It’s been a muddy July, not only weather-wise, but also in markets. The signs of an equity rotation, the turning tide in USDJPY, the metals volatility & softer rates probably align. Maybe the stars are finally gearing up for a risk-friendly 4-6 weeks upcoming?
Recession chasing has become an obsession for many, but how can we use the current bankruptcy trend to trade the macro cycle in a clever way? Here are the findings from our bankruptcy studies.
The recession narrative has returned after a series of weak PMIs. Betting against the returning recession hysteria has been a profitable strategy since April-2020, but will it be so again this time? Hallelujah!
Recession chasing is getting increasingly weak as an investment strategy with fewer and fewer recessions around. Is the business cycle still alive and is it big enough to matter for markets?
The US economy is accelerating, and various indicators have clearly bottomed out already. The question is if prices will accelerate alongside the rebound in activity and whether the rates market is still wrong.
An extraordinary NFP report spooked markets on Friday, but is the report full of fake news? The NFP admittedly rhymes with the big picture observations. The US economy is accelerating, while Europe is stuck in the abyss.
This week’s 5 things we watch with hot topics. This week we’ll cover US recession talks and financial conditions. We’ll also hone in on both US and European inflation and finally talk rates expectations.
We still struggle with the improving economic consensus for 2024 as we consider it to be out of whack with the credit impulse. Can the economy grow without credit or is the 2024 hope-timism a false flag?
Powell and the Fed aim for the soft landing despite all the Volcker-nonsense of 2022/2023. Will inflation ever drop to 2% if the animal spirits are unleashed again? Tails look fat for 2024.
Nothing comes for free, and a bull steepening of the yield curve is typically not great for risk assets. Will this time be different? Markets better hope so.
The “soft landing” narrative has gained material momentum in the mainstream coverage ahead of 2024, which is a clear risk to the outlook. It always looks like a soft landing until the nosedive.
Sudden sharp moves against the USD after Powell let go of the monetary steering wheel. Will the Fed take back control or has the USD already peaked? This is the key question in global macro before New Years.
The US fiscal trajectory is unsustainable and will require resolution, but does it inevitably entail excessively high-interest rates for “longer”? We have our doubts.
The Fed introduced a new feedback loop, which is likely to limit the scope of this bear market rally. Remember that Q4 data usually looks really bad in an inflationary environment, while Q1 is the quarter of “inflation math”.
The developments in the Middle East have refueled the recession fears and markets are getting concerned due to the spike in term premiums. Is this a first taste of the recession sell-off coming? Here is how we deal with it.
Inflation is likely going to drop just below 2% in Europe/Germany, but there are signs of bottoming price pressures in the IFO Survey, while the Chemicals sector keeps improving orders/inventory ratios.
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?
There has been a load of discussions on the timing of the recession, but just as the consensus narrative is shifting towards a soft landing scenario, the recession risk is probably actually on the rise. Here is why.
We have looked at historical macro data to assess how assets perform around and in a recession, and if we are actually heading towards one.
The EIA report shocked oil and gasoline markets and the big question is whether the weak demand is a harbinger for the broader US economy.
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.
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.
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!
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.
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 “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.
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..
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…
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?
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.