for positioning across asset classes, and whether you’ve placed your eggs in the right basket.
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Commodity watch: Taking the temperature on commodities
In short:
Watch out for the OPEC meeting this week as desperation can become the killer of solidarity, Easing energy pressures lending a helping hand to the EM space, Industrial metals screaming for more Chinese credit impulses
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Positioning Watch: The mystery behind the massive shorts in equities and bonds
Based on price action, equity optimism is back, but positioning data tells us another story. We unfold the mystery, as well as providing you with positioning data across asset classes. Find out if you share the view of traders in this week’s edition.
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Positioning Watch: The EUR is the only one left at the party
With the failure of First Republic Bank and Ueda’s dovish remarks, we once again dig into how traders are positioned across asset classes. Find out if you have picked the right horses in this week’s edition.
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Positioning Watch: Silence before the storm
It seems like traders are hesitant to make major allocation adjustments in the current environment, leaving us with a ‘silence before the storm’ impression. Find out if you have your eggs in the correct baskets in this week’s edition.
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Positioning Watch: Does positioning and fund flows unfog the ambiguity ruling markets?
In this somewhat unusual edition of the ‘Positioning Watch’ we’ll take a look at relevant and readily available data to assess whether we are leaning with or against the wind. Maybe this can provide further insight into the ambiguity which we have experienced in markets lately.
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Commodities Watch – What commodity super cycle?
The Chinese reopening has possibly been the most covered topic since its announcement in late 2022 – at least in financial circles. The awaited lifebuoy for the global economy, which the reopening consensually was thought to be, has yet to truly show up in prices of commodities essential in manufacturing. We prefer to stay long Industrial Metals (mainly Copper) relative to Energy.
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Positioning Watch – Is this a bear market rally or the beginning of a bull run?
We look into how traders are positioned every Saturday to assess whether we are leaning with or against the wind. Is this a new bull run or just another bear market rally? Let’s have a look at the numbers
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Southern Hemisphere Watch #1 – The First Failed Lithium State
At the dawn of the EV-revolution, Bolivia is at risk of being the first failed lithium state. Is Elon Musk to blame? Find out in this article, where I also explain why Bolivian lithium is still a good bet for investors.
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Steno Signals #20 – NO soft landing unless central banks admit to disinflation
It is hard to find a single inflation indicator not rolling over, but there is ONE and that will be tricky to handle for the Fed. Meanwhile, European energy supplies are MUCH better than feared!
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Stenos Signals #9: Demand is rolling over and markets are noticing
We have talked over and over about supply during the past 12 months, but it is now time to talk about demand. Go short the business cycle and buy USD.
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