With Central Bank rate decisions taking headlines this week, we have a look at the 5 things we watch in global macro, and give you our take on FOMC, BoE and more.
Something for your Espresso: Energy not yet a consensus bet, being short Europe is..
Energy keeps performing against all peers and it seems like positioning is still underweight despite the recent bullishness. European positioning is getting short, but data keeps backing up that view.
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Inflation Watch: A bottom above 2%? 10 charts on USD inflation
The Fed is likely to conclude that the cocktail of rising headline inflation and dropping core inflation is enough for a skip, but by refusing to act on emerging renewed price pressures, they will likely let the market do the dirty work!
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Something for your Espresso: USDCNY is now the global bellwether (again)
The panic will subside if the PBoC manages to defend the 7.30 handle in USDCNY. Could we reach “peak China panic” during today’s trading? We look forward to it alongside the FOMC meeting minutes in our morning report.
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Inflation Watch – Here’s why EU inflation will get back to target faster than US inflation
In this short note we go through why EU inflation is likely to get back to target faster than US inflation due to technical differences in the way of measuring inflation.
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11 charts on US CPI: Hotter headline and weaker core? An odd steepener cocktail
Here is our chart-deck on the US CPI report on Thursday. A soft core paired with a hotter headline? It looks like an odd- and rare steepener cocktail to us.
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Something for your Espresso: The confusing flexibility of the BoJ
A weaker JPY paired with higher JGB yields and a steeper curve. The JPY markets are sending mixed signals but maybe the whole purpose of the BoJ policy was to leave markets uncertain on the direction of travel.
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Something for your Espresso: Producer deflation and a cyclical rebound
Most recent trends point to a combo of outright deflation in the producer leg paired with short-term cyclical optimism. It almost sounds too good to be true given what we have been through. Hello, Goldilocks (for the time being).
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5 Things We Watch – PMIs, FX, Japan, Brazil, Inflation
This week our primary focus is the current business cycle, where we try to figure out which stage we are in, and what outlook different asset classes are pricing in. Today’s edition of ‘5 Things We Watch’ is no exception.
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Japan Watch – Buy the JPY? >150 more likely than <130 in USDJPY
With the recent move in swap rates and the JPY, we have once again looked into Japan to find out when BoJ will do something about their policy and if the Yen is a viable option for your portfolio. JPY looks more like a sell than like a buy here.
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Brief Inflation Watch: Smack dab at our soft forecast!
Just in: A brief account of today’s US CPI report.
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Something for your Espresso: Ooooops, there goes the service sector
The Philly Fed NBOS survey revealed a weakening service sector for the first time in this cycle. Is this the final shoe to drop? The UK meanwhile remains the laggard on inflation.
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Something for your Espresso: CPI data better DELIVER!
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.
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Something for your Espresso: CPI data better DELIVER!
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.
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Out of the Box #5 – Will the hiring cycle end due to falling inflation?
The hiring cycle has thrived due to a substantial depletion of the inflation-adjusted price of labour in 2021-2022, which may lead to a firing spree once inflation starts to come down and real wages start to go up. Will the labor market finally cave in due to falling inflation?
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Inflation Watch: A short-lived acquaintance, or in the Euro Zone to stay?
The term inflation has merged from academia to layman’s vocabulary. The question is whether it’s time to shelf the term or if it remains as relevant as ever. We look at forward-looking indicators and try to pass judgment – this time on Europe.
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Something for your Espresso: Don’t count on Britain leading the neighbours into the abyss
After a shocking CPI report from the UK, one may ponder whether British exceptionalism carries the day or whether we have more price pain in store for the continent. We hold our ground and remain in the “CPI is deaccelerating fast” camp
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Inflation Watch: Any last gasping from the “Inflation zombie” in the cards?
This week’s CPI report aligned seamlessly with our expectations, affirming the anticipated cycle-pattern. Naturally, this begs the question – what lies ahead, and what could break our view? Some additional thoughts for the weekend.
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Money Watch: Have people forgotten that everything is about money? Also the SVB case..
Most people tend to agree that the amount of money in an economy affects economic conditions. More money makes consumers buy more goods and services, and the excess demand leads to increasing prices.. but what happens when we destroy USDs as we currently do? More SVB cases show up!
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CHINA WEEK: What does new 2023 growth targets signal about Xi’s priorities
China’s top legislature, the National People’s Congress (NPC), opened its annual meeting yesterday. The main highlight was the presentation of the new work report by outgoing Premier Li Keqiang which sets the 2023 fiscal targets for the Chinese economy. Later this week, Xi Jinping is expected to further consolidate his power with several high-profile appointments including the new Premier, vice-premiers, and the new governor of the central bank.
Europe Wants To Get Paid – 5 Feuds To Look Out For
A gap has opened between European wages and prices over the past 12 months. This naturally leads to heightened expectation for collective bargaining agreements across the continent. We point you to the most important battlegrounds for 2023
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Good Morning, America: Not a disinflationary biggie
The disinflationary vibes are not tattooed all over this inflation report despite a cooling yearly inflation pace for the seventh consecutive month. BUT.. do note that Powells target variable keeps cooling!
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Something for your Espresso: Ueda- and inflation day!
Will the new BoJ governor rock the boat? Quotes from a source close to Amamiya would suggest as much, while we look forward to the US CPI report today.
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The Dollar O’ Meter #1 – 5 ways to gauge the USD outlook
The importance of the dollar and its influence on almost any given asset will come to nobody’s surprise, especially after its tear in 2022, which was like a wrecking ball, wreaking havoc in and around the financial system. Therefore we are launching the Dollar O’ Meter to track the USD versus peers.
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US Inflation Watch – A consensus print, but decently dovish beneath the surface
Inflation printed right on consensus despite another jump in shelter costs. Several goods categories cooled quicker than anticipated by many. This is net/net a dovish report after all. USD remains a sell.
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Inflation Watch – Further downside to US CPI consensus
It is now that time of month again. As economists anxiously await the coming CPI-print, we will in this ‘preview’ turn to our charts in an effort to align expectations according to select indicators.
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Steno Signals #28 – 2 reasons to begin 2023 with a bit of equity exposure
Right about everyone and their mother expects a new low in equities in Q1/Q2-2023 because of earnings disappointments. Here are two reasons to remain decently upbeat.
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Steno Signals #26 – Stealth QE through the back door?
Is it really a possible scenario that the Fed will do stealth-QE by summer 2023? And are equities still a sell based on USD liquidity plumbing? Get the answers here!
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