How Germanys constitutional debt brake could hinder the green transition of Europe and leave Germany at the bottom of the leaderboard in the race towards fiscal deficits.
U.S Debt Watch: Do we need this conversation again?
Pheew… close call! The bipartisan debt ceiling bill saved the U.S from economic disarray. Now we can all take a well-deserved summer holiday and bask in the sunshine of the long-term financial stability ensured by responsible lawmakers who have no interest in short-term solutions nor gains. But no – not so fast! We still have a looming government shutdown to attend to.
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Steno Signals #51 – Bye bye inflation, hello lay-offs? Here is what to trade..
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!
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U.S Debt Countdown: Will A Deal Go Through Today?
Does Biden and McCarthy have the necessary votes to suspend the debt ceiling and save the U.S from default?
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Something for your Espresso: Hide and seek with Biden
Biden is allegedly planning to leave Washington for the Memorial weekend, which underpins the probability of our base-case of a shutdown and a prolonged debt ceiling stand-off. The TGA is now BELOW typical shutdown levels.
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Something for your Espresso: Here comes the shutdown..
Remember that government shutdowns can be sanctioned well ahead of the TGA running empty. McCarthy has continuously said that a deal was needed this week at the latest.
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5 Things We Watch: Italy, Chinese reopening, Debt Ceiling, Excess Savings and FX positioning
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.
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Something for your Espresso: “Only one week left”
Kevin McCarthy has initiated the blame game in the debt ceiling debacle to try and increase Joe Bidens incentives to strike a deal ahead of a partial shutdown. Our game-theoretical analysis has long put the partial shutdown as the base case as both Joe Biden and the right wing of the Republicans have limited incentives to strike a deal ahead of time.
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Steno Signals #48 – Markets vastly underestimate the impact on USD funding from the debt ceiling
The USD debt ceiling is a returning topic and it’s typically not overly important for markets, but this time is likely to be different. The repercussions for USD funding markets may be material and in sharp contrast to consensus expectations the USD may stage the biggest comeback since Lazarus.
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US Debt Countdown – The X-over data is APPROACHING! When will USD funding markets be impacted?
Tik-tok (do we even dare writing that now-a-days). The x-over date is approaching and in a continued bank failure scenario, the x-over date may be reached already during May. The USD funding market is about to get interesting. Here is why!
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5 Things We Watch: Banks, Liquidity, Debt Ceiling, Euro Area Positivity and USD Strength
Midweek has arrived and that calls for a rundown of the five things we watch the closest. As is the custom every Wednesday, we will take you through these most important themes (and charts) in macro and summarize how we interpret them.
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Out of the box #1: The “mystery” of the growing US deficit and why it is likely going to lead to lower interest rates
The US budget deficit is a whooping 7.5% of GDP worse than what it should be given the healthy employment and growth numbers of the economy. Is the Inflation Reduction Act running wild or what’s going on?
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Something for your Espresso: Debt ceiling deal upcoming?
McCarthy secured a symbolic win in the House, which arguably increases his bargaining power against the Democrats. The question is whether this increases or decreases the possibility of a debt ceiling deal short-term? Meanwhile, Deutsche Banks Q1 report poured oil on troubled waters.
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