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?
EM BY EM #17 China: Real Estate Complex and the “phony” stimulus
In 2021, I took a bearish position in the Chinese real estate market. However, the scale of the repercussions stemming from the ongoing deleveraging process in Chinese real estate has raised our concerns. Despite this, we believe that the CCP will likely need to intervene in the near term to address the situation
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EM BY EM #15 – Ecuador General Election as a catalyst?
Plenty of bets in LatAm carry trades unwound this week on the back of BoJ YCC tweak. But perhaps the LatAmsphere has a USD winner short term?
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Credit Watch: If you SLOOS you lose – the 5 best charts from the SLOOS survey
The quarterly senior loan officer survey is out and there is both good and bad news. Supply of credit keeps worsening, while the demand for credit shows (very) early signs of life. Let’s look at the five best charts from the survey!
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5 Things We Watch – Fed, ECB, BoJ, RBA & Credit
It’s central bank week again, and that of course means that we provide you with all you need to know ahead of the big meetings. Recent inflation numbers have pause written all over it, but will central bankers keep their hawkish tone?
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Credit Watch: The credit contraction has arrived… 5 charts from the ECB credit survey
The credit contraction is already a reality in Europe and the Q3 ECB Credit Survey confirmed that a contraction is the most likely scenario for H2-2023. There are early signs of improvement, which means that we may get an outright rebound into 2024.
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5 Things We Watch – The Equity Rally, the Chinese consumption problem, Consumers vs Corporates, 20/21 reversed?, MBS and the Fed
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’.
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Credit Watch – What’s going on with credit spreads?
While we have been vocal about an upcoming credit crunch, credit spreads are not moving whatsoever. Are the markets wrong, and what’s keeping credit spreads low?
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Portfolio Watch #2 FOMO remains the game in town
Our portfolio is green and we are content with the returns despite a few bad apples in the mix. The market environment is uncertain, and we anticipate increased selling pressure is imminent once the tightening gets going. Risk management and diversification are crucial in this setup. See our weekly performance evaluation for here details
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European Deposits: US turmoil on tour?
Several US regional banks fell victim to the waning confidence from depositors who ultimately pulled the plug. Are European banks really safeguarded by better legislation, or are we taking comfort in a false sense of security?
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5 Things We Watch: Inflation, Real Estate, Banking Crisis, Credit and Euro Weakness
Wednesday is back, and so is the weekly post where we highlight what we are currently spending our time looking at. Don’t miss out on the crucial tendencies in global macro presented in this shorter piece!
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Inflation chart book: Not as soft as we’d like but gone in 6 months
There are reasons to believe that the April inflation report will not be as soft as we’d like, but our chart book of leading indicators continues to hint at a sharp disinflation over the next 3-5 months.
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Something for your Espresso: Peak EUR optimism and credit contraction confirmed?
Several indicators are starting to roll over in Europe, which may be at odds at with the current positioning in markets. Meanwhile, the loan officer survey continued to tighten, but not to alarming levels. The demand side of the credit equation is doing much worse than the supply side.
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Something for your Espresso: Lagarde the flip-flopper
No one really knows what the ECB intends to do after the flip-flopping yesterday, but even in Europe it is probably safe to say that we are swiftly edging closer to the peak of this hiking cycle. Meanwhile, evidence gathers in USD markets that the Fed should move with a cut next.
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Money Watch: Your favorite liquidity proxy is about to become drier than a Martini
The banking-storm has calmed down a bit and the small banks’ share of total deposits has regained some territory in recent weeks. However, if fixed income losses continue to weigh down on balance sheets, then we cannot rule out more stories of banks in trouble. For now though, it would seem the FED intervention has idled the turmoil.
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CRE Watch: Illiquid trouble stuck on the books
As the banking stress has waned in news value, commercial real estate has taken over the baton. In this article, we’ll try and sort fact from fiction and wisen up on what is really moving beneath the surface.
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Japan Watch: The Flight Back Home
Japan remains a MUST watch as a risk taker in the West. With the potential scrapping of the YCC policy and the recent recall of capital to domestic markets, could this be a potential time bomb for Western markets? Here is how we monitor the situation.
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5 Things We Watch: The BTFP, US and EU Deposit Flights, Credit Tightening, and The FFR
The recent turbulence in the banking system has been for the history books. It may have cost the lives of some banks on both sides of the pond, but has the situation finally dialed down? We turn to our timeliest gauges on the deposit flight crisis and weigh up how to position for it.
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Steno Editorial: Is China your only feasible savior in 2023?
China is rebounding from a Lehman like credit event in 2022, which makes Chinese assets the cheapest on earth. Buying Chinese assets or assets outside of China with a link to China may prove to be your portfolio liberator in an otherwise tricky road ahead in 2023.
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China Week: The reopening play vol 2
The abiding tale of a Chinese reopening has been about as labile as pundits’ conviction of a soft landing. In fact the two may very well be tightly correlated. Now, it seems data has finally arrived to firmly lay to rest the debate whether a reopening would show. What better time then to unwrap and examine the implications?
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