Ulrik Simmelholt

We also look at the long end of the US yield curve and European nat gas markets.

We are still some distance from Powell acknowledging that the balance sheet approach in the U.S. will need to change to maintain sufficiently loose conditions. Meanwhile, China remains hesitant, and the absence of new stimulus is likely to weigh on global growth, which could, in turn, lead to lower bond yields.

Good morning from Copenhagen. As we digest the official announcement of Trump’s second term, let’s dig into market moves and what is on today’s menu.

Payrolls will print soft today due to strikes and weather related events. We need a number below 50k to get the bid back in fixed income, but it’s not ruled out that we get actually such. The base-case is better than that though.

Trump roaring in polls spilling over into rates

Growth in the U.S. is being repriced higher and higher. The anticipated slowdown has once again vanished into thin air, much like what we saw in late 2023 and early 2024.

With crude oil selling off due to reports that the IDF is allegedly not targeting Iranian oil and concerns over China’s slowing growth, we are seeing downward pressure on inflation.

No 50 bps cut on the back of today’s Swedish inflation print and Chinese assets waking up to reality. As we have written throughout, we think this Chinese rally will end in tears.

Geopolitical risk has returned to the crude oil market, but it remains muted, as the macroeconomic outlook is much more negative than it was six months ago, when Iran last launched missiles toward Israel.