Powell will allow things to run hot even if inflation is not fading as fast as hoped for. Raising inflation forecasts and keeping three cuts in the projections at the same is REFLATIONARY.
We have closed a position. Read which and P&L below
Welcome to another edition of 5 things we watch where we take your through the 5 most important things that we have on the radar.
We have closed a position. Read which and P&L below
We suspect that the market will care more about QT tapering than the exact timing of the first rate cut from the Fed, allowing for a decently dovish take-away from the meeting today.
Commodities have broken out of recent price ranges left, right and center over the past 1-2 weeks and we have timed the entries well. Read along to find our top-picks in Commodity space right now.
With a break-out from ranges in Copper, Silver and Oil, we look for clues as to whether the Chinese buying is behind the sudden emerging optimism in the commodity space.
The US CPI report came in hotter than expected yesterday, and today’s news on Japanese wage negotiations give the BoJ another reason to tweak the policy rate. Read about the 5 things that we watch this week here.
Long term inflation expectations are trading around 2.25-2.5 percent and yet there is a sentiment among the Average Joe that the cost of living is still high. It’s Vibeflation. So how to deal with this? Well, just cut rates!
The Chinese moves toward larger fiscal deficits may be helpful for the energy- and industrial metal cases, but we still lack confirmation from the actual manufacturing cycle globally. Could the commodity complex be the macro case of 2024?
Shipping stocks have not rallied lately despite the optimism in risk markets. Is a peace deal in Gaza a good sign for shipping companies? And how does it impact commodity markets? The latest Shanghai container output data looks bullish! Find the answers here.
Focus on OPEC’s continued production cuts into a story of bouncing growth which sets up a tasty story for crude and maybe also natural gas! Read why here!
One of our high conviction macro bets for this year is the major divergence between US and Euro inflation
Nat Gas levels are far below sector break-evens, making it a tug of war between short-sellers (mainly CTAs) and producers. Nat Gas looks like a bargain, but let’s see whether the chicken comes home to roost.
The ECB is scared of acting ahead of the Fed, why a substantial dovish surprise is needed in February HICP to bring about a decent probability of spring action from the ECB. Find our updated now-casts here.
***EU Finance Chiefs Seek More Defense Funding, But Question How** While policy makers in Europe are worried about financing in terms of fighting Russian aggression maybe they should start to look at production capacity as well. The backlogs ratio in German weapons...
Is Nat Gas suddenly the cheapest macro asset on earth? Natural Gas prices are through the floor, which dynamics have improved in the oil space. Let’s have a look at it.
Container rates have peaked for now, but without progress in the Red Sea, there is a risk of a return of higher rates by the spring-time. The damage for US inflation has likely already been done, but we see signs of exhaustion in the long energy bet.
Last week we were close to writing our obituary on our crude oil long position and this week we are almost back in green. The last few weeks in crude have surely been something!
Freight rates have started to level off, but remember that this is the “soft season” for shipping volumes. From March and onwards, the shipping volumes will accelerate sharply.
Crude oil above USD 80 lasted all but a week and we are now trading in the January range again. Here is our take along with some oil-related news from the week. The structural oil bet is still improving beneath the hood.
The weekly freight rate print just landed with the first negative weekly change in almost two months. Let’s delve into the data.
The Red Sea crisis contagion is spreading to the energy space. With signs of stress emerging in Energy Markets, we have entered a timely long as positioning remains light despite the ongoing Red Sea debacles.
The potential for a soft EUR-flation week paired with spill-overs in the Red Sea leads us to implement a few new trades in the portfolio.
If it quacks and walks like a duck, it probably is a duck. The same can be said about the disinflationary wave in Europe, which got more confirmation with today’s full Ifo report.
Over the last month, we have covered the shipping troubles in the Red Sea along with the potential consequences for markets. As we are of the opinion that this topic is very important we thought that we would post a piece recapping where we are and what to expect going forward.
This week in 5 Things We Watch we are honing in on US vs EUR rates/inflation, China stimulus, Euro PMIs, Japanese equities and the Suez troubles.
The situation in the Red Sea is worsening and it wouldn’t surprise us to see spill-overs to the energy space by now. Here is an update on the situation!
The shipping situation keeps worsening with some early spill-overs to the energy space. It remains to be seen whether tankers will be redirected to the extent seen with containers, but the risk remains elevated.
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.