Steno Signals is our weekly editorial on everything macro. The byline of the editorial is Andreas Steno Larsen, former chief strategist at Nordea Bank and CEO of Steno Research.
Given the lack of an imminent economic crash risk, bond bears have been back in the driver’s seat. No news is bond bearish news, which in turn is likely to exacerbate the already worsening root cause of the deposit crisis. We are on high alert for the ramifications of the price action in the USD.
The USD debt ceiling is a returning topic and it’s typically not overly important for markets, but this time is likely to be different. The repercussions for USD funding markets may be material and in sharp contrast to consensus expectations the USD may stage the biggest comeback since Lazarus.
How do we approach the most anticipated recession in newer history when the labor market keeps holding up? And how severe is the banking crisis in a historical context? We aim at providing you with the answers here.
All eyes are on the Fed and ECB in the coming days! We have got you covered with our LIVEBLOG throughout Wednesday and Thursday.
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.
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.
The de-dollarization chatter is back after the IMF COFER data showed a new drop in the relative size of USD FX reserves in Q4-2022. Currently, everyone agrees that the USD will weaken from here, which is when you need to become worried.
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.
Back after a great week in The Big Apple. Investors have four major themes on their radar as I see it. Today we digest those themes and asses how to trade them! Enjoy
We have something brand new for you!
Deustche Bank is selling off rapidly without an evident trigger event. What is going on? Is the crisis spreading to Europe and will it turn into a credit crisis? We look at the situation here and find more and more reasons to be worried.
When Fed Chair Powell goes on stage tonight we of course stay on the line for live coverage of the interest rate decision and the following speech. Get prepared and follow the meeting with us, as well as getting the best takeaways here on our live blog!
The banking crisis continues and we’re covering it live here on StenoResearch.com! Bookmark this page and we’ll keep you posted throughout the week.
The banking crisis will continue to rage until the Fed and the ECB accept the underlying reason for the deposit flight. Banks cannot cope with an über-inverted yield curve, why cuts are needed asap to contain the situation. It will likely get worse before it gets better.
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.
Live coverage of the SVB crisis! We give you our live updates over the coming days!
Silicon Valley Bank is nothing but a symptom of years of excess money growth and it is now time to figure out who else is swimming naked. Money growth is negative, and idiots only survive in times of excess liquidity.
China is rebounding from a Lehman like credit event in 2022, which makes Chinese assets the cheapest on earth. Buying Chinese assets or assets outside of China with a link to China may prove to be your portfolio liberator in an otherwise tricky road ahead in 2023.
There are undoubtedly signs of inflation pressures resurfacing in leading indicators, but remember that activity leads inflation. If inflation returns (from a momentum perspective), it is because activity has picked up markedly ahead of it. That is not bad news.
February did not play out fully as expected by our Macro regime indicator. We will assess why in the weekly editorial and update projections for March.
We experience seasonal adjustments to an extent NEVER seen in time series history for CPI, Retail Sales and ISM numbers in January. Are we amidst a spreadsheet rebound or an actual economic rebound? We lean towards the former. Here is why…
We have been spending countless hours discussing the liquidity outlook in the US, but developments elsewhere are equally as interesting. JPY and CNY liquidity is on the RISE, which has turned the tide on “global liquidity”. Position accordingly?
Economic data is currently all over the place, but the bottom-line is clear. The recession is NOT here, and judging from our probability models it may take another while (at least until Q3). This is in sharp contrast to sentiment entering 2023 and not least positioning.
When the TGA is built up due to T-bills issuance, the ON RRP usage drops, which net/net means that USD liquidity keeps printing at more benign levels than anticipated by many. This will continue throughout February and March
Waller from the FOMC has hinted when the QT process ends. The current debt ceiling stand-off is likely to prolong QT in this Waller framework, while the terminal value of USD reserves remains the same.
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
The ECB still lags European inflation by several months, while a Chinese reopening is not necessarily bullish for oil. Find out why as we reveal our new service!
Is the EUR swap market prepared for what’s coming in 2023? We find that the market is yet to understand how hawkish Lagarde intends on being in Q1/Q2. Here is what our models tell us…
Right about everyone and their mother expects a new low in equities in Q1/Q2-2023 because of earnings disappointments. Here are two reasons to remain decently upbeat.
Lagarde starred in the role as the slightly more tanned Grinch as central banks decided to ruin Christmas. Structural liquidity doesn’t look too bad and 2023 is not necessarily the year of the bear.