Markets have started to factor in good news as bullish, which all of a sudden makes market pricing (on equities mostly) indicative of economic expectations once again. Are there still opportunities in the cyclical momentum?
The Chinese Stimulus will likely prove to be false flag and Yellen & Powell looks to have killed the USD streak. Read below for our thoughts on it and how we will likely play it
There is no doubt left that the ECB has hiked for the last time, but the question is whether the doves can get the upper hand in the committee. Focus now shifts to the most important BoJ meeting in many years.
BoJ likely intervened yesterday for the first time in a year, the American labor market looks stronger than feared and PBoC is looking to cope with domestic capital flights. Read more in this week’s edition of ‘5 Things We Watch’.
Happy Wednesday, and welcome back to our weekly edition of 5 Things We Watch, where we take you through the 5 things we are currently keeping an eye on in the global macro landscape.
The Inflation Reduction Act (IRA) intended to deliver both an expedited ‘green’ transition as well as a +$300 bn deficit reduction. But, what are the measurable effects circa a year later?
The intricacies of the US labor market make it challenging to derive coherent insights. To shed some light on our perspective, here are three charts that aid in elucidating our view
With more and more (admittedly early) signs of a restocking phase ahead in Manufacturing, we shift our focus to Services this week.
There are admittedly early signs that the Manufacturing sector rebounds in the US with the Dallas Fed PMI confirming the stabilization narrative. We tend to agree on the direction of travel in Manufacturing, but here is everything you need to watch outside of that sector.
The spike in Nat Gas prices looks like a dead-cat-bounce for now, but the recent retracement may hide the underlying improving price fundamentals for the energy space. Orders to inventories are improving, even in the most bombed out sectors in Germany.
All eyes on US CPI and commodity markets this week as the USD curve steepener is the main driver of cross asset trends. Will hot headline- and mild core inflation strengthen the case for curve steepeners?
If the service industry starts to fade relative to the Manufacturing sector, it may be exactly what central banks use as the excuse to pause (and eventually pivot) but markets are much more sensitive to Manufacturing PMIs.
Commodities gain even on days where they face obstacles such as a stronger USD and luke-warm manufacturing data. This is a strong signal that supply is back in the driver’s seat of commodity markets after a few quarters of demand driven price action.
Earlier this week we identified possible curtain-raisers on near-term developments in US manufacturing, and with parts of the Philly Fed Survey backing our findings, what can be expected for equities?
The economic activity in goods manufacturing has been contracting since October 2022 according to the ISM reports, but contrary to the latest figure (46) select indicators hint of a possible cyclical rebound.
The USD has weakened materially over the past weeks, which could be an early harbinger of an improving growth cycle. If cyclical growth is indeed rebounding, right about everyone will be wrongfooted. Here is how we position for it..
Each month we assess the macro environment based on liquidity, inflation and growth models. Our models were right that inflation, growth and liquidity would all drop in June, but for July we see a possible slight uptick in growth, while inflation and liquidity will continue down.
As long as “nothing happens” it is bond bearish as it alleviates fears of an immediate recession. Recent data is not bad enough to prompt further bond buying as of now.
We have talked over and over about supply during the past 12 months, but it is now time to talk about demand. Go short the business cycle and buy USD.
Inflation runs markets currently as it seems as if growth has become irrelevant for policy makers, but will such a narrative pass a reality test? I doubt it. Growth will re-enter the limelight soon!