The US calendar is light in the week ahead, meaning that European central banks take center stage. Will high-beta assets continue to soar on hopes (expectations) of cuts?
Something for your Espresso: The inflation target is coming into sight
Takata from the BoJ has truly restarted speculations in action from the BoJ already in April as he labeled the inflation target as “coming into sight”. Meanwhile, the EUR-flation target may be coming into sight from the other direction despite lukewarm releases today.
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Something for your Espresso: Make or break inflation week!
We need a very soft inflation report from the Euro area to bring back hopes of ECB spring action. We lean dovish, but dovish enough?
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5 Things We Watch: Iran, China, Crypto, Inflation and the Fed
Macro is on the move and we have diverging trends in inflation. Find our brief overview of the five themes that move markets the most this week in global macro.
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Something for your Espresso: No issuance bomb from Yellen
The risk of another supply-driven sell-off in USTs has diminished as the fiscal trajectory in the US is improving slightly due to an improving income side. Meanwhile, we have a big day ahead for the Euro area.
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Steno Signals #83 – A striking divergence between EUR and USD money trends
It remains an overwhelming consensus that a strong cutting cycle is in the cards, but there is growing uncertainty around the inflation outlook that is yet to be reflected in market pricing. Money trends are not tight enough.
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Something for your Espresso: EUR-flation to print below consensus again
Inflation evidence keeps coming in soft in Europe and early evidence from Germany and France support another dovish surprise. Meanwhile, rates are coming down again.
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Out of the Box #25: Europe. From Technical recession to an real one?
The ECB Hawks have taken significant steps towards a forthcoming policy pivot. But what if they remain on the backfoot?
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Something for your Espresso: Running on fumes?
The strong US data seasonality into year end could wreak havoc with the current early Santa Rally in cyclicals. We are on high alert for a hawkish reaction function in December.
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EUROPOLITICS WATCH: Opposition victory in Poland opens door for Ukraine in the EU?
On Wednesday, the European commission made a formal recommendation to start EU membership negotiations with Ukraine and Moldova. Now Ukraine must work to secure the endorsements of member states – not least Poland, who’s incoming government will be decisive for Ukraine’s future with the Union.
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Steno Signals #69 – The recession playbook
Recession models are mostly based on manufacturing, which currently rebounds leading to the conclusion that the recession risk recedes? But are actual recession risks rather on the rise?
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Macro Nugget: The Eurozone horserace
The Eurozone bear case seems to finally be playing out but what is the current state in Europe? Bleak and divided are two words that spring to mind.
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Steno Signals #63: STAGFLATION in Europe and payroll recession in the US?
Sticky inflation, renewed issues with high energy costs and a light recession in the making already. Europe screams stagflation and even the ECB admits to it. Meanwhile, we are edging closer to the actual payroll recession in the US.
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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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Steno Signals #55 – Why surveys struggle to get anything right in this environment
Expectations are real, while the reality is nominal! Soft data keeps getting the reality wrong, which is probably a phenomenon that relates to the extreme spread between nominal- and real figures. Will this issue keep wrong-footing everyone?
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Something for your Espresso: Inflation, Sweden and everything else..
European inflation numbers have already started to come in.. Will June look as soft as May? Probably not.. But inflation numbers are coming down, slowly but surely in Europe.
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EUR Liquidity Watch – The ECB will have to punish governments more..
The ECB tries to incentivize governments to withdraw their funds from the ECB to mitigate a complete catastrophe when the QT race really begins at double speed from July and onwards. Will they succeed, and what will the ramifications be? Find out here.
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Something for your Espresso: No Russian spill-overs (yet) ahead of EUR-flation week
Benign opening after a volatile weekend with no signs of an increased risk premium in energy/grain markets, while bonds open bid. The inflation numbers will dictate the trends this week.
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Steno Signals #54 – Why Europe remains a wrong consensus call
Geopolitics remain tricky to trade and we don’t see any strong risk/reward trades on the back of the turbulence in Russia over the weekend. Meanwhile, Europe remains an odd consensus bet, while UK inflation and US housing markets risk wrongfooting everyone.
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Something for your Espresso: PPIs speak loudly
The Canadian PPI continued its landslide yesterday and it makes you question whether BoC was too quick re-accelerating the hiking cycle. Meanwhile, markets keep coping with USD issuance.
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Out of the Box #6: The Europeanization of the US banking system is on its way!
A WSJ article suggested that US banks will be required to hold up to 20% more capital should the Basel rules be fully implemented by 2025. The Fed is likely to present a new direction for regulation by the end of this month according to sources. How severe is this? Here are the numbers..
EM by EM #5 Stairs up and elevator down in China?
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
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China Watch – How’s it going with that reopening?
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
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Out of the box #2: Back to austerity. Euro sovereign crisis vol 2?
The hardships brought about by Covid and the Ukraine war initially fostered political unity across Europe. In this article however, I will argue that fragmentation may soon regain prominence as liquidity diminishes, labor markets weaken, and governments face the need to implement tighter fiscal policies. These circumstances create a fertile ground for the resurgence of the zero-sum debtor/creditor conflict that characterized the 2010s.
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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: EUR-phoria – it’s going up, up, up, up, up!
Another strong IFO report from Germany on the surface of it, but is the European economy close to rolling over from a momentum perspective? Let’s have a look at the details.
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Something for the Espresso: PMIs to sum up the week
After a job claims report that was only slightly weaker than the consensus yesterday, our focus now shifts to the upcoming release of the PMI reports toda
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The Energy Cable #9: Putting inventories into perspective
Greetings from Copenhagen everybody! It is Tuesday and that means another energy cable. Inventories are building, while jet fuel demand remains subdued compared to projections. In this update from 3Fourteen and Steno Research we take you through everything you need to know about current energy market trends and how to trade them.
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Inflation Watch: 7 charts on EUR inflation after smoking hot prints from Spain and France
Service inflation is feeding through to Europe in size now, which makes the case for further ECB tightening compelling. Here are 7 charts on EUR inflation ahead of the Euro-zone print on Thursday and what it means for markets
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The Energy Cable #6 Bearish inventories across both oil and natural gas and waiting for the Chinese reopening to show up!
Bearish inventories across both oil and natural gas and waiting for the Chinese reopening to show up! Here is the latest “Energy Cable” update on Natural Gas, Oil – and the overall energy complex with price signals and model based predictions. The only publication to cover this sector across geographies and asset classes. Enjoy!
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