Another day, another direction for rates. Banks are driving the show and the underlying question remains. Is this a true banking crisis or is it a tempest in a teapot? As true macro investors, we prefer to take a step back from the daily noise and watch the underlying...
Something for your Espresso: Will the cyclical rebound be confirmed?
Will the cyclical upswing be confirmed in European PMIs and German IFO numbers? Markets clearly lean that way, while bets are being removed on a more hawkish BoJ.
Something for your Espresso: Inflation did drop in Germany
German inflation surprised on the low side of expectations and meanwhile Villeroy from the ECB also confidently talks about waning inflation. The bar remains high for a further hawkish repricing of central banks.
The Energy Cable #5: The energy market link to the Chinese reopening and the Iranian attacks
Is the Chinese reopening a true game-changer and how will the attacks in Iran over the weekend alter the geopolitical risk picture for energy markets? We provide our takes alongside updated price signals on oil and natural gas. “We are happy when people/things conform and unhappy when they don’t. People and events don’t disappoint us, our models of reality do. It is my model of reality that determines my happiness or disappointments.” – Stefan Zweig 3Fourteen Research: The true story on the Chinese reopening The China reopening story has fueled oil’s 2023 rise. Read the last sentence carefully. I specifically said the China reopening “story.” Said differently, it has not been the reopening of China that has propelled oil to this point. Rather, it has been the “story” of the reopening. Three weeks ago, we dug into oil’s physical market. Back then, we argued that oil could not divorce from its physical reality for very long. With that said, over short time horizons, oil regularly divorces from the physical market. Ultimately, to make an educated guess of where oil is going, you must understand both the physical and paper markets. Today, we take a look at the paper market and how we incorporate it into the 3Fourteen Core Crude Oil Model. At present, the Model remains Neutral (components below). The physical and technical components are bullish. The inventory component is bearish. And, the positioning (i.e. paper or futures) component is neutral. We account for the paper market in the “Positioning” […]
Europolitics Watch #3 – A Continued European Surge?
European equities have seen an incredible start to 2023 on top of strong performance in late 2022. But European manufacturing and tech finds itself under pressure from massive public investments in both the US and China. What to make of the EU’s response and how is the outlook for Europe?
Steno Signals #13 – No, Germany is probably not running out of gas
The media is full of doom and gloom around Europe, and even though the situation is admittedly bad, I tend to think that the likely outcome is less bad than feared by many. Here is why!