Have markets and REITs come to terms with higher interest rates, and should we really care? We’ve looked to see if a collapse was brewing – in the US or in Europe.
Something for your Espresso: Bye bye Oprahnomics?
The IRA has saved the US from entering a recession alongside peers this year. If the appropriations negotiations this week lead to a bye bye to Oprahnomics, then we consider a recession a done deal for 2024. Buckle up!
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US Economy Watch: The Recession That Never Came… Or?
Inflation in the word recession? Some have stubbornly called for a doomslike recession while others see the economy firing on all cylinders. Our data-based weigh in on the topic.
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Something for your Espresso: Everything you better watch while ISM Manufacturing rebounds
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.
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Steno Signals #62 – The recession is called off (by consensus)
The “no-landing” camp is getting increasingly crowded and even if we do not rule such a scenario out, we find that the probability of outcomes is starting to favor a more conservative approach to risk taking.
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Steno Signals #57 – What on earth is going on with the USD?
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..
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Steno Signals #56 – The business cycle that everyone misunderstood! Here is why..
Positioning and price patterns reveal that the pain trade is higher rates- and higher equities, while the recession is slowly but surely being called off by the consensus. Here are four reasons why everyone misunderstood the recession risk and why it is still alive…
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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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Steno Signals #50 – Singing Hallelujah while sleeping at the wheel!
AI is mana sent from heaven, while McCarthy and Biden have allegedly agreed on a debt ceiling deal. We continue to favor positions with a positive beta to slowing inflation despite the recent concerns around stickier for longer.
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Positioning Watch: Is the bond market plain wrong?
While commodities traders have positioned themselves for the inevitable recession, some equities and FX are living their own lives, celebrating the recent debt ceiling optimism and better than expected GDP numbers. Find out if you have chosen the correct bets in this week’s edition.
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Something for your Espresso: Germany is in a recession
IFO seems to have peaked, and Germany likely already is in some sort of recession. Will the ECB care? And will EUR + DAX bulls care? FOMC Minutes reveal increasing divergence of views within the board.
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US Equity Watch: A rotations game
Areas of the economy are showing increasingly worrying tendencies, and some are outright caving in. Ahead of today’s FOMC meeting, we decided to take a closer look at the state of US equities and whether the defensive rotation was due – or if one were better off leaving the table entirely…
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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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Steno Signals #46 – Liquidity is drying up fast! Sell in May and go away?
We have been bullish on equities through the year but now see increasing signs warranting a defensive shift in positioning. Liquidity is drying up both in Europe and the US, and BoJ has effectively made further liquidity adding interventions unnecessary. China may be the only place on earth with positive liquidity trends.
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Steno Signals #45 – 4 ways consensus could be wrongfooted
Here is a list of four concrete ways that consensus could be wrongfooted based on my discussions and findings after having travelled Asian institutions last week.
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Labor Market Watch: The final nail in the Coffin?
The unwavering strength of the labor market has backstopped the probability of a classic recession, but is data now finally beginning to show what we have all predicted?
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Steno Signals #43 – Slow walking into a recessionary credit crunch
Evidence is gathering that the SVB-fueled banking stress indeed will turn into a recession, but instead of a fast and rapid liquidity driven recession, we are rather slow-walking into a credit crunch over summer.
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5 Things We Watch: Five Aspects Surrounding the Banking Turmoil
This week really has been one for the books. On Friday, markets sounded the alarm as we experienced the second largest bank-failure in US history. Naturally, this behemoth event swept magazine covers and blew up our phones and inboxes leaving not much room for other things to watch – hence this peculiar edition of the recurring ‘5 Things We Watch’, where all five things relate to the banking frenzy.
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Steno Signals #31 – The recession that EVERYONE agrees upon
Everyone agrees that a recession will hit this year, but will the Chinese reopening wreak havoc with the very uniform positioning across assets? Our flagship editorial Steno Signals is out every Sunday at 14 CET / 08 ET
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5 things we watch! China, inflation, debt ceiling, liquidity, and recession
Every Wednesday, our Head of Research Andreas Steno, goes through the 5 most important themes/charts in global macro right now and how we assess them. Enjoy!
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Steno Signals 11 – Inflationistas vs Recessionistas
Is this a return to a 70s-like fight between inflation and recession? The energy supply scarcity is likely to bring about yuge business cycle volatility in coming years until the situation is settled.
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